TMI Blog2017 (9) TMI 1913X X X X Extracts X X X X X X X X Extracts X X X X ..... tsourced. As against this, the assessee is doing the entire business at its own without there being any expenditure on outsourcing. This reveals a significant difference in the business model adopted by the assessee and e-Clerx Services Ltd. In Rampgreen Solutions Pvt. Ltd. vs. CIT [ 2015 (8) TMI 931 - DELHI HIGH COURT ] excluded Vishal Information Technology Ltd. from the list of comparables on accounts of its different business model, namely, more of outsourcing than in-house services. When we advert to the facts of the instant case, we find that e-Clerx Services Ltd. has also spent more than 26% of the total cost of the employees and job work charges simply on outsourcing. Since the business model of e-Clerx Services Pvt. Ltd. is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer (AO) made reference to the Transfer Pricing Officer (TPO) for determining the arm s length price (ALP) of the international transactions. The dispute in this appeal is in only respect of international transaction of Provision of IT enabled services with transacted value of ₹ 5,45,07,381/-. The assessee selected itself as the tested party and applied Transactional Net Margin Method (TNMM) as the most appropriate method. Its own Profit Level Indicator (PLI) of Operating Profit (OP) to Total Costs (TC) at 17% was shown to be favourable with the PLI of comparables. On this basis, it was claimed that the international transaction was at ALP. The TPO made certain variations in the comparables chosen by the assessee. Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing of the legal contracts entered into by various Ariba group companies. This includes the sales contracts as well as the purchase contracts with various vendors. In providing such services, the assessee uses the pre-existing templates for contracts. Under Pricing support services, the assessee renders pre-sale support and post-sale support services. The sale team of the assessee specifies various parameters like details of the solutions sold, level of support provided etc. based on which the final quote is arrived at. In the post-sale services, the pricing team reviews the sale contracts entered into with the customers to ensure that the final terms and conditions are same as agreed through the approval process. Under the third category ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s argument and finally included this company in the list of comparables. No relief was allowed in the first appeal. 6. Having heard both the sides and perused the relevant material on record, it can be seen from the Annual Report of this company, a copy of which has been placed in the paper book, that it paid Outsourcing charges to the tune of ₹ 8 crore and odd in addition to payment of Salary and wages etc. to its staff, including director s remuneration, to the tune of ₹ 24.54 crore. This divulges that roughly 26% of the activity carried out by this company has been outsourced. As against this, the assessee is doing the entire business at its own without there being any expenditure on outsourcing. This reveals a significan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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