TMI Blog2020 (8) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... e direct for inclusion of these comparables - CG Vak Software Exports Ltd., R Systems International Ltd, and Allsec Technologies. - ITA No. 6523/Mum/2014 - - - Dated:- 23-7-2020 - Shri Shamim Yahya, AM And Shri Pawan Singh, JM For the Appellant : Shri Sunil Moti Lala For the Respondent : Shri A. Mohan ORDER PER SHAMIM YAHYA, A. M.: This appeal by the assessee is directed against the order of the learned Commissioner of Income Tax (Appeals) ( ld.CIT(A) for short) dated 29.08.2014 and pertains to the assessment year (A.Y.) 2008-09. 2. Although the assessee has raised various grounds, the issue relates to transfer pricing adjustment of ₹ 1,44,87,25,823/- done by the authorities. 3. The assessee is a subsidiary of Morgan Subsidiary of Stanley Incorporated USA and is a captive service provider, providing back office support services to its associated enterprises globally. During the year under consideration, it had provided aforesaid support services to its associated enterprises and received a fee of ₹ 1,44,87,25,823/-. This the assessee benchmarked under the transactional net margin method. It selected 18 companies as comparable and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Vishal Information Technologies Ltd. (Common comparable) 49.57% 51.72@ 50.68% 50.68% 3. Crossdomain Solutions - - 26.96% 26.96% 4. Datamatics Financial Services - - 34.87% 34.87% 5. Allsec Technologies 27.91% -14.13% - - 6. R Systems International Ltd. 13.91% 10.34% - - 7. CG Vak Software Exports Ltd. 4.38% -11.98% - - 8. Cosmic Global Ltd. 14.02% 23.30% - - 9. Spanco Telesystems and Solutions Ltd. 21.97% 5.86% - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gly excluded by the TPO: Allsec Technologies R Systems International Ltd CG Vak Software Exports Ltd. 8. As regards the rejection and comparables, it is the contention of the learned counsel of the assessee that assessee is engaged in back office support functions which has been accepted in the earlier assessment years. The entities dealing with the knowledge and processing outsourcing are not comparable to the assessee and hence need to be excluded. The learned counsel of the assessee submits that the ld. CIT(A) has rejected the Transfer Pricing Officer's characterization of the assessee as KPO. Hence, KPO selected by the Transfer Pricing Officer cannot be considered as comparables. The learned counsel further submits that the Hon ble Delhi High Court in the case of Rampgreen Solutions (P.) Ltd. v. CIT (2015) 377 ITR 533 (Delhi) has categorically expressed reservation on the observation of the Special Bench relied upon by the learned CIT(A). Further, he has submitted that the decision of Hon ble Delhi High Court in Rampgreen Solutions (P.) Ltd. (supra) has been followed by the Hon ble Bombay High Court in the case of PTC Software (I) (P) Ltd. (2017) 39 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the case of Maersk Global Centers (India )(P) Ltd . Thereafter, the learned CIT (A) upheld the assessing officer s action of selection of four of the comparables and accepted the assessee s contention in rejection of two the comparables. 12. Now in appeal before us, the submission of the learned counsel of the assessee is that assessee's functions are that of ITES which has been duly accepted by the revenue as well as by the ITAT in earlier years. Hence, the re-characterisation of the assessee's functions as knowledge process outsourcing is not sustainable. We are in full agreement with this contention. Furthermore, we find that the ld. CIT(A) has clearly contradicted himself by stating both that assessee is not a KPO and at the same time accepting the comparables selected by the Transfer Pricing Officer from the database for knowledge process outsourcing companies. 13. As regards the rejection of four companies, it is the submission of learned counsel of the assessee that the functions of Eclerx Services Ltd. and Vishal Information Technologies Ltd. (earlier Coral Hub Ltd.) has been held to be not comparable to the assessee by the ITAT for the assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. (supra) on comparability, the Tribunal held as under: We though in light of our aforesaid observations had partly disagreed with certain grounds as had been averred by the Ld. A.R to facilitate exclusion of the aforesaid comparable, however as observed by us hereinabove that the aforesaid comparable viz. Coral Hub Limited (earlier known as Vishal Information Technology Limited) had a business model where services are outsourced, as ' against the business model of the assessee where services are rendered by employing own employees and using one's own infrastructure, on the basis of which we are of the considered view that it can safely be concluded that the said comparable was functionally different, and as such was liable to be excluded from the final list of comparables. That our aforesaid view stands fortified by the aforesaid order passed by the Tribunal while disposing of the appeal of the assesses own appeal for A.Y. 2005-06, as well as the judgment of the Hon'ble High Court of Delhi in the case of : Rampgreen Solutions (P.) Ltd. (supra). Thus as there has been no material shift in the facts involved in the case of the assessee for the year under consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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