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TMI Blog2020 (9) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... rder under section 143(3) read with section 144C of the Income- tax Act, 1961 ('the Act') after considering the adjustments proposed by the learned TPO in his order passed under section 92CA(3) of the Act and subsequently confirmed by the Hon'ble DRP. Each of the ground referred is separate, which may kindly be considered independent of each other. Transfer Pricing Grounds On the facts and circumstances of the case and in law: 1. The learned TPO/AO/DRP have erred in making an adjustment of INR 20,547,164 to total income of the Appellant in respect of international transaction pertaining to provision of consulting services by the Appellant to its Associated Enterprise ("AE") (hereinafter referred to as "impugned transaction"). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mark the impugned transaction. 7. The learned TPO/AO/DRP have erred in not including certain companies as comparable by applying different financial year ending filter (i.e. having accounting year other than March 31 or companies whose financial statements were for a period other than 12 months). 8. The learned TPO/AO/DRP have erred in selecting certain companies (which are earning supernormal profits) as comparable to the Appellant to benchmark the impugned transaction. Corporate tax grounds 9. The learned AO has erred in granting TDS credit only to the extent of INR 14,705,387 as against TDS credit of INR 18,333,275 claimed by the Appellant in its return of income. 10. The learned AO has erred in levying interest, which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied by the TPO in earlier years and approved by the DRP. The TPO selected the following ten comparables:- S.No. Company Name OP/OC 1. ICRA Management Consulting Services 2.90% 2. ICRA Online Limited 13.31% 3 ICRA Techno Analytics I milted 14:01% 4 Cyber Media Research Limited -1.71% 5 Informed Technologies Limited 4.47% 6 Accentia Technologies Limited 13 93% 7 Acropeal Technologies Limited (Healthcare segment) 10.91% 8 Eclerx Services Limited 57.78% 9 Cosmic Global Limited 23.38% 10 E4e Healthcare Business Services Limited 17.11% Average 15.61% 3.1 The average margin was computed at 15.61% and the TPO accordingly proposed an upward adjustment of Rs.4,29,90,719/-. 4. The DRP, appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of the TPO, the ld. DR drew the attention of the Bench to the following and submitted that the TPO has given justifiable reason as to why CUP method cannot be applied as the most appropriate method:- "However, the undersigned is of the belief that CUP method cannot be applied as the most appropriate method herein due to the following reasons. * The assesses has compared the invoices raised on its AE with the invoices raised another group entities. The transaction with other Tower Watson Group entity cannot serve as a good comparable. * The comparisons shall be on invoice by invoice with third parties located in the same "geographical locations". However, the assessee has done only sample comparison which fails the compariso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... line, pre- determined fixed rate is billed and if the hourly rate is higher than the pre-determined fixed rate, then difference is written off. In our considered opinion, this is a standard practice followed by the enterprises providing similar consultancy services. Further, we find that the assessee has to assume total risk when it is providing services to the UREs whereas when the services are provided to AEs, the risk is that of the AEs whose client has been serviced. 20. We do not find any force in the contention that the evidences are not brought on record. The invoices raised to AEs and non AEs are exhibited in the paper book. Whether the same person is providing service to both the AEs and non AEs is irrelevant, so as long as the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke care of the nature and technical difficulties of the project. Even the OECD Guidelines of July 2010 preferred internal CUP over other methods, since it bears a more direct and closer relationship to the transaction under review. 23. Considering the totality of the facts in the light of invoices relating to AEs and non AEs exhibited in the paper book, we are of the considered opinion that CUP is the MAM and has been rightly adopted by the assessee to bench mark its transactions for provision of consulting services rendered. This grievance is, accordingly, allowed." 10. Since the facts of the instant case are identical to the facts for the A.Y. 2011- 12, therefore, respectfully following the decision of the Tribunal in assessee's own c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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