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Income Tax Appellate Tribunal, DELHI BENCH “I-2”: NEW DELHI
Before: SHRI RAJPAL YADAV & SHRI PRASHANT MAHARISHI
Assessee by : Sh.Deepak Chopra, Adv Ms. ManasviniBajpair, Adv Revenue by: Sh. DheerajBhatnagar, CIT DR Date of Hearing 15/02/2016 Date of pronouncement 22/04/2016 O R D E R PER PRASHANT MAHARISHI, A. M. This is the appeal filed by the assessee against the order of the AO, New Delhi 1. order dated 31.12.2013 for the Assessment Year 2009-10 passed in pursuance of directions of DRP-II dated 20th December 2013. The assessee has filed the following grounds of appeal:-
2. That on the facts and circumstances of the case, and in law;
1. The assessment order passed by the Learned Assessing Officer ('Ld. AO') pursuant to the directions of Learned Dispute Resolution Panel ('Ld. DRP') is bad in law and void ab-initio.
2. The reference made by the Ld. AO suffers from jurisdictional error as the Ld. AO has not recorded any reasons in the assessment order based on which he reached the conclusion that it was 'necessary or expedient' to refer the matter to the Ld. TPO for computation of the Arm's Length Price ('ALP'), as is required under section 92CA(i) of the Act.
3. The Ld. DRP and the Ld. AO (following the directions of the Ld. DRP), erred both on facts and in law in confirming the addition of Rs. 15,19,62,H2/- to the income of the appellant (as against the total addition of Rs. 15,03,12,595/- as proposed by the Ld. TPO/ AO in its draft assessment order u/s 143 (3) read with section 1440) by holding that its international transactions do not satisfy the arm's length principle Vertex India Customer Services private Limited V DCIT
Page 2 of 14 envisaged under the Act. In doing so, the Ld. DRP and the Ld. AO has grossly erred in agreeing with and upholding the Ld. TPO's action of: 3.1 not appreciating that none of the conditions set out in section 92C(s) of the Act are satisfied in the present case; 3.2 disregarding the ALP as determined by the Appellant in the TP documentation maintained by it in terms of section 920 of the Act read with Rule 10D of the Income-tax Rules, 1962 ('Rules') as well as fresh search; and in particular modifying/ rejecting the filters applied by the Appellant; 3.3 disregarding multiple year/ prior years' data as used by the Appellant in the TPA' /jf documentation and holding that current year (i.e. FY 2008-09) data for comparable companies should be used despite the fact that the same was not necessarily available to the Appellant at the time of preparing its TP documentation; 3.4 rejecting the comparability analysis undertaken by the Appellant in the TP documentation/ fresh search and conducting a fresh comparability analysis based on application of the following additional/ revised filters in determining the ALP: 3.4.1 exclusion of companies whose data for FY2008-09 was not available; 3.4.2 exclusion of companies with Related Party Transactions ('RPT') greater than 25% of their sales; 3.4.3 exclusion of companies with export sales that are less than 25% of their total revenue; 3.4.4 exclusion of companies where the ratio of service income is less than 75% of their total income; 3.4.5 exclusion of companies that are affected by some peculiar economic circumstances like persistent losses, declining sales etc. 3.4.6 exclusion of companies having different financial year ending (i.e. not March 31, 2009) 3.4.7 applying sales filter of Rs. 5 crore on for selecting comparable companies, thereby rejecting the turnover filter of Rs. 1crore, applied by Appellant; 3.4.8 exclusion of companies having ratio of employee cost to sales less than 25% and rejecting, in particular, the following filters applied by the Appellant in its TP documentation/ fresh search: 3.4.9 companies having other operating income to sales greater than 50% accepted; 3.4.10 companies having advertising, marketing and distribution costs to sales less than 3% were accepted; and 3.4.11 companies having research and development expenses to sales less than 3% were accepted.
Vertex India Customer Services private Limited V DCIT Page 3 of 14 3.5 ignoring the fact that the Ld. TPO/ AO did not abide by and take into cognizance the directions issued by the Ld. DRP and erred in the computation of profit margins of Infosys BPO by excluding foreign exchange gain/ loss from operating income and for which the Appellant has filed a rectification letter u/s 154 of the Act with the Ld. AO; 3.6 in line with the Ld. DRP directions for Infosys BPO, the Ld. TPO/ AO did not rectify the profit margins of Accentia Technologies Limited by excluding foreign exchange gain/ loss from operating income and for which the Appellant has filed a rectification letter u/s 154 of the Act with the Ld. AO; 3.7 including high-profit making companies in the final comparables' set for benchmarking a routine service provider such as the Appellant (disregarding judicial pronouncements on the issue), thus demonstrating an intention to arrive at a pre-formulated opinion without complete and adequate application of mind with the single- minded intention of making an addition to the returned income of the Appellant and on the other hand resorting to arbitrary rejection of low- profit/loss making companies based on erroneous and inconsistent reasons; 3.8 including certain companies that are not comparable to the Appellant in terms of functions performed, assets employed and risks assumed; and 3.9 excluding certain companies on arbitrary/ frivolous grounds even though they are comparable to the Appellant in terms of functions performed, assets employed and risks assumed; 4. The Ld. AO and Ld. TPO erred in not correcting the factual errors in computation of the Operating Profit to Total Cost ('OP/TC') of the comparables.
5. The Ld. AO has grossly erred on facts and in law by initiating penalty under section 271(1X0) of the Act mechanically and without recording any satisfaction for its initiation.
6. The Ld. AO has grossly erred on facts and in law by proposing to compute interest under section 234A, 2346, 234C and 2340 of the Act mechanically and without recording any satisfactory reasons for the same.
The Ld. TPO has disregarding judicial pronouncements in India in undertaking the TP adjustment.
The assessee is engaged in the business of managing call centers, software development and providing information technology enable services from the undertaking registered with the Software Technology Park. Assessee filed its return of income on 29.02.2009 declaring income of Rs.57560375/-. During Vertex India Customer Services private Limited V DCIT
Page 4 of 14 the year assessee company entered into international transactions reflected in Form NO.3CEB annexed with the return of income which are as under:-
Method Amount ( in INR) Nature of international transaction selected TNMM 692138206 Provision of IT enabled services 68280159 Receipt of call Centre support services 120026880 Cost reimbursement for receipt of business promotion services 120141 Purchase of software CUP 18516360 Reimbursement of expenses
Based on above international transaction ld. AO made a reference to Transfer Pricing Officer u/s 92CA(1) of the Income Tax Act.
As per the TP report submitted by the assessee for bench marking of international transaction assessee adopted TNMM method as the most appropriate method and operating profit/ total cost as the profit level indicator selecting 11 comparables with an average margin of 13.19% using multiple year data and compared it with margin of the assessee @15.17% and thereby concluded that international transactions are at Arm’s length. Against this ld. TPO examined the various comparables and filters used by the assessee and considered the various objections raised by the assessee used five comparables and determined OP/OC @38.03% and proposed an adjustment of 150312595/- . The final set up of comparables taken by the ld. TPO and their margin are as under:- Sl No. Comparables OP/OC(%) Cosmic Global Ltd. 50.70 1. Crossdomain Solutions Pvt Ltd. 25.63 2. Infosys BPO Ltd. 24.28 3. Coral Hub Ltd. 37.03 4. Accentia Technologies Ltd. 52.52 5. Average 38.03 Based on this adjustment was worked out as under :- Operating cost (A) 659806536 Vertex India Customer Services private Limited V DCIT
Page 5 of 14 38.03% OP/TC 250924425 Margin (B) 910730961 Arms’s length Price (A+B)=C 760418366 Price charged by the assessee (D) 150312596 Difference (C-D) 16.50% % of difference with ALP 150312595 Adjustment proposed
Before us the assessee has filed revised grounds of appeal
vide letter dated 01.04.2014. In the revised grounds of appeal the assessee has taken 10 grounds of appeal however, at the time of hearing it was submitted that it is just contesting the exclusion of comparables by TPO selected by assessee and inclusion of comparables by ld. TPO. The assessee is contesting inclusion of following comparables by the TPO:- i. Accentia Technologies Ltd. ii. Cosmic Global Ltd. iii. Infosys BPO Ltd iv. Croossdomain Solutions Pvt. Ltd.
7. Assessee is furthercontesting rejection of following comparables by TPO i. Omega Healthcare Management services Pvt Ltd. ii. Jindal Intelecom Ltd.
8. During the course of appeal assessee proposed one more comparable in the name of R. Systems International Ltd. for its inclusion.
9. Before considering the above comparables from the angle of their comparability it is important to understand the brief profile of the company. Vertex India is wholly owned subsidiary of Vertex India Ltd, UK. The share capital of Vertex India is jointly held by Vertex UK and Vertex India, with 0.001 percent and 99.999 percent stakes respectively.
10. Vertex India is engaged in provision of services in the field of customer relationship management, managing call center and IT enabled services. It presently provides these services to the Vertex Group companies under various sub-contractual arrangements. The Indian entity only has an operational interface and the final contracts along with client relationships are managed by Vertex Group Companies. During the period under review, Vertex India Customer Services private Limited V DCIT
Page 6 of 14 Vertex India provided IT enabled services ( ITES) to Vertex Group companies as per the contracts executed between Vertex Group companies and Vertex India. The scope of services performed and the pricing arrangement are defined under the contracts (as amended/ modified from time to time). The services are segmented into two parts :- (i) Sub contracts with Vertex Group companies: under this arrangement, Vertex India provides IT Enables services to Vertex Group companies as per the rates mentioned in its sub-contracts with Vertex Group companies. The contracts with the third party customers have been directly entered into by the Vertex Group companies and not Vertex India. Billing Arrangement The billing rates for each service are mentioned in the price contract which forms a part of the sub-contract executed between Vertex Group companies and Vertex India. The billing rate differs for all the above mentioned business process accounts which are based on the nature of business of the end customers. For example, billings could be on the basis of per activity i.e. per voice call, per email, per hour etc. The per unit rate charged are pre-agreed with the end customers at the time of executing the contracts, depending upon the cost incurred along with a mark-up. Vertex India raises invoices on Vertex Group as per the billing rate (entity basis the sub contracts. Pricing is primarily based on an estimated volume of business expected by Vertex India. Vertex India budgets its fee quotes based on the expected volumes and may renegotiate the rate based on actual volumes. During FY 2008-09, the service fee rates were re-negotiated and Vertex India received additional revenue based on the revised service fee. (ii) Internal support services to Vertex UK: Vertex India provides internal support services such as human resources, business intelligence, knowledge management, IT support service, accounts parable services etc. The cost for this purpose includes all estimated direct and indirect costs associated with the provision of such services. The compensation received by Vertex India is based on a cost plus mark- Vertex India Customer Services private Limited V DCIT Page 7 of 14 up arrangement between the two entities. Over and above Vertex India avails routine call center services form its foreign AE and they are reimbursed on a cost plus mark-up basis. It also avails the business promotion services and reimburses the actual expenses to its AE. It has also purchased software and reimburses certain other expenses.
Before we proceed to examine the comparables several decisions of various tribunals have been cited by the rival parties regarding inclusion or exclusion of certain comparables submitting that these comparables should be excludible or includible at the first instances based on those decisions. We are of the view that each decision has rendered a particular comparable excludible or includible based on the facts of that case as well as the FAR of the assessee whose issues are decided. We are really aware about the precedent value of those decisions while deciding the comparables regarding its suitability. However we feel that the paramount importance shall be on Rule 10B (2) of the Income Tax Rules 1962 which is as under:- “(2) For the purposes of sub-rule (1), the comparability of an international transaction 55c[or a specified domestic transaction] with an uncontrolled transaction shall be judged with reference to the following, namely:— (a) the specific characteristics of the property transferred or services provided in either transaction; (b) the functions performed, taking into account assets employed or to be employed and the risks assumed, by the respective parties to the transactions; (c) the contractual terms (whether or not such terms are formal or in writing) of the transactions which lay down explicitly or implicitly how the responsibilities, risks and benefits are to be divided between the respective parties to the transactions; (d) conditions prevailing in the markets in which the respective parties to the transactions operate, including the geographical location and size of the markets, the laws and Government orders in force, costs of labour and capital in the markets, overall economic development and level of competition and whether the markets are wholesale or retail.” Therefore it may so happen that a comparable company engaged in the similar business which is having the similar FAR may be generally included though same might have been held to be not includible by the courts in some other cases. Further the contractual terms as well as host of other factors stated in above sub rule may determine the comparability analysis. If the difference arising on comparability analysis does not affect the price or profitability of comparable or if so it can be reasonably adjusted same Vertex India Customer Services private Limited V DCIT Page 8 of 14 should be taken as good comparable for the Comparability analysis. Therefore it cannot be ever assumed that if a comparable is held to be excludible in one case , it shall always be excluded in the decisions to follow subsequently. Therefore while deciding the comparability the decisions cited definitely would be perused from this angle.
Now we proceed, based on the above noted service profile of the assessee to examine the FAR of the assessee company with the comparables contested before us. a) Accentia Technologies Ltd. The TPO selected this comparable as according to him it is suitable comparable but assessee has submitted that it is engaged in different and diversified business. It was also submitted that it has acquired another company. However TPO rejected the same stating that the acquisition has happened in March 2009 and therefore its acquisition does not have any impact in the current financial year therefore he retained the comparable. Ld. DRP has accepted the view of the TPO and has retained the same as comparable.
Before us ld. AR contended that this company has extra ordinary event during the year related to acquisition of a foreign entity and further the company has significant amount of goodwill which contributes to higher profitability. It was further submitted that this company is engaged in providing healthcare receivable cycle management and software development services, therefore it is functionally dissimilar. It was further stated that it is earning abnormally high profit. Therefore it should be excluded. Further several decisions of the Tribunal were cited specific to this company where it is held to be excluded. Numbers of decisions were also cited to submit that companies with extra ordinary event such as acquisition, merger, demerger etc. which is an extra ordinary event should be excluded. Against this ld. DR relied on the order of TPO and ld. DRP.
We have carefully considered the rival contentions and also perused the relevant material on record. We have also gone through the annual report of the company furnished before us. The page No.331 where the Schedule 8 of profit and loss of this company shows that it is also engaged in the business of coding i.e. software development. On page No.321 it is mentioned that it Vertex India Customer Services private Limited V DCIT Page 9 of 14 has completed the acquisition of a unit based in USA and now they are offering medical coding and billing services as well. The TPO himself worked out the margin of this company of 52.52%. Ld. AR has drawn our attention to a decision of coordinate bench in ITA No.1897/Del.2014 for AY 2009-10 in case XchaingTechnologies Services India Pvt. Ltd. Vs. DCIT dated 24.04.2015 wherein this company has been directed to be excluded from the final list of comparable as under:- “Accentia Technologies Ltd. 9.1. The TPO considered this company with profit margin of 52.52%as comparable. The assessee’s objection for not treating it as comparable was jettisoned both by the TPO as well as the DRP. The assessee is aggrieved against the inclusion of this company in the final tally of comparables. 9.2. We have heard the rival submissions and perused the relevantmaterial on record. We have also gone through the Annual report of thiscompany for the year in question, which has been placed in the paperbook. It can be noticed from page 31 of the Annual report that during the year under consideration this company completed the acquisition of96% of M/s Oak Technologies Inc., a healthcare back- office processingcompany engaged in medical billing, coding and transcription activitiesand having substantial global work force. The Mumbai Bench of theTribunal in Petro Araldite (P) Ltd. Vs. DCIT (2013) 154 TTJ (Mum)176, has held that a company cannot be considered as comparablebecause of exceptional financial results due to mergers/demergers.Similar view has been taken by the Delhi Bench of the Tribunal inseveral cases including Ciena India Pvt. Ltd. Vs. DCIT (ITANo.3324/Del/2013) vide its order dated 23.4.2015. In view of the factthat there was merger of some entity with Accentia Technologies Ltd.,we hold that this company cannot be considered as comparable. Accordingly, the same is directed to be excluded from the final list of comparables.”
As the above order of coordinate bench is also for AY 2009-10 on the similar facts respectfully following the same we hold that this company cannot be considered as comparable as there is an acquisition of certain companies which is an extra ordinary event. Accordingly the same is directed to be excluded. b) Cosmic Global Ltd.
This company has also been included by the TPO as the margin is 50.70%. However the assessee has objected to inclusion of this company before us stating that it has an extra ordinary event, has a different business model of outsourcing services to third parties and also functionally dissimilar as it Vertex India Customer Services private Limited V DCIT Page 10 of 14 is engaged in the business of translation. Ld. DR relied on the order of TPO as well as DRP. We have carefully considered the rival contentions and we have considered the details filed before us and according to page 332 of the paper book it is noted that it has engaged in translation service and also perusing BPO services. In the case of Xchaing Technology service India Pvt. Ltd Vs. DCIT in ITA 1897/Del/2014 for AY 2009-10 this comparable is considered by the coordinate bench and directed to be excluded as under:- “Cosmic Global Ltd.
The TPO considered Cosmic Global Ltd. as comparable with theassessee company on entity level. We have examined the Annual report of this company for the year in question, which is available in the paper book. It can be noticed that its revenue from operations stands atRs.7,37,02,584/-, which consists of three amounts, namely, Medicaltranscription and consultancy service charges amounting toRs.9,90,737/-; Translation charges amounting to Rs.6,99,35,756/-; and Accounts BPO charges amounting to Rs.27,76,090/-. This company outsourced the activity of Translation. 57.31% of total operating expenses incurred by this company are outsourcing charges. Admittedly, outsourcing is confined to Translation, for which it paid charges at Rs.3.00 crore. In our considered opinion, this company cannot be considered as comparable with the assessee company for the reason of its major activity, namely, Translation, with revenue of Rs.6.99 crore(out of total revenue of Rs.7.35 crore), being dissimilar with theassessee’s activities under this segment. The second reason for considering this company as incomparable on entity level is the business model adopted by it. It can be seen that this company has outsourced major activities in comparison with the assessee doing its business inhouse.It goes without saying that these two business models, namely, outsourcing services and providing in- house services, cannot be compared with each other because of their inherent differences. Since the TPO has considered this company as comparable on entity level, we hold that the same cannot be so treated. Similar view has been taken bythe Tribunal in the case of United Health Group Information ServicesPvt. Ltd. vs. ACIT (ITA No.6312/Del/2012) vide its order dated28.8.2014. Respectfully following the precedent, we direct the exclusionof this company from the list of comparables.”
Therefore respectfully following the decision of coordinate bench we also direct for exclusion of this comparable. c) Infosys BPO Ltd.
This comparable is selected by the ld. TPO with 24.28% margin. The assessee as objected that there is incorrect computation margin of this Vertex India Customer Services private Limited V DCIT Page 11 of 14 company has not given the details of computation. Before us ld. AR contended that it is engaged in high end diversified BPO services with very large operations and it has high brand value as it is associated with Infosys Ltd. It was also submitted that there are extra ordinary events on account of liquation and merger in case of this company and therefore it should be excluded. Ld. DR relied on the orders of TPO as well as DRP.
We have perused the balance sheet filed by the assessee at page 354 to page No.363 of the paper book. At page no.355 there is a details given in Director’s report of the company about liquidation of one company and merger of one company with this company. It is amongst the top 10 third party BPO Company in India. As the company in the BPO services it cannot be compared with the assessee who is engaged in ITES services. Hon’ble Delhi High Court in case of Rampgreen has held that ITES companies and BPO companies are not comparable. Therefore following the decision of Hon’ble Delhi High Court we direct for exclusion of this comparable. d) Crossdomain Solutions Pvt. Ltd.
This comparable has been included by the TPO having 25.63% margin and rejected the contention of the assessee that it is engaged in high end services in the area of payroll mater file employee query management and tax calculation. The same contentions reiterated before us and these two decision were cited before us:- a. Global E:Business Operations Pvt. Ltd. Vs. DCIT (IT(TP)A No.1678/Bang/2012 b. Flextronics Technologies (India ) Pvt. Ltd. Vs. DCIT ITA 1559/Bang/2012 21. The ld. DR relied on the orders of the TPO and DRP.
We have carefully considered the rival contentions and also perused schedule No.13 of annual report for FY 2008-09. We have also perused the decision of coordinate bench cited before us wherein the functional profile of this comparable is discussed. In Global E: Business Operations Pvt. Ltd. vs. DCIT (IT (TP) A No.1678/Bang/2012. The functional profile of the company is as under:-
“(4) Crossdomain Solutions Ltd. 24. This company was considered as a comparable and listed at Sl.No.8 of the comparables chosen by the TPO. It is the stand of the assessee that this Vertex India Customer Services private Limited V DCIT Page 12 of 14 company is not functionally comparable. As observed in the case of Coral Hubs Ltd., the TPO rejected the plea of the assessee on the basis of a non- existent TP order passed for the A.Y. 2007-08. It is seen that the business profile of this company is re-engineered payroll service. This company is also engaged in the development of information systems. These activities are totally different from the activities of the assessee which perform very Limited/low end functions back office services. The review and business functions of Cross Domain are as follows:- “With a decade of experience in Payroll Outsourcing, Crossdomain has created a re-engineered payroll service EFFIPAY – that processes and delivers accurate payroll to clients with headcount up to 1000 employees in just 4 hours*. With Effipay Lite and Effipay Lite Plus, our bouquet of services cover end to end payroll, retrials, reimbursement, tax proof verifications upto issue of Form 16 for employees of our clients across different industry verticals. Our processes are highly scalable and provide end to end payroll solutions to clients with headcount ranging from 5 to 65,000.” “Cross domain’s IT knowledge and domain competence has provided the edge to develop information systems to implement process innovation and continuously increase efficiency and turn-around-time for business critical processes.” Source: http://www.cross-domain.com As can be seen from the above, the business of Cross Domain ranges from high end KPO services, development of product suites and routine low end ITES service. However, there is no bifurcation available for such verticals of services. Therefore the assessee contends that Cross Domain cannot be compared to a routine ITES service provider.
25. We are of the view that in the absence of any reasons given to the contrary either by the TPO or the DRP for regarding this company as a comparable; this company should be excluded from the list of comparables, accepting the plea of the Assessee. We hold accordingly.”
Further Honourable Delhi high court has also held in Rampgreen solutions Pvt Ltd V CIT in 60 taxmann.com 355 as under :- “25. Whilst Voice Call Center represents the lower-end of ITeS, KPO represents services involving a higher level of skills and knowledge. India has vast human resources and a large number of highly-skilled technical professionals. The expression "KPO" indicates the involvement of domain knowledge in providing ITeS. Typically, KPO includes involvement of advance skills; the services provided may include analytical services, market research, legal research, engineering and design services, intellectual management etc. On the other hand, Voice Call Centers are normally involved in customer support and processing of routine data. In the case of Maersk Global Centers (India) (P.) Ltd.(supra) a Special Bench of the Tribunal had referred to a report prepared by National Skill Development Corporation (NSDC) on Human Resource and Skill Requirements in IT and ITES Sector (2022) and noted that the KPO sector has been described as "a value play". The said report also indicates that KPO services are likely to span activities such as "patent advisory, high-end research and analytics, online market research and legal advisory".
Vertex India Customer Services private Limited V DCIT
Page 13 of 14 26. A Knowledge Process is understood as a high value added process chain wherein the processes are dependent on advanced skills, domain knowledge and the experience of the persons carrying on such processe.”
Therefore respectfully following the decision of honourable Delhi high court in Rampgreen Solutions P Ltd where the functional profile of company is very high end KPO services it cannot be compared with the assessee and hence we direct exclusion of this comparable.
The assessee has sought inclusion of Omega Healthcare Management Services Pvt. Ltd. which has margin of 15.43%. TPO has rejected the company that employee cost is not given. Assessee objected before TPO that just because cost is not available it cannot be rejected. TPO has given reason that the human resource drives the whole business and in absence of employee cost it should be rejected. Before assessee has filed application of admission of additional evidence under Rule Income Tax Appellate Tribunal wherein assessee has submitted vide annexure-VII certain details, vide annexure-VIII assessee has given the details of personal expenses. Against the admission of additional evidence ld. DR did not object and therefore the additional evidence filed by the assessee in the form of computation of the operating margin of the comparable is submitted. In view of this this comparable is set aside to the file of ld. TPO with a direction to consider same on merits. 26. The next comparable is Jindal Intellicomltd. This has margin of (-) 4.44%. This is also rejected by the TPO because of year end filter. Ld. AR submitted that merely because the year-end filter is different but the assessee is functionally comparable with the comparable same should be included. As per the application for additional evidence under Rule 29 assessee has submitted the computation of operating margin and annual reports of the company for AY 2009-10 and 2010-11. Ld. DR did not object to the additional evidence. In view of this additional evidence is admitted and this comparable is set aside to the file of TPO to deal with this comparable on merit. 27. The next comparable is an additional comparable submitted before in the form R System International Ltd. And Microland Ld. It is submitted by the ld. AR that it passes all the filters of the TPO except the year end filer. Ld.AR Vertex India Customer Services private Limited V DCIT Page 14 of 14 has also cited decision of Xchanging Technology Services India Pvt. Ltd. wherein it has been held that even if the comparable was not taken in the TP study report or before the DRP same may be admitted. As the assessee has submitted an application for admission of additional evidence in case of these comparable as well as relevant details justifying its inclusion. The ld. DR did not object to the same. In view of this this comparable is set aside to the file of ld. TPO for examining the comparability of this company.
NO other adjustment on the aspect of the transfer pricing has been assailed before us. We therefore set aside the impugned order to this extent and direct ld. AO/ ld. TPO to determine the ALP of the international transaction afresh in consonance with our above direction. In the result the appeal is allowed for statistical purposes. Order pronounced in the open court on 22/04/2016. -Sd/- -Sd/- (RAJPAL YADAV) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 22/04/2016 A K Keot Copy forwarded to