TMI Blog2023 (1) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... would be at arm s length. Cross objections raised by the assessee by way of original grounds, in respect of aforesaid comparables are partly allowed and additional ground raised by the assessee is allowed. - ITA No.1215/Mum/2016 , CO No.55/Mum/2016 (Arising out of ITA No.1215/Mum/2016) - - - Dated:- 24-5-2022 - SHRI M.BALAGANESH, ACCOUNTANT MEMBER AND MS. KAVITHA RAJAGOPAL, JUDICIAL MEMBER Revenue by Ms. Vatsalaa Jha Assessee by Shri Sunil Lala ORDER PER M. BALAGANESH (A.M): This appeal in ITA No.1215/Mum/2016 CO No.55/Mum/2016 for A.Y.2011-12 preferred by the order against the final assessment order passed by the Assessing Officer dated 29/01/2016 u/s.143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (hereinafter referred to as Act ), pursuant to the directions of the ld. Dispute Resolution Panel (DRP in short) u/s.144C(5) of the Act dated 27/11/2015 for the A.Y.2011-12. 1.1. Let us take up assessee s Cross Objection No.55/Mum/2016 (A.Y.2011-12). 2. In the assessee s Cross Objection, the assessee had sought for inclusion of the following comparables:- a. R. Systems International Ltd., b. CG-VAK Software and Exports Pvt. Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid comparables. 4.4. Inclusion of R.Systems International Ltd., We find that R. Systems International Ltd., was subject matter of consideration by the order of this Tribunal in assessee s own case for A.Y.2008-09 in ITA No.6523/Mum/2014 dated 23/07/2020. It has been held that assessee is merely engaged in back office support functions which has been accepted by the Tribunal in earlier assessment years and accordingly, the comparables dealing with Knowledge Process Outsourcing (KPO) activity could not be made comparable with the assessee company. However, we find that the ld. TPO had characterized the assessee s functions as KPO as against the BPO activity carried out by the assessee. We find that R Systems International Ltd., was held to be a good comparable with that of the assessee company on functional similarities by this Tribunal for A.Y.2008-09 in its order dated 23/07/2020 referred to supra on the ground that the said comparable was treated by the ld. TPO himself as a good comparable in earlier years in the case of the assessee herein. We further find that in the case of assessee company (as a successor to Morgan Stanley Solutions India Pvt. Ltd) this Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cordingly, to be accepted as a good comparable. However, in pages 12 13 of his order, he rejects the same as functionally dissimilar to the assessee company by stating that the said comparable is a low end ITES whereas, assessee is high end ITES provider. But, we find that this Tribunal in A.Y.2008-09 in assessee s own case in ITA No.6523/Mum/2014 dated 23/07/2020 had held that assessee is merely providing back office support functions to its Associated Enterprises and hence, assessee also is only a low end ITES provider. In fact, the ld. TPO himself while addressing the rejection of E-Clerx Services Ltd., in A.Y.2009-10 had stated that E-Clerx Services Ltd is a high end ITES provider whereas assessee is low end ITES provider. Hence, it is conclusively proved that assessee is only a low end ITES provider. In view of the aforesaid observations, we hold that Jindal Intellicom Pvt. Ltd., is to be included as a good comparable with that of the assessee company, in the final list of comparables. 4.7. Inclusion E4E Healthcare Services Ltd., - The inclusion of this comparable is stated to be not pressed by the ld. AR at the time of hearing, hence, we are not adjudicating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee during the year under consideration are similar to the functions performed in A.Y. 2007-08. Hence, reliance could be placed on the Tribunal decision for A.Y.2007-08 in this regard. Accordingly, we hold that E-clerx Services Ltd., should be excluded from the final list of comparables. 4.9. We find that the ld. DR placed heavy reliance on the decision of Hon ble Delhi High Court in the case of Mckinsey Knowledge Centre India (P) Ltd., vs. PCIT reported in 264 Taxman 24 to counter the arguments advanced by the ld. AR. But, we find that this order of the Hon ble Delhi High Court has been clarified subsequently by Hon ble Delhi High Court in ITA No.461 526 of 2017 in the case of Mckinsey Knowledge Centre India (P) Ltd., dated 29/07/2019 stating categorically as under:- 1. These are two appeals by the Assessee against the order of the ITAT dated 15dl December, 2016 in ITA No. 154/Del/2016 for the Assessment Year (AY) 2011-2012 and order dated 11th May, 2017 passed by the ITAT in ITA No. 6648/Del/2016 for AY 2012-2013. 2. While admitting these appeals on 7ttl February, 2018 the following question of law was framed for consideration. Did the ITAT commit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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