TMI Blog2018 (4) TMI 1934X X X X Extracts X X X X X X X X Extracts X X X X ..... HELD THAT:- Since, the assessee has not earned any dividend (exempt) income during the year, following the jurisdictional High Court decisions in the cases of Redington (India) Limited [ 2017 (1) TMI 318 - MADRAS HIGH COURT] and CIT, Central(1), Chennai vs Chettinad Logistics Pvt. Ltd [ 2017 (4) TMI 298 - MADRAS HIGH COURT] the addition made by the AO is deleted and the assessee s grounds in this regard is allowed. - I.T.A. No. 963/Chny/2015 - - - Dated:- 3-4-2018 - BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER FOR THE APPELLANT SHRI. VIKRAM VIJAYARAGHAVAN FOR THE RESPONDENT SHRI. M. SRINIVASA RAO, ORDER PER S. JAYARAMAN, ACCOUNTANT MEMBER: The assessee filed this appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the DRP. He submitted that this comparable was excluded as a comparable for ITeS companies in the following rulings owing to different functional profile and business model: a. Xchanging Technology Services India (P) Ltd Vs DCIT [2015] 57 taxmann.com 437 - Delhi ITAT Confirmed by the High Court of Delhi in ITA No. 813/2015 on 20.10.2015; b. Xchanging Technology Services India (P) Ltd Vs DCIT [2015] 60 taxmann.com 389 - Delhi ITAT - Confirmed by the High Court of Delhi in ITA No. 36/2016 on 19.01.2016 c. Rampgreen Solutions Pvt. Ltd. - [2015] 60 taxmann.com 355 (Delhi) - Delhi High Court d. Parexel International (India) (P) Ltd [2014] 51 taxmann.com 238 - Hyderabad ITAT e. Cummins Turbo Technologies Ltd. [2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is company derives its income mainly from its related parties and furnished a snapshot of the RPT to sales as under : Year on year analysis of RPT ratio Particulars FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11 Sales (in INR) 37,07,24,095 21,43,70,565 9,74,95,149 11,56,11,146 Income from RPT (in INR) 37,07,24,095 11,90,93,313 2,39,72,792, 11,40,89,195 RPT/Sales (in %) 100.00% 55.55% 24.59% 98.68% The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Private Limited vs. DCIT (ITA No. 812/Mad/2015). 4. Further , the AR submitted that the Learned TPO has rejected its comparables viz Caliber Point Business Solutions Limited R Systems International Limited holding that these companies have adopted different financial period from the financial period of the assessee . In this regard, he relied on the following Tribunal decisions, wherein these companies were included as a comparables and the respective appellants were directed to furnish comparables data for TPO verification: a. Xchanging Technology Services Pvt. Ltd. in ITA No. 1222/Del/2015; b. Mercer Consulting (India) Pvt. Ltd in ITA No. 966/Del/2014; 5. Per contra, the DR submitted that the details furnished by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies namely MPS Technologies Ltd and MPS Content Services INC., USA held during the said assessment year. The AO ought to have appreciated that the assessee had taken a business decision to invest in subsidiary companies and it did not make the investments with a view to earn exempt income. Therefore, notional attribution of expenses is unsustainable. The DRP and AO ought to have appreciated that the investments made by the assessee were purchased out of the surplus funds by self and no administrative overheads were attributable to the investments made in subsidiary companies. Without prejudice to the above, it is submitted that the dividend income, if any received from MPS Content Services Inc, USA is a taxable income and hence cannot be in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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