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TMI Blog2023 (12) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... hich along with copies of the documents stands supplied to the opposite party. The ld. DR submitted that the arguments should first be heard on the admission of evidence and consequently the arguments on merits should be heard. We find force in the submissions of the ld. DR as in case the additional evidence is allowed, the matter will certainly have to be restored to the TPO and, accordingly, the arguments on the application of the appellant assessee for admission of additional evidences were heard. 4. The ld. counsel for the applicant-assessee submitted that in the present AY, being first year, the assessee had erroneously considered the comparable companies engaged in 'financial and leasing services' (hire purchase and leasing services, investment services, other financial services, other consultancy services) to benchmark the subject international transaction instead of considering comparable companies engaged in providing 'business support services'. It was submitted that during the assessment proceedings, the TPO had also adopted the comparables of the same segment. 4.1 The ld. counsel has taken the Bench through various clauses of the transfer pricing report indicating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rily engaged in travel-related services, financial advisory services and international banking services around the world. Also the business profile of the assessee company, as mentioned, at para 2.3.6 at page 157/paper book is mentioned below:- 2.3.6 In September, 2003, in order to avoid any duplication of efforts between itself and its wholly owned subsidiary AEFESIL, AESIL discontinued its foreign exchange line of business. AESIL aims at being a leading distributor of retail financial products by offering a comprehensive product range, and is conducting its business through a combination of owned and third party distribution networks. It presently markets products (Consumer cards and installments loans) of American Express Bank Ltd. The details about the business operation of the assessee company in the financials/Directors report, as mentioned in page 217 /paper book is reproduced below:- Business Operations At the close of working hours of 1st September, 2003, your Company had discontinued the foreign exchange line of business. Consequent t the discontinuation of the foreign exchange business, your Company decided to write off intangible assets (exceptional items) rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extracted segmental financial data from prowess (402 companies having segmental data) using the industry classification query module as given in Prowess, and selected those segments (of companies), which were classified under the 'Services ' industry. This resulted in 203 segments. Further, from the aforesaid, the following sub industry classification were selected: * Financial &; Leasing services * Companies classified under Financial Consultancy services, Other consultancy and Business activity nec, all of which fall under the sub-type of Business Services. Based on the search conducted by the assessee company from two data banks, the assessee has come up with this comparable companies and the brief financial profile of these companies, as mentioned by the assessee in TPSR at page 204 is mentioned below:- Appendix F: Business Description of Comparable Companies 1. Geojit Financial Services Ltd. The company is into stock broking and distribution of financial products. 2. Integrated enterprises (India) Ltd. The company is engaged in the business of mobilizing of financial products. 3. Keynote Corporate Service Ltd. The Company is engaged in handling assignment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal required these documents for evidences at its own instance or (ii) if the income-tax authorities have decided the case without giving sufficient opportunities to the assessee. It was submitted that both the conditions are not satisfied. In this regard, the ld. DR relied on the Tribunal decision in the case of Kanniappan Murugadoss vs. Income Tax Officer, Non Corporate Ward- 7(4), Chennai, 79 taxmann.com 244/164 ITD 260 (Chennai Tribunal 2017); judgement of the Hon'ble Bombay High Court in the case of CIT vs. Smt. Kamal C. Mahboobbani, 81 taxmann 311 (Bom)/214 ITR 15 (Bom); judgement of the Hon'ble Delhi High Court in the case of CIT vs. Tax Hundred India Pvt. Ltd., 239 CTR 263; and the judgement of the Hon'ble High Court of Gujarat in the case of Fairdeal Filaments Ltd. vs. CIT, 302 ITR 173 (Guj). On the basis of these decisions, the ld. DR submitted in written submissions that: (i). The Tribunal powers to admit additional evidence are highly limited. In fact the Rule 29 is couched in negative language, as it does not confirm any right on the parties to produce additional evidence before the Tribunal, in fact it is the opposite i.e. it takes away the right to file a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of original assessment. The assessee is part of the Amex group which has operations in more than 130 countries with revenue in billion in dollars. The assessee company employs best of the brains/Chartered Accountants, financial expert etc. and after a detailed discussion with their Transfer Pricing Expert they have prepared a TP Study report mandated as per Income Tax Act and now they are trying to negate it by creating a fresh TP report which they are not permitted to do under the provision of Income Tax Act. The assessee company again cannot be called a negligent or ignorant person and by way of fabricated new evidence they cannot be granted another chance or opportunity at the Appellant Tribunal level to scuttle the process of law. C. Thus if in the case of assessee, an application of additional evidence is allowed then it will be from the difficult to bring finality in the completed cases because every person who is unsuccessful at the lower stages will try to create/fabricate new evidence which is in total diversion/opposite to the TPSR prepared by assessee /independent TP experts during the original assessment level. Thus it is humbly requested that the assessee application ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... own on the question of determination of ALP. The point is that in present AY the TPO accepted the comparables of segment taken by assessee without questioning if the assessee was right in taking up comparable of segment financial services/ selling of financial products however in same set and scope of business activity and model when accepted in AY 2008-09 onwards the assessee's changed stand with comparables of different segment of 'business support services'. Thus the comparables of segment AY 2008-09 onwards are binding on the TPO and if those are accepted the whole TPSR becomes defective and that causes prejudice to both the parties. In any case, if additional evidence of fresh TPSR on new set of comparables is allowed, the TPO will still have a right to not consider the same and allege that in present AY the comparables of right segment were taken. 8. Now coming to the question of admissibility of additional evidence we are of the considered view that Rule 29, bars the right of parties to the appeal to produce additional evidence either oral or documentary. However, if the Tribunal requires any documents to be produced or any witness to be examined or any affidavit to be file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s support services'. Hence at the end, before us, neither the assessee nor the Revenue can completely justify the comparables accepted by them. 11. Further, the assessee has sought indulgence of the Bench to allow the additional evidences of new set of comparables, but, the same require verification as the whole exercise has to be done again by the TPO who has right to rebut the same. Thus, the question of admissibility of these evidences as to the assessee had opportunity to lead this evidence at the first instance or that the assessee has created this evidence subsequently is not of much consequences. The evidence is from the contemporary data of relevant AY only so there is no question of assessee taking advantage of subsequent facts or something created by assessee ex post facto. The nature of fresh set of comparables require a fresh look into all the issues, substantially and incidentally involved due to erroneously taking comparables of wrong segment by both the assessee and the TPO. 12. So the proposition of law as relied by Ld. DR are not applicable to the facts and circumstances before us as in none of the cases cited there was a question of fact involved that may be eve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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