TMI Blog2023 (11) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... able to the assessee. The Assessing Officer is directed to exclude this company. Indus Technical and Financial Consultants - As per the information available in the website of the company, it is engaged in providing high-end technical services in the areas of environment and pollution control, technology management, financial services, administrative and legal services, project selection and project implementation services, energy and power services etc. Thus, it is evident, though the company is engaged in various activities, however, adequate segmental information is not available in the annual report. Considering the aforesaid aspects, the coordinate Bench in case of Motorola Solution India Pvt. Ltd. [ 2019 (11) TMI 333 - ITAT DELHI] has excluded this company from the list of comparables. Technicom- chemie (India Ltd.) company has shown income from commission, consultancy and services. Whereas, the segmental details relating to the aforesaid segments are not available. Considering the aforesaid aspects, the coordinate Bench in case of Motorola Solutions India Pvt. Ltd. [ 2019 (11) TMI 333 - ITAT DELHI] which is for the very same assessment year, has excluded this company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mar, CIT-DR ORDER This is an appeal by the assessee against final assessment order dated 18.09.2012 passed under section 143(3) read with section 144C of the Income-tax Act, 1961 pertaining to assessment year 2008-09, in pursuance to the directions of learned Dispute Resolution Panel (DRP). 2. Though, the assessee has raised multiple grounds, however, at the time of hearing, learned counsel appearing for the assessee submitted that he will be confining his arguments only to the issues relating to selection/rejection of six comparables. Besides main grounds, the assessee vide letter dated 24.02.2023 has also raised an additional ground relating to certain computational error while computing working capital adjusted margins of the comparable companies. Hereinafter, we will address the arguments made before us by learned counsel. 3. In so far as the issue of selection/rejection of comparables is concerned, briefly, the facts are, the assessee is a resident corporate entity and wholly owned subsidiary of Honda R D Company Ltd., Japan. As stated, the assessee is engaged in providing market research and testing services to its overseas Associate Enterprises (AEs) and is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upward adjustment to the ALP. In terms with the order passed by the TPO, the Assessing Officer framed the draft assessment order by adding back the TP adjustment proposed by the TPO. Against the draft assessment order, so passed, the assessee raised objections before learned DRP. While disposing of the objections of the assessee, learned DRP retained 10 of the comparables selected by the TPO while excluding two companies, viz., Rites Ltd. and Vapi Waste Effluent Management Company Ltd. 5. Before us, six comparables are in dispute. The assessee seeks exclusion of following four comparables : (i). Aptico Limited; (ii). Indus Technical and Financial Consultants Limited; (iii). Techni-com Chemie (India) Limited; and (iv). WAPCOS Limited. Whereas, it seeks inclusion of the following two comparables : (i) India Tourism Development Corporation Limited (ii) Idma Laboratories Limited. Hereinafter, we will deal with each of the comparables in dispute before us. (i). Aptico Limited : 6. Objecting to the selection of this company, learned counsel submitted, it is functionally dissimilar, as it is engaged in providing highend technical consultancy relating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e regarding nature of research studies and tourism. Thus, in our view, since, the company is engaged in diversified activities and proper segmental details have not been maintained, it cannot be treated as comparable to the assessee. The Assessing Officer is directed to exclude this company. (ii). Indus Technical and Financial Consultants: 8. Objecting to selection of this comparable, learned counsel submitted that the company is not functionally similar, as it provides wide variety of services, out of which, only administrative and legal services can be considered as comparable. In this context, he drew our attention to the information contained in the website of the company. He further submitted, no segmental information regarding the revenue breakup of various services are available in the annual report. He submitted, RPT details are not available. Therefore, RPT filter of more than 25% cannot be applied. Thus, he submitted that the company should be rejected. In support, he relied upon the decision of coordinate Bench in case of Motorola Solution India Pvt. Ltd. vs. DCIT (ITA No. 5797/Del/2012) dated 31.10.2019. 9. Learned Departmental Representative submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t services, whereas, the assessee is in market research and testing, we are unable to accept such proposition. On a perusal of the order passed by the TPO, it is very much clear that not only the TPO has treated the assessee to be a business support service provider, but has also selected comparables in that category. In view of the aforesaid, following the decision of coordinate Bench in case of Motorola Solutions India Pvt. Ltd. (supra) in the very same assessment year, we direct the Assessing Officer to exclude this company. (iii). Technicom- chemie (India Ltd.): 12. Objecting to selection of this company, learned counsel submitted, it is functionally different, as it is a marketing organisation engaged in the sale of capital goods. He submitted, it dealt in hi-tech machinery and has a set of company trained service engineers along with suitable spare parts inventory for providing technical support during and after the sales. In this context, he drew our attention to the website extract of this company placed in the paper book. He further submitted, RPT details of the company are not available so as to apply RPT filter of more than 25%. Thus, he submitted, the company ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... attention to the profit and loss account, he submitted that the company has maintained segmental details for all its segments and the Assessing Officer has compared the service segment to the assessee. Further, he reiterated his contention that the decision of Motorola Solutions India Pvt. Ltd. (supra) cannot be applicable, as the assessee is not engaged in providing market support services. 17. We have considered rival submissions and perused materials on record. On a perusal of the annual report of the company placed in the paper book, it is observed that it is engaged in wide range of activities such as pre-feasibility studies, feasibility studies, simulation studies, diagnostic studies, socio-economic studies, master plans and regional development plans, field investigations, detailed engineering including designs, detailed specifications, tendering process, contract and construction management, commissioning and testing, operation and maintenance, quality assurance management, software development and human resource development. The annual report further says that it is a techno-commercial organisation under the aegis of Ministry of Water Resources and utilizes the talent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon ble jurisdictional High Court has accepted ITDC as a comparable to the assessee, we hold that it is comparable to the assessee. Accordingly, the Assessing Officer is directed to include this company as a comparable. (vi). Idma Laboratories Ltd. : 21. Seeking inclusion of this company, learned counsel submitted that the quality control testing segment of the company is comparable to the assessee, as it is engaged in similar activities. In this context, he drew our attention to the relevant pages of the annual report of the company. He further submitted that the company was accepted as a comparable to the assessee by the TPO in assessment year 2005-06 and further upheld by the Hon ble High Court. He further submitted that the TPO himself has accepted this company as comparable to the assessee in assessment year 2010-11, 2011-12 and 2012-13. He submitted, in assessment year 2013-14, learned DRP has accepted this company as a comparable. Thus, he submitted, it cannot be rejected in the impugned assessment year. 22. Drawing our attention to the annual report of the company, learned Departmental Representative submitted that it is a pharmaceutical product manufacturing c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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