TMI Blog2019 (2) TMI 1993X X X X Extracts X X X X X X X X Extracts X X X X ..... urt is of the opinion that the two possible choices, i.e. turnover method as well as the headcount method in the present case was not justified. Concededly, the expenditure incurred by the assessee was common for two different segments. The tax authorities broadly agreed that expenditure could be allocated on the basis of proportionate turnover of the concerned segment. Having done so, the alternative was open to accept one or the other principle. Therefore, the choice of the assessee in relying upon the headcount principle per se could not have been rejected. The question of law, therefore, is answered against the Revenue and in favour of the assessee. Comparability selection - ITAT has remitted the matter for consideration of one of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e service segment for which, calculation of gross profit cannot be done? (i) Whether, in the facts and circumstances of the case and in law, the Tribunal erred in accepting a functionally different company as a comparable and in further rejecting the appellant s reliance on the company s website for ascertaining its nature of business? 2. The brief facts are that for the A.Y. 2008-09, the assessee [i.e. the appellant] reported its international transactions, including international transaction of Receipts for services rendered ; it engages itself in online market support services. The reference was made to the Transfer Pricing Officer who, on an application of the Transactional Net Margin Method (TNMM) benchmarked the internati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant of the circumstances that the principle of headcount had been applied consistently in the past by the assessee. Learned counsel for the Revenue relied upon the Tribunal s order and submitted that the rejection of the headcount principle was justified. The Tribunal s reasoning was that the headcount principle was irrational given the disparity of salaries of the employees of the different segments. 5. It is apparent that the headcount basis is an acceptable principle and known to law. EHTP India Pvt. Ltd. (supra) recognized it; although the Court took note of the previous practice of the assessee, at the same time it did not in any manner frown upon the application of that principle. 6. This Court notices that the principle of appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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