APL LOGISTICS (INDIA) PVT LTD,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX 15(1)(1) , MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER;

therein by assessee are directed against the order of ld. CIT(A)-55, Mumbai dated 19.06.2025for A.Y. 2012-13. The revenue in this appeal has

raised following grounds of appeal:

“1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A)erred in directing the exclusion of the functionally comparable company Apitco Limited only for the reason on account of government ownership, without demonstrating whether government ownership led to the company receiving any (i) grants (i) subsidies or that it was subject to any pricing controls or any preferential treatment vis-à-vis other privately owned companies?

“On the facts and circumstances of the case, the Ld. AO/ CIT(A) has:

It is humbly prayed that the reliefs as prayed for hereinabove and/or such other reliefs as may be justified by the facts and circumstances of the case and as may meet the ends of justice should be granted.

Each of the above grounds of appeal is without prejudice to and independent of one another.”

“Incorrect exclusion of Government owned companies on a without prejudice basis considering ground taken by the Ld. AO stands to be upheld: 1. erred in rejecting EDCIL (India) Ltd and India Tourism Development Corporation Ltd, both selected by the Respondent as comparable companies to benchmark its international transaction of provision of logistic support services to its Associated Enterprises (AEs), on the basis that these companies are government-owned and functionally not comparable to the Respondent without appreciating that both companies are engaged in the provision of support services and are therefore comparable to the Respondent.

Incorrect rejection of comparable engaged in provision of support services 2. erred in rejecting In-House Productions Limited selected by the Respondent as a comparable company, to benchmark its international transaction of provision of logistic support services to its AEs, on the basis that the company provides design and distribution services for print and online media, as well as medical transcription activities similar to ITES, without appreciating that the Healthcare segment selected by the Respondent provides knowledge management solutions and information services tailored to the healthcare sector, and business process outsourcing, making it functionally comparable to the Respondent.

subsidiary of APL Logistics Limited, Singapore (APPL Singapore), which is a

part of Neptune Orient Lines Group. The assessee-company is engaged in

providing local logistics and freight forwarding support services in India

including cargo consolidation services, international freight forwarding

services, warehousing management services and other local logistic

support services. The assessee filed its return of income for A.Y. 2012-13

on 29.11.2012 which was revised on 31.03.2014 declaring loss.The

assessee while filing return of income reported certain international

transaction with its associated enterprises (AE). Consequent upon, the

assessing officer (AO) made a reference to transfer pricing officer (TPO)

for computation of arm’s length price in respect ofinternational transaction.

The TPO suggested the upward adjustment of Rs. 7.30 crore vide its order

dated 29.01.2016. On receipt of report of TPO, the AO passed the draft

assessment order dated 31.03.2016. Copy of draft assessment was served

upon the assessee. The assessee intimated the assessing officer for filing

appeal before ld. CIT(A) instead of filing objection of Dispute Resolution

Panel (DRP). Accordingly, the order under section 143(3) r.w.s. 144C(13)

dated 22.04.2016 was passed.

written submission in support of its transfer pricing study report to justify

its transaction with its AE at Arm’s length. Before ld. CIT(A), the assessee

contended that assessee has benchmark its international transaction

relating to provision of Logistic Support Services in its transfer pricing

study report (TPSR) and adopted Transactional Net Margin Method

(TNMM) as most appropriate method for benchmarking its transactions.

The assessee made payment of Rs. 104.78 Crore to its AE for rendering

various services. The assessee claimed that they have entered into

International Freight Services (IFS) agreement and consolidation services

agreement on 01.01.2009 with Singapore based AE. The details of services

are defined in Schedule-attached with agreement. The assessee is

compensated on cost plus 5.00% of operating cost from provision of

Logistic Support Services to its AE. The assessee carried out an economic

analysis and determined margin of comparable at 7.60%. The assesses

margin was within the +/- 5.00% range as per proviso to section 92C(2)

and claimed its transactions at arm’s length. The assessee selected

following comparable and their arithmetic mean margin was (-) 3.20% in

the following manner:

Sl. No. Name of the company Margin (OP/OC) 1 Cyber Media Research Limited (-) 30.51% 2 EDCIL (India) Ltd. 0.70% 3 In House Productions Limited (-) 1.96% 4 India Tourism Development (-) 7.25% Corporation Limited 5 ICRA Management Consulting 7.18% Services Limited 6 Priya International Limited 12.67% Arithmetic Mean (-) 3.20%

comparable selected by assessee on the ground that they are not

comparable and proposed five (5) new comparable in the following

manner:

Sl. No. Name of the company Margin (OP/OC) 1 Aptico Limited 24.45% 2 AXIS Integrated Systems Limited 9.03% 3 BVG India Limited 24.21% 4 Killick Agencies & Marketing Limited 10.27% 5 Marketing and Consultant & Agencies 10.32% Limited Arithmetic Mean 15.66% 7. In response to show cause notice, the assessee filed detailed reply as to

why the comparables selected by assessee should not be rejected and

proposed comparables selected by TPO should not be considered as good

comparables. The assessee further submitted that TPO erred in computing

the margin of three comparables namely BVG India Limited, Killick

Agencies & Marketing Limited and Marketing and Consultant & Agencies

Limited. However, the TPO without accepting the submission of assessee

rejected these comparables selected by assessee and included five

comparables proposed by TPO in final set of comparables and determined

arm’s length margin at 15.66% thereby making adjustment of Rs. 7.30

crore about the value of international transaction. The assessee also

furnished details of mean margin of different comparables and the reasons

for rejection of various comparables of assessee. The assessee furnished

detail reasoning / submission to justify the comparability of those

comparables which was rejected by TPO. The assessee also gave its submission as to why the comparable included by TPO is not comparable

to the assessee.

submission as well as raised additional ground of appeal. The assessee

raised additional ground of appeal that due to inadvertence amount of Rs.

4.11 crore representing reversal of provision for forex loss has been

offered to tax twice in the computation of total income. In support of

additional ground of appeal, the assessee stated that statutory auditors of

assessee inter alia reported an amount of Rs. 5.30 crore as prior period

income in its financials for A.Y. 2013-14 on account of reversal of provision

for forex loss. The said prior period income on account of reversal of

provision for forex loss pertained to A.Y. 2012-13. As the assessment of AY

2012-13 was in progress, the assessee filed revised computation of income

and contended the said prior period income offered to tax on account of

reversal of provision for forex loss in A.Y. 2012-13. Further, the above

mentioned reversal of provision of forex loss of Rs. 5.30 crore included an

amount of Rs. 4.11 crore which was inadvertently again offered in the

computation of income for A.Y. 2013-14. The said amount to that extent

has been inadvertently added back twice to the total income for A.Y. 2012-

directing for deleting the above referred amount of Rs. 4.11 crore

erroneously tax twice in A.Y. 2012-13.

contention of assessee in para 6.8 of his order. The ld. CIT(A) further noted that assessee was asked to justify additional claim and the break up

that amount of Rs. 5.30 crore of forex loss is inclusive of Rs. 4.11 crore

and that it was already offered to tax. The ld. CIT(A) recorded that despite

allowing opportunity, the assessee failed to furnish documentary evidence

to establish factual claim made by assessee with corroborative evidence.

The assessee failed to give any satisfactory explanation and evidences;

thus, the additional ground of appeal was dismissed.

detailed discussion excluded Aptico Ltd. and BVG India Ltd. And directed to

include Cyber Media Research Ltd. In final set of comparables and directed

TOP / AO to recompute ALP in accordance with law. While excluding BVG

India Ltd., the ld. CIT(A) held that these companies engaged in facility

management services, house-keeping services along with services of solid

waste management including organic and inorganic waste management,

sewage plants for Government entities. These services cannot be treated

with support services. While excluding Aptico, the ld CIT(A) held that it is a

Government owned company and in assesses own case for AY 2010-11

Aptico was excluded by Tribunal. While including Cyber Media Research

Ltd., the CIT(A) held that this companies is primarily engaged in marketing

research and management consultancy services which are in the nature of

support services hence comparable with assessee.The ld. CIT(A) also

relied upon the decision of Delhi Tribunal in Nortel Networks India Pvt. Ltd.

in ITA No. 4765/Del/2011 wherein this comparable was accepted as a

suitable comparable for business support service activities. However, it was directed to verify the claim of assessee about related parties’ turnover

(RTP) filter and to include in final set of comparable. Thus, allowed

substantial relief on transfer pricing adjustment issues.

assessee in its appeal has challenged the finding of ld. CIT(A) in rejecting /

dismissing additional ground of appeal about inadvertent inclusion of

reversal of forex loss of Rs. 4.11 crore offered twice. The Revenue has

challenged the finding of ld. CIT(A) in directing inclusion / exclusion of

various comparables. The assessee in its cross appeal has also raised plea

about incorrect exclusion / rejection of certain comparables which are

engaged in provision of support service.

through the orders of lower authorities carefully. Firstly, we are considering

the various grounds of appeal raised by assessee in its appeal. The learned

authorised representative (ld. AR) of the assessee submits that assessee

filed its return of income for A.Y. 2012-13 on 29.11.2012 and it was

revised on 31.03.2014. The revised as well as original return of income

was based on unaudited financial statement for relevant financial year.

Subsequently, the books of account of assessee were finalised on

13.11.2014. The revised books of account are filed on record. On the basis

of revised books of account, the assessee filed revised computation of

income based on audited financial statement vide their submission dated

14.12.2015 before assessing officer. The copy of application dated

14.12.2015 filed during the assessment proceeding is also placed on record. In the computation of income, the assessee offered an amount of

Rs. 4.11 crore to tax on account of provision of forex loss. In the audited

financial statement, the assessee reported an amount of Rs.

10,28,50,184/- as ‘foreign exchange loss’ in other expenses of which Rs.

4.11 crore was attributed to the aforesaid provision. The provision has

been reported under “other liabilities” in the audited financial statement for

the year. In A.Y. 2013-14, the books of account of assessee was finalised

on 30.10.2015, copy of which is also filed on record. In the audited

financial statement, the assessee reported an amount of Rs. 5.30 crore

under prior period income. The said amount included an amount of Rs.

4.11 crore towards the reversal of aforesaid provision of forex loss booked

in the audited financial statement of F.Y. 2012-13. As the amount pertains

to A.Y. 2012-13, the assessment was going on for said assessment year,

the assessee added this amount of Rs. 5.30 crore on account of reversal of

forex loss to the computation of income in A.Y. 2012-13 which led to an

inadvertent double addition in A.Y. 2012-13 for same provision.

Considering the double addition, in A.Y. 2012-13, during the course of

assessment proceeding in A.Y. 2013-14, the assessee could not claim relief

of same amount in A.Y. 2013-14 hence assessee rectified computation and

withdrew the claim of Rs. 4.11 crore. The computation of income was

accepted by AO in final order of A.Y. 2013-14. Subsequently, to correct the

double addition in A.Y. 2012-13, the assessee filed additional ground of

appeal before ld. CIT(A). Reconciliation of computation of income for A.Y.

2012-13 giving effect to the above rectification of grant relief from double

addition of income is also furnished.

DR) for the Revenue submits that no such claim was filed before assessing

officer. The ld. CIT(A) graciously admitted the additional ground of appeal

yet no details were furnished before him. The assessee now again

agitating the similar claim which has not been examined by lower

authorities, thus, there is no finding of lower authorities for adjudication of

this ground of appeal. No relief, much less claimed before the Tribunal is

available to the assessee.

assessee has raised additional ground of appeal before ld. CIT(A) vide

application dated 30.11.2017. The basis of additional ground of appeal has

been explained by ld. AR of the assessee in his submission which we have

recorded above. We find that ld. CIT(A) while considering the additional

ground of appeal gave his finding that despite allowing opportunity, the

assessee failed to furnish documentary evidence to establish factual claim

made by assessee with corroborative finding and satisfactory explanation.

Before us, the assessee has explained that an amount of Rs. 4.11 crore

has been taxed twice and that revised computation of income was filed

before assessing officer and that they have withdrawn the claim in A.Y.

2013-14. Considering the fact that aforesaid claim of assessee required

factual verification, therefore, the issue is restored back to the file of

jurisdictional assessing officer (JAO) to verify the fact and pass the order afresh in accordance with law. Needless to direct that before passing the

order, JAO shall allow fair and reasonable opportunity to the assessee. The

assessee is also directed to provide complete details including financial

statement for A.Y. 2012-13 as well as 2013-14 to the assessing officer. In

the result, ground no. 1 & 2 in assessee’s appeal is allowed for statistical

purpose.

ITA No. 5008/Mum/2025 (A.Y. 2012-13) (Revenue’s Appeal)

CIT(A) for including Cyber Media Research Limited (Cyber Media) and

excluding Apitco Limited (Apitco) and BVG India Limited (BVG) from final

set of comparables. To support the inclusion of Cyber Media Research

Limited, the ld. AR of the assessee submits that Cyber Media is primarily

engaged in market research and management consultancy services which

is in the nature of support services and comparable with assessee.

Financial details of such comparable company are available at page no.

145 of the paper book. As per Director’s report, this company is considered

as the country’s most comprehensive, dependable and respected source of

market intelligence. This company passes the related party (RPT) filter.

The ld. CIT(A) relied on the decision of Tribunal in Genzyme India (P.) Ltd.

in ITA No. 892/Del/2014 and Goldman Sachs (India) Securities Pvt. Ltd. in

ITA No. 7724/Mum/2011 wherein it was held that Cyber Media is

functionally similar to the business support services provider company. The

Transfer Pricing Officer (TPO) excluded Cyber Media on the ground that it

is wholly owned subsidiary of international data group. The ld. AR of the assessee submits that Cyber Media is considered as support service

provider by Tribunal in Basell Polyolefins India Private Ltd. in ITA No. 2659

of 2016 dated 19.12.2018 (Mumbai-Trib.) and Watanmal (India) Pvt. Ltd.

IT(TP)A No. of 2018 & ITA No. 2407 of 2017 dated 16.09.2022 (Chennai-

Trib.).

as per financial statement of Apitco, the majority share that is 63% share

is held by Government entities like Small Industries Development Bank of

India (SIDBI) and Andhra Pradesh State Financial Corporation. The

Comptroller and Auditor General of India who is the constitutional

authority is responsible for auditing government companies. As per

Ministry of Corporate Affairs, Apitco is a State Government company. The

TPO himself rejected EDCIL and ITDC by taking his view that they are

government owned companies. Apitco is engaged in high end technical

consultancy related and asset reconstruction and management services,

micro enterprise development, skill development, entrepreneurship

development, cluster development among other activities and thus, is not

comparable. To support his submission, the ld. AR of the assessee relied

upon the decision of Bombay High Court in Mumbai Tribunal in Thyssen

Krupp Industries India Pvt. Ltd. ITA No. 2218 of 2013 dated 28.03.2016

(Bombay HC), Thyssenkrupp Industries India Private Limited ITA No. 6460

of 2012 dated 27.02.2013 (Mumbai-Trib.) & Shell India Markets Pvt. Ltd.

ITA No. 193 of 2013 dated 10.12.2024 (Mumbai-Trib.).

that BVG is engaged in providing and undertaking facility management,

mechanized housekeeping, transportation, plant relocations, attendant

services and labour supply. Further, the company also undertakes various

projects for garden development, slum rehabilitation, landscaping,

beautification projects, rural electrification and other contracts for

Government and private organizations and hence cannot be considered a

comparable. The DRP in assessee’s own case for A.Y. 2015-16 and 2020-21

excluded this company from comparable.

TPO. Against the inclusion of Cyber Media, the ld. Sr. DR for the Revenue

submits that this comparable with assessee as per detailed finding of TPO.

A broadly FAR analysis i.e. function performed asset employed and risk

assumed is to be considered while considering the comparability of the

comparable companies. On Apitco, the ld. Sr. DR submits that Apitco is

providing marketing support services which is similar to the activities of the

assessee. For BVG, the ld. Sr. DR for the Revenue submits that this

company is also engaged in the business support services and comparable

with the assessee company as per the detailed finding of TPO.

through the orders of lower authorities carefully. We find that broadly

dispute between the assessee and TPO with regard to inclusion and

exclusion of certain comparables. We find that while rejecting Cyber Media

as a comparable, TPO held that Cyber Media is wholly owned of international data group and financial of this company cannot be

considered as comparable with assessee. However, the ld. CIT(A) after

recording the finding of TPO and the submission of assessee held that

Cyber Media is functionally comparable and should be included in the final

list of comparable subject to passing the RPT filter. We find that Delhi

Tribunal in Genzyme India (P.) Ltd. and Goldman Sachs (India) Securities

Pvt. Ltd. (supra) held that Cyber Media is a comparable to a support

service provider. We also find that Cyber Media is considered as a support

service provider by Mumbai Tribunal in Basell Polyolefins India Pvt. Ltd. In

ITA No. 2659/Mum/2016 dated 19.12.2019 and Chennai Tribunal in

Watanmal (India) Pvt. Ltd. In IT(TP)A No.4 & 2018/Chn/2017. We find that

ld. CIT(A) on his detailed reasoning directed to include this comparable

with the assessee company. Thus, we confirmed the order of ld. CIT(A).

comparable by taking view that services provided by this company are akin

to marketing support services and hence comparable with the assessee

company. We find that ld CIT(A) while excluding this comparable held that

it is Government owned company. Bombay High Court in Thyssenkrupp

Industries India Private Limited (supra) and Delhi High Court in SOS

Services Private Limited (ITA No. 454/2028) held that Government

companies cannot be considered as comparable. We also find that his

comparable was also rejected by Mumbai Tribunal in assesses appeal for

AY 201-11. Thus, we affirm the order of ld CIT(A) in exclusion of Apitco

from final set of comparables.

included this company by taking view that this company is in the business

of support services provider. The ld CIT(A held that BVG is engaged in

facility management house-keeping, solid wate management, organic and

inorganic for Government entity and therefore cannot be compared with

the assessee. No separate segment for routine low-end services was

available in the accounts and therefore in the basket of services rendered

by this company, it cannot be compared with the assessee. We also find

that BVG was excluded as a comparable with support services provider

company by Tribunal in Sabre Travel Network (India) P Limited VS DCIT in

ITA No. 7306/Mum/2017. We also find that DRP in assess own case for AY

2020-21 excluded this comparable in its direction dated 11.06.2024. Thus,

in view of the aforesaid factual discussions, we affirm the order of ld

CIT(A) with our aforesaid additional findings.Thus, in view of the aforesaid

discussion, we do not find merit in all three grounds of appeal raised by

Revenue.

ITA No. 5304/Mum/2025 (A.Y. 2012-13) (Assessee’s Appeal)

various comparables, therefore, adjudication of grounds raised in cross

objection by assessee in support of other comparables have become

academic.

appeal of revenue is dismissed. The Cross Objection filed by the assessee

have become infructuous and dismissed as such.

Order was pronounced in the open Court on 20/05/2026.

Sd/- Sd/-

GIRISH AGRAWAL PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER

MUMBAI, Dated: 20/05/2026 Biswajit

Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file.

By Order

Assistant Registrar/DDO ITAT, Mumbai