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TMI Blog2017 (2) TMI 1460X X X X Extracts X X X X X X X X Extracts X X X X ..... ve to prefer an appeal against the order passed by Deputy Commissioner of Income-tax -11 (1) (' AO') in pursuance of the directions issued by Dispute Resolution Panel ('DRP'), Bangalore dated 31 August 2010 under section 253 of the Income-tax Act, 1961 ('Act') on the following grounds: On the facts and circumstances of the case and in law: 1. The order of the learned AO and direction of the Hon'ble DRP are based on incorrect interpretation of law and therefore are bad in law. 2. The learned AO has erred in assessing the total income at NIL as against returned loss of Rs. 4,81,22,829/- computed by the Appellant. . 3. The learned AO/ Transfer Pricing Officer ('TPO') erred in making an addition of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in upholding the action of the learned AO / TPO without specifically addressing this contention. 8. The learned AO / TPO erred in rejecting certain comparable companies on' account of persistent operating losses on one hand and accepting certain super profit making companies on the other hand. 9. The learned AO / TPO erred in rejecting certain companies having different accounting year (i.e. companies having accounting year other than March 31 or companies whose financial statements were for a period other than 12 months). 10. The learned AO / TPO erred in rejecting certain companies for not having foreign exchange earnings (and in some cases for having foreign exchange earnings less than 25% of the revenues). 11. The learned A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. counsel for the assessee has filed the following additional grounds:- " ADDITIONAL GROUND OF APPEAL 16. Without prejudice to the ground no. 7, the learned TPO/AO has erred in law/facts by selecting the following companies as comparables to Appellant even though these are functionally different. * Alpha Geo India Limited * Vimta Labs Limited * Celestial Labs Limited 17. Without prejudice to ground No. 7, the learned TPO/AO has erred in law/facts by not objectively selecting the following companies as comparables to Appellant even though these companies satisfy the comparability criteria, while undertaking the search process. * Choksi Laboratories Ltd * Neeman Medical International Ltd * Research Support International ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Petitioner submits that the failure to raise this ground at an earlier stage 'is neither wilful nor wanton but due to the reasons stated above. No prejudice would be caused to the Respondent by reason of the above additional grounds being admitted and adjudicated and accordingly the balance of convenience is in favour of such an order being passed by this Hon'ble Tribunal. The Petitioner states and submits that the issues raised in the additional ground above are legal issues and arise out of the order of the lower authorities. Reliance is based on the decisions of the Honble Supreme Court in the case of Jute Corporation of India vs. CIT (187 ITR 688) and National Thermal Power Corporation vs CIT (229 ITR 383); decision of ful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rables for determination of the arm's length price (ALP) of the international transactions. 6. With regard to Alpha Geo India Ltd., it was contended on behalf of the assessee that this comparable does not meet the basic comparability criterion of functional similarity which renders seismic services and does not provide any pharmaceutical R&D services. It also fails "atleast 25% earning from exports filter" applied by the TPO himself. The profile of Alpha Geo India Ltd. is available at page 386 of the compilation of the assessee, according to which the company provides the following services:- - Designing and preplanning of 2D and 3D services - Seismic data acquisition in 2D and 3D - Seismic data processing/reprocessing/special pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s further contended that this company is also functionally different, as it focusses on element that effect the total health of people i.e., food, water, drugs, clinical diagnostics and environment. However, Apotex (the assessee) is engaged in product research & development services pertaining to pharmaceutical products only. This company also offers wide spectrum of services and in the absence of proper revenue/segmental break-up, the company should not be considered as a comparable. The bifurcation of revenue is not available and for reference, our attention was invited to page 496, where the profile and services of this company was mentioned and from a careful perusal of these details of profile and services, we are of the view that this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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