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TMI Blog2020 (9) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... s in India in general through seminars, conferences, advertisement in public media, promotional campaigns. For such services, the assessee is remunerated by its AEs on a cost plus basis. 4. International transactions of the assessee with its AEs reported in form 3CEB are as under: Assessment Year 2004-05 S.N International Transaction Method Value (in Rs.) 1 Provision of marketing support services TNMM 164,86,44,780 2 Service Fee received for software consulting services TNMM 8,78,47,564 3 Assignment of personnel TNMM 5,94,17,211 2005-06 S.N International Transaction Method Value ( in Rs.) 1 Provision of marketing support services TNMM 2,190,042,292/- 2 Provision of Microsoft Consulting solutions ("MCS") TNMM 60,922,198/- 3 Provision of product support services ("PSS") TNMM 15,480,268/- 4- Provision of regional guest employee ("RGE") services TNMM 4,35,767,529 5* Assignment of personnel TNMM 1,01,512,302 5. There are three segments as under:- i) Microsoft services [MCS] ii) Product support services [PCS] iii) Service fee constituted of market support services and R&D services. 6. In the TP study, MCS and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sory services of financial markets and as such financially different." 24. When the taxpayer is proved to have provided similar marketing support services to its AE as it has provided in AYs 2007- 08 to 2009-10, no cogent reason has been brought on record by the TPO/CIT (A) to depart from the consistent view taken in the succeeding years. Moreover, the company providing advisory services cannot be compared with the taxpayer who is into providing routine marketing support services to its AEs. 25. Moreover, audited financial of CRISIL, available at page 426 of the paper book (Annual Report), shows that 74% of its income is from rating services. Rating services have been explained in the annual report, available at page 411 of the paper book, as under :- "Some landmarks achieved by the Ratings division in 2001-02 are highlighted below : * Grading of healthcare institutions launched with the announcement of grades assigned to three hospitals * Introduction of a new rating symbol (with "r" subscript) to indicate non-credit risk * First rated debt transaction for an acquisition * Two new State Government ratings * Government of India guaranteed debt ratings * First rated take-out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ws that ICRA is into rating services, advisory services and information services. Furthermore, perusal of the TP order itself shows that TPO himself acknowledged in para 7.9 that ICRA is into providing premium financial advisory services as the rate of its employee cost is extremely high indicating that its personnel are key drivers of these businesses. Moreover, coordinate Bench of the Tribunal in taxpayer's own case for AYs 2002-03 and 2007-08 (supra) has excluded ICRA from the final set of comparables. The relevant findings returned in AY 2002-03 (supra) is reproduced for ready perusal as under :- "ICRA LIMITED (ICRA) 27. ............Undisputedly, ICRA has been rejected as a valid comparable by the Revenue on the objection of functional dissimilarity raised by the taxpayer in AYs 2006-07 to 2009- 10, as per compilation given by the taxpayer during the course of arguments available on record. 28. Moreover, perusal of the annual report, available at pages 547, 553 & 557 of the paper book, shows that there is no segmental information available and keeping in view the diversified function performed by ICRA, it cannot be taken at entity level. Moreover, under TNMM, the TPO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lementation and monitoring, it is into providing planning and designing of rural and urban water supply schemes, sewage treatment and disposal schemes, laboratory testing, inspection etc. 27. Coordinate Bench of the Tribunal excluded WAPCOS from the final set of comparables in taxpayer's own case for AY 2006- 07 by returning following findings :- "18.2. We find that this company operates in two segments, namely, Consultancy & engineering projects and Lumpsum turnkey projects. This company provides consultancy services, such as, pre-feasibility report of hydroelectric projects, field investigation drilling of tube wells, etc. From the above description of the nature of activities performed by this company, it can be seen that the same is engaged in providing engineering and consultancy services, which can be of no match to the assessee's marketing support services. This company is also directed to be excluded from the list of comparables." 28. Keeping in view the facts and circumstances of the case, WAPCOS is into providing distinct services and is a 100% Government owned company, being not driving by profit motive and following the decision of the coordinate Bench of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 517 of the paper book, shows that Vimta is engaged in contract research (clinical and pre-clinical), clinical specialty diagnostics, analytical testing of water, food, drugs, chemicals, petroleum products, minerals, metals, etc. and environmental monitoring and impact assessment. Perusal of schedule forming part of the Accounts at page 527 of the paper book shows that it has displayed high proportion of plant and machinery. 34. Coordinate Bench of the Tribunal in AY 2007-08 in taxpayer's own case excluded Vimta in taxpayer's own case on ground of functional dissimilarity by returning following findings:- "22. We do not find any force in the functional comparability of this company with the assessee. Spectrum of the services rendered by this company covers analytical food and drugs; clinical reference lab services to address the specialties and central lab services for clinical trials; clinical trials phase-IIV and BA/BE studies; pre-clinical safety assessments; and environmental assessments. A cursory look at the nature of services provided by this company divulges that the same is functionally dissimilar from the assessee. How a company conducting clinical trials on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred by the assessee on the construction of any structure or by way of renovation or extension or improvement to the building in respect of which the assessee holds a lease or other right of occupancy for the purposes of its business, then provision regarding depreciation shall apply as if the said structure or work is a building owned by the assessee. Accordingly depreciation @ 10% was allowed. 18. When the matter was agitated before the ld. CIT(A), the ld. CIT(A) held as under; "On the similar issues. I have confirmed the addition for A.Y. 2005-06. The addition in assets is similar in nature as discussed in A.Y. 2005-06. The relevant portion of appeal order for A.Y. 2005-06 is reproduce as under:- I have considered the findings of the AO, written submission and the oral arguments of the Ld AR carefully. I have perused the items of the expenditure which has been reproduced by the assessing officer in the assessment order and also reproduced earlier. Majority of the expenditure are on account of Civil and interior works amounting Rs. 2.26 crores paid to M/s M. S. Decorators Pvt. Ltd. similarly for interior designing Rs. 49.8 lacs has paid and other main expenditure are retable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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