TMI Blog2023 (11) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... entity was excluded on the similar reasoning that it was engaged in provided highend consultancy services. Global Procurement Consultants Ltd e assessee s marketing functions could not be compared with an entity providing high end technical consultancy to entities like World Bank and other significant financial institutions where the magnitude would be very high and the objective would be different. Therefore, this entity has rightly been excluded by Ld. CIT(A). SEL and ARMS segments of India Tourism Development Corporation Ltd. (ITDC) - As CIT(A), considering the decision of Eli Lilly Co. India P. Ltd. ( 2015 (12) TMI 1172 - ITAT DELHI ) directed Ld. TPO to include SEL and ARMS misc. operations segment of ITDC Ltd. CIT(A) has directed lower authorities to adopt particular segment of this entity which is quite comparable to assessee s functions. Therefore, we find no reason to interfere in the same. EDCIL Ltd. entity has been accepted to be comparable entity in earlier years and therefore, there is no reason for rejection of the same in the current year. No change in functional profile of that entity has been demonstrated before us. In House Production Ltd.entity h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndment of Sec. 251 w.e.f. 01.06.2001? 3. The Ld. CIT (A) erred in rejecting the comparable companies selected by the TPO while deciding Market Support Services, by applying close functional similarity without appreciating the fact that for TNMM broad functional comparability is sufficient? 4. The Ld. CIT(A) erred while deciding Market Support Services, in having accepted that only close functional similarity needs to be established in selecting comparable companies was correct in applying it only to high margin companies contested by assessee and not for low margin comparable companies suffering the same infirmity? 5. The Ld. CIT(A) erred in directing the AO/TPO to exclude Power system Operation Corporation Ltd from the list of comparable companies without considering the fact that the TPO in his order has clearly have stated that Power System Operation Corporation Ltd's 90 % of revenue is from market support rather than from integration of the power grid? 6. The Ld. CIT(A) erred in directing the AO/TPO to exclude Apitco Ltd from the list of comparable companies without noticing the fact that the TPO in his order have clearly stated that perusal of the annual report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and tabulation have been filed during the course of hearing which has duly been considered by us while passing the order. Having heard rival submissions and upon perusal of case records, our adjudication would be as under. Proceedings before lower authorities 3.1 The assessee carried out certain international transactions with its Associated Enterprises (AE) which were subject matter of determination of Arm s Length Price (ALP) before Ld. Transfer Pricing Offcier-2(2), New Delhi (TPO) u/s 92CA. The Ld. TPO determined the ALP of these transactions vide order dated 19-01-2015. The assessee being resident corporate entity is stated to be wholly owned subsidiary of Compagnie Financiere Michelin. The assessee entity was established to carry out manufacturing and trading of all varieties of Tyres and Tubes. However, in the current year, the assessee was engaged in import and trading of Tyres under the brand name Michelin . 3.2 The first dispute of present appeal is adjustment made by lower authorities while determining ALP of marketing support services under TP mechanism. The assessee provided marketing support services to its AE. The assessee s computed its own Profit Lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A). (ii) Apitco Ltd. The Ld. TPO proposed inclusion of the same. The assessee opposed inclusion of the same on the ground that it was providing high end consultancy services. However, Ld. TPO held that it was providing similar function as that of the assessee. The objection that it was a government company was also rejected. The Ld. CIT(A) concurred with assessee s submissions that this entity was providing high end technical consultancy related to reconstruction and management services, micro enterprise development, skill development etc. and therefore, this entity was to be excluded. In our opinion, the assessee s marketing functions could not be compared with an entity providing high end technical consultancy. This entity is engaged in providing specialized consultancy and therefore, rightly been excluded by Ld. CIT(A). The various decisions of the Tribunal as mentioned by Ld. AR support the exclusion of this entity. One of such decision is the decision of Delhi Tribunal in Philip Morris Services India S.A. (95 Taxmann.com 156) wherein this entity was excluded on the similar reasoning that it was engaged in provided highend consultancy services. (iii) Globa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omparable entity in earlier years and therefore, there is no reason for rejection of the same in the current year. No change in functional profile of that entity has been demonstrated before us. (vi) In House Production Ltd. The Ld. TPO rejected this entity on the ground that it fails sales as % of sales turnover less than 50% turnover criteria. The Ld. CIT(A) directed for inclusion of this entity on the ground that this company was accepted as a comparable entity by TPO in AYs 2009-10 and 2010-11. The undisputed position that emerges is that this entity has been accepted to be comparable entity in earlier years and therefore, there is no reason for rejection of the same in the current year. No change in functional profile of that entity has been demonstrated before us. 4. The revenue has also assailed the directions of Ld. CIT(A) with respect to certain comparable entities wherein Ld. CIT(A) has directed Ld. AO / TPO to reconsider the Annual Report of these entities. The same is on the ground that Ld. CIT(A) has no power to set aside the assessment. However, we find that Ld. CIT(A) has merely directed lower authorities to reconsider the annual report and re-compute ..... X X X X Extracts X X X X X X X X Extracts X X X X
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