DEUTSCHE CIB CENRE P. LD, MUMBAI V. ASST CIT CIR 6(3), MUMBAI

ITA 134/MUM/2013

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3659 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Next Hearing Date: 27-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUNIL JHA
• Assessee Lawyers: JEHANGIR D MISTRI SENIOR
• Keywords: Transfer pricing; International transaction; Revised return; TDS
• Section: 92C; 143(3); 92D; 115JB; 133(6); 10B; 143(1); 143(2); 13; 22

Judgement Text

ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 1 IN THE INCOME TAX APPELLATE TRIBUNAL K BENCH, MUMBAI BEFORE SHRI PRAMOD KUMAR, VICE PRESIDENT AND SHRI RAVISH SOOD, JUDICIAL MEMBER IT (TP) A NO.134/MUM/2013 (ASSESSMENT YEARS: 2008 - 09) DEUTCHE CIB CENTRE PRIVATE LIMITED, BLOCK B - 7, NIRLON KNOWLEDGE PARK, WESTERN EXPRESS HIGHWAY, MUMBAI 400 063 VS. ACIT, CIRCLE - 6(3), ROOM NO. 522, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020 PAN AACCG6204D (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI JEHANGIR D. MISTRI , SENIOR ADVOCATE RESPONDENT BY: SHRI SUNIL JHA , D.R DATE OF HEARING: 20 . 10 .2020 DATE OF PRONOUNCEMENT: 09 .11 .2020 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE A.O UNDER SEC. 144C(13) R.W.S 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 31.10.2012 FOR A.Y. 2008 - 09. THE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING EFFECTIVE GROUNDS OF APPEAL BEFORE US: GROUNDS OF APPEAL 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED TPO AND THE LEARNED AO UNDER DIREC TIONS ISSUED BY THE HON'BLE DR P , ERR ED IN MAKING AN ADDITION OF RS. 121,593,156 TO THE APPELLANT'S TOTAL INCOME BASED ON THE PROVISIONS OF CHAPTER X OF THE I NCOME - TAX ACT, 1961 ('THE ACT'). ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO ERRED AND THE HON'BLE DR P FURTHER ERRED IN CONFIRMING TH E ACTION OF THE LEARNED TPO IN NOT STATING ANY REASONS TO SHOW THAT EITHER OF THE CONDITIONS MENTIONED IN CLAUSES (A) TO (D) OF SECTION 92C (3) OF THE ACT WERE SATISFIED BEFORE MAKING AN ADJUSTMENT TO THE INCOME OF THE APPELLANT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO ERRED AND THE HON'BLE DR P FURTHER ERRED IN UPHOLDING / CONFIRMING THE ACTION OF THE LEARNED TPO OF DISREGARDING THE BENCHMARKING ANALYSIS AND COMPA RABLE COMPANIES SELECTED BY THE APPELLANT BASED ON THE CONTEMPORANEOUS DATA IN THE TRANSFER PRICING STUDY REPORT MAINTAINED AS PER SECTION 92D OF THE ACT READ WITH RULE 10D OF THE INCOME - TAX RULES, 1962 ('THE RULES') AND THE VARIOUS SUBMISSIONS MADE BY THE APPELLANT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO ERRED AND THE HON'BLE DR P FURTHER ERRED IN UPHOLDING / CONFIRMING THE ACTION OF THE LEARNED TPO OF CONDUCTING A FRESH BENCHMARKING ANALYSIS USING NON - CONTEMPORANEOUS DATA AND SUBSTITUTING THE APPELLANT'S ANALYSIS WITH FRESH BENCHMARKING ANALYSIS ON HIS OWN CONJECTURES AND SURMISES. THUS, THE APPELLANT PRAYS THAT THE FRESH BENCHMARKING ANALYSIS CONDUCTED BY THE LEARNED TPO IS LIABLE TO BE QUASHED OR ALTERNATIVELY IGNORED. 5. ON TH E FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE DRP ERRED IN UPHOLDING/CONFIRMING THE ACTION OF THE LEARNED TPO OF SELECTING COMPANIES USING INFORMATION GATHERED UNDER SECTION 133(6) OF THE ACT. 6. ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE HON'BLE DRP ERRED IN UPHOLDING /CONFIRMING THE ACTION OF THE LEARNED TPO OF DISREGARDING THE APPELLANT'S CONTENTION WITH RESPECT TO THE FUNCTIONAL NON - COMPARABILITY OF THE ALLEGED COMPARABLES SELECTED BY THE LEARNED TPO. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HON'BLE DRP ERRED IN UPHOLDING THE ACTION OF THE LEARNED TPO OF CONSIDERING COMPANIES ENGAGED IN RENDERING HIGH - END SERVICES SUCH AS KNOWLEDGE PROCESSING SERVICES, ENGINEERING DESIGN SERVICE S ETC AS COMPARABLE TO THE APPELLANT. 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED AO ERRED AND HON'BLE DRP FURTHER ERRED IN UPHOLDING /CONFIRMING THE ACTION OF THE LEARNED TPO IN CONSIDERING COMPANIES EARNING SUPERNORMAL PROFITS AS COMPARABLE WITHOUT APPRECIATING I COMPARING THE FUNCTIONS, ASSET AND RISK UNDERTAKEN BY SUCH ALLEGED COMPARABLES. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO ERRED AND THE HON'BLE DRP FURTHER ERRED IN UPHOLDING I CONFIRMING THE ACTIO N OF THE LEARNED TPO IN NOT DEMONSTRATING THAT THE MOTIVE OF THE APPELLANT WAS TO SHIFT PROFITS OUTSIDE OF INDIA BY MANIPULATING THE PRICES CHARGED IN ITS INTERNATIONAL TRANSACTIONS WHICH IS A PRE - REQUISITE CONDITION TO MAKE ANY ADJUSTMENT UNDER THE PROV ISION OF CHAPTER X OF THE ACT. 10. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED AO ERRED AND THE HON'BLE DRP FURTHER ERRED IN UPHOLDING / CONFIRMING THE ACTION OF THE LEARNED TPO IN IGNO RING THE PROVISIONS OF RULE 10B (4) OF THE RULES WHI CH AUTHORIZES USAGE OF MULTIPLE YEAR DATA OF COMPARABLE COMPANIES FOR ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 3 THE PURPOSE OF DETERMINATION OF THE ARMS LENGTH PRICE AS DEFINED UNDER SEC.92F(II) OF THE ACT. 11. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED A.O ERRED AND THE HON'BLE DRP FURTHER ERRED IN UPHOLDING I CONFIRMING THE ACTION OF THE LEARNED TPO IN NOT ALLOWING WORKING CAPITAL AND RISK ADJUS TMENT IN ACCORDANCE WITH RULE 10 B(1) (E)(III) OF THE RULES, TO ACCOUNT FOR DIFFERENCE IN THE NET PROFIT MARGINS REALISED BY THE APPELLANT VIS - A - VIS ALLEGED COMPARABLE UNCONTROLLED TRANSACTIONS SELECTED BY THE LEARNED TPO. 12. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEA RNED AO ERRED AND THE HON'BLE DRP FURTHER ERRED IN UPHOLDING I CONFIRMING THE ACTION OF THE TPO IN DENYING THE BENEFIT OF 5 PERCENT FROM THE ARITHMETIC MEAN AS PROVIDED IN PROVISO TO SECTION 92C (2) OF THE ACT, WHILE COMPUTING THE ADJUSTMENT TO TH E TOTAL INCOME OF THE APPELLANT 13. THE AO ERRED IN NOT GRANTING CREDIT FOR THE TAX DEDUCTED AT SOURCE OF INR 467,629, WITHOUT ASSIGNING ANY REASONS THERETO. THE APPELLANT PRAYS THAT THE AO BE DIRECTED TO GRANT CREDIT FOR THE BALANCE TAX DEDUCTED AT SOURCE OF INR 467 ,629. 2. BRIEFLY STATED, THE ASSESSEE COMPANY WHICH IS A SUBSIDIARY OF DEUTSCHE KNOWLEDGE SERVICES PTE. LTD., SINGAPORE AND ENGAGED IN THE BUSINESS OF GLOBAL PROCESSING CENTRE FOR UNDERTAKING BACK OFFICE PROCESSING/SUPPORT SERVICES MAINLY TO SUPPORT THE VARIOUS BUSINESS LINES OF ITS OVERSEAS GROUP ENTITIES, HAD E - FILED ITS RETURN OF INCOME FOR A.Y 2008 - 09 ON 30.09.2008, DECLARING ITS TOTAL INCOME AT RS.70,59,620/ - . THE ASSESSEE HAD DECLARED A BOOK PROFIT OF RS.13,48,51,798/ - UNDER SEC. 115JB OF THE ACT AND PAID TAXES ON IT. SUBSEQUENTLY, THE ASSESSEE HAD FILED A REVISED RETURN OF INCOME ON 31.03.2010, DECLARING ITS TOTAL INCOME AT RS.70,59,620/ - AND A BOOK PROFIT OF RS.13,48,51,798/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UN DER SEC. 143(1) OF THE ACT. THEREAFTER, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC. 143(2) OF THE ACT. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS , THE A.O MADE A REFERENCE UNDER SEC. 92CA(1) OF THE ACT TO THE TRANSFER PRICING OFFICER - 1(3), MUMBAI (FOR SHORT TPO) FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE . THE TPO VIDE HIS ORDER PASSED UNDER SEC. 92CA(3), DATED 31.10.2011 , ON THE BASIS OF A DETAILED REASONING GIVEN IN HIS ORDER SUGGESTED AN ADJUST MENT OF RS.17,13,58,467/ - TO THE ARMS LENGTH PRICE (FOR SHORT ALP ) OF THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE . AFTER RECEIVING THE ORDER ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 4 PASSED BY THE TPO UNDER SEC. 92CA(3), DATED 31.10.2011, THE A.O PASSED A DRAFT ASSESSMENT ORDER UNDER SEC. 14 4C R.W.S 143(3) , DATED 2 8.12.2011, AND PROPOSED AN ADJUSTMENT OF RS. 17,13,58,467/ - TO THE RETURNED INCOME OF THE ASSESSEE . 4. AGGRIEVED, THE ASSESSEE FILED OBJECTIONS AGAINST THE ADJUSTMENT WHICH WAS PROPOSED BY THE A.O BEFORE THE DISPUTE RESOLUTION PANE L - 1, MUMBAI (FOR SHORT DRP ). THE DRP VIDE ITS ORDER UNDER SEC. 144C(5), DATED 27.09.2012 ISSUED CERTAIN DIRECTIONS TO THE TPO FOR RECOMPUT ING THE ALP OF THE I NTERNATIONAL TRANSACTIONS OF THE ASSESSEE. IN COMPLIANCE TO THE DIRECTIONS OF THE DRP THE TPO, VIDE HIS ORDER DATED 25.10.2012 RECOMPUTED THE ALP OF THE INTERNATIONAL TRANSACTIONS AND SUGGESTED AN ADJUSTMENT OF RS.12,15,93,156/ - TO THE VALUE OF THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE . ON THE BASIS OF THE AFORESAID ORDER PASSED BY TH E TPO UNDER SEC.92CA(4), DATED 25.10.2012, THE A.O VIDE ITS ORDER PASSED UNDER SEC. 144C(13) R.W.S 143(3 ) , DATED 31.10.2012 MADE AN ADDITION OF RS.12,15,93,156/ - TO THE RETURNED INCOME OF THE ASSESSEE. THE A.O WHILE CULMINATING THE ASSESSMENT OBSERVED, THA T IN VIEW OF THE PROVISO APPENDED BELOW SEC. 92CA(4) OF THE ACT, THE ASSESSEE COMPANY WOULD NOT BE ENTITLED FOR DEDUCTION UNDER SEC.10A OF THE ACT ON THE AMOUNT BY WHICH ITS TOTAL INCOME WAS ENHANCED AFTER COMPUTATION OF ITS INCOME UNDER THE AFORESAID STAT UTORY PROVISION. IN THE BACKDROP OF HIS AFORESAID DELIBERATIONS THE A.O RESTRICTED THE ASSESSEES ENTITLEMENT TOWARDS DEDUCTION UNDER SEC. 10A TO AN AMOUNT OF RS.18,15,92,931/ - . ACCORDINGLY, THE A.O WORKED OUT THE NET TAXABLE INCOME OF THE ASSESSEE AT RS.1 2,86,52,782/ - UNDER THE NORMAL PROVISIONS. FURTHER, THE BOOK PROFIT OF THE ASSESSEE WAS DETERMINED UNDER SEC. 115JB AT RS.13,48,51,798/ - . 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER PASSED BY THE A.O UNDER SEC. 144C(13) R.W.S143(3), DATED 31.10.2012 HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE SHRI JEHANGIR D. MISTRI , SENIOR ADVOCATE, AT THE VERY OUTSET OF THE HEARING OF THE APPEAL TOOK US THROUGH THE FACTS OF THE CASE. IT WAS SUBMITTED BY THE LD. ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 5 A.R THAT PURSUANT TO THE DIRECTIONS GIVEN BY THE DRP, VIDE ITS ORDER PASSED UNDER SEC.144C(5), DATED 27.09.2012, THE TPO V IDE HIS ORDER PASSED U/S 92CA(4), DATED 25.10.2012 HAD REWORKED OUT THE ALP ADJUSTMENT OF THE INTERNATIONAL TRANSACTION OF THE ASSESSEE AT RS.12,15,93,156/ - . PURSUANT THERETO, THE A.O HAD VIDE HIS ORDER PASSED UNDER SEC. 144C(13) R.W.S 143(3), DATED 31.10. 2012 HAD ASSESSED THE INCOME OF THE ASSESSEE AT RS. 12,86,52,580 UNDER THE NORMAL PROVISIONS AND DETERMINED ITS BOOK PROFIT U/S 115JB AT RS. 13,48,51,798/ - . ADVERTING TO THE NATURE OF THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE, IT WAS SUBMITTED BY TH E LD. A.R THAT THE CONTROVERSY INVOLVED IN THE PRESENT APPEAL IS CONFINED TO THE BENCHMARKING OF THE BUSINESS SUPPORT SERVICES (ITES) OF RS. 135.83 CRORES THAT WERE INTER ALIA PROVIDED BY THE ASSESSEE TO ITS GROUP E NTITIES ACROSS THE WORLD . IT WAS AVERRED BY THE LD. A.R THAT IN CASE IF THREE COMPARABLE COMPANIES VIZ. (I). MOLD TEK TECHNOLOGIES LTD.; (II). ECLERX SERVICES LTD.; AND (III). ACCENTIA TECHNOLOGIES LTD THAT WERE WRONGLY INCLUDED BY THE TPO/DRP AS COMPARABLE IN THE FINAL LIST OF 20 COMPARABLES FO R BENCHMARKING THE BUSINESS SUPPORT SERVICES (ITES) OF RS. 135.83 CRORES THAT WERE INTER ALIA PROVIDED BY THE ASSESSEE TO ITS GROUP ENTITIES DURING THE YEAR UNDER CONSIDERATION WERE EXCLUDED FROM THE LIST OF COMPARABLES, THEN, THE INTERNATIONAL TRANSACTION S OF THE ASSESSEE WOULD BE WITHIN THE TOLERANCE LIMIT +/ - 5% AND THUS WOULD BE WITHIN ARMS LENGTH. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. IT WAS SUBMITTED BY THE LD. D.R THAT AS THE AFOREMENTIONED COMPARABLE COMPANIES WERE RIGHTLY SELECTED BY THE TPO BY ADOPTING THE SEARCH STRATEG Y FOR IDENTIFYING COMPARABLES FOR ITES INDUSTRIES, THEREFORE, THE CLAIM OF THE LD. A.R FOR EXCLUSION OF THE AFORESAID COMPARABLE DID NOT MERIT ACCEPTANCE 7. BEFORE DEALING WITH THE CONTENTIONS OF THE AUTHORISED REPRESENTATIVES FOR BOTH THE PARTIES WE SHAL L BRIEFLY CULL OUT THE FACTS INVOLVED IN THE CASE BEFORE US. AS IS DISCERNIBLE FROM THE RECORDS, THE ASSESSEE WAS REMUNERATED AT COST PLUS 13.24%. A DOPTING THE TRANSACTIONAL NET MARGIN METHOD (TNMM) FOR ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 6 BENCHMARKING ITS INTERNATIONAL TRANSACTIONS AND OPERATING PROFIT/TOTAL COST (OP/TC) AS THE PLI THE ASSESSEE HAD JUSTIFIED THE ARMS LENGTH NATURE OF THE CONTROLLED TRANSACTIONS WITH REFERENCE TO THE PROFIT REALIZED BY 11 COMPARABLE INDEPENDENT COMPANIES. ACCORDINGLY , THE ASSESSEE HAD JUSTIF IED THE ARMS LENGTH NATURE OF ITS INTERNATIONAL TRANSACTIONS OF PROVISION OF BUSINESS SUPPORT SERVICES TO ITS GROUP ENTITIES WITH REFERENCE TO THE PROFIT MARGIN THAT WAS REALISED BY 11 COMPARABLE INDIAN COMPANIES BASED ON FIGURES OF THREE YEARS I.E F.Y. 2005 - 06, F.Y. 2006 - 07 AND F.Y. 2007 - 08 (TO THE EXTENT AVAILABLE ), AS UNDER: SR. NO. COMPANY NAME W E IGHTED AVERAGE NCP (IN %) 1. ALLSEC TECHNOLGOIES LIMITED 6.22 2. CMC LIMITED 19.64 3. C.S SOFTWARE ENTERPRISES LIMITED 24.04 4. COSMIC GLOBAL LIMITED 17.66 5. CRISIL LIMITED 22.98 6. DATAMATICS TECHNOLOGIES LIMITED 5.36 7. ICRA MANAGEMENT CONSULTING SERVICES LIMITED 10.90 8. ICRA ONLINE LIMITED 16.35 9. IDC (INDIA) LIMITED 14.66 10. MPHASIS BFL LIMITED 12.46 11. R SYSTEMS INTERNATIONAL LIMITED 10.47 ARITHMETICAL MEAN (%) 14.61 HOWEVER, IN ORDER TO ESTABLISH THE COMPARABILITY BETWEEN THE MARGINS EARNED BY THE AFORESAID COMPARABLE COMPANIES AN ECONOMIC ADJUSTMENT WAS CARRIED OUT BY THE ASSESSEE IN THE TP STUDY REPORT TO THE RETURN S OF THE COMPARABLE C OMPANIES, PURSUANT WHERETO THE MARGIN S SUBMITTED BY THE ASSESSEE TO JUSTIFY THE ALP OF THE INTERNATIONAL TRANSACTIONS WAS AS UNDER: SR. NO. COMPANY NAME 2006 2007 2008 AVERAGE IN % IN% IN % IN % 1. ALLSEC TECHNOLOGIES LIMITED 20.88 8.55 7.62 14.71 2. CMC LIMITED 6.35 29.42 14.20 17.88 3. CS SOFTWARE ENTERPRISES LIMITED 8.73 12.57 18.86 10.65 4. COSMIC GLOBAL LIMITED 12.17 7.44 21.00 9.80 5. CRISIL LIMITED 6.35 12.55 14.64 9.45 6. DATAMATICS TECHNOLOGIES LIMITED 6.35 7.01 7.62 12.79 7. ICRA MANAGEMENT CONSULTING SERVICES LIMITED 16.80 8.77 7.62 12.79 ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 7 8. ICRA ONLINE LIMITED 6.98 32.66 7.62 19.82 9. IDC (INDIA) LIMITED 11.49 11.64 11.65 11.56 10. MPHASIS LIMITED 6.35 7.01 10.55 6.68 11. R. SYSTEM INTERNATIONAL LIMITED 6.35 7.01 7.62 6.68 OVERALL ARITHMETIC MEAN 9.89 13.15 11.73 11.52 AS THE ARITHMETIC MEAN MARGIN OF THE AFORESAID COMPARABLES WORKED OUT AT 11.52%, IT WAS, THUS, CLAIMED BY THE ASSESSEE THAT AS ITS OPERATING MARGIN WAS MORE THAN THE ARITHMETIC MEAN OF THE AFORESAID COMPA RABLE COMPANIES, ITS I NTERNATIONAL TRANSACTIONS WERE THEREFORE AT ARMS LENGTH PRICE. 6. THE TPO AFTER NECESSARY DELIBERATIONS DID NOT FIND FAVOUR WITH THE ADOPTION OF 2 - 3 YEARS DATA BY THE ASSESSEE TO WORK OUT THE WEIGH TED AVERAGE MARGIN FOR COMPUTING THE PLIS OF THE COMPARABLE COMPANIES. BEING OF THE VIEW THAT THE AFORESAID METHODOLOGY ADOPT ED BY THE ASSESSEE WAS NOT IN CONFORMITY WITH RULE 10D(4) OF THE INCOME TAX RULES WHICH PRESCRIBED ADOPTION OF THE CURRENT YEAR FINANCIALS, THE TPO R EJECTED THE SAME. AS REGARDS THE SELECTION OF THE COMPARABLES COMPANIES BY THE ASSESSEE IT WAS OBSERVED BY THE TPO THAT MANY OF THE SAID COMPANIES IN THE SELECTED SET WERE NOT COMPARABLE FOR THE FOLLOWING REASONS: SR. NO. NAME OF THE COMPARABLE REMARKS 1. ALLSEC TECHNOLOGIES LTD. THE COMPANY IN INTO IT ENABLED SERVICES AND QUALIFIES ALL THE FILTERS APPLIED BY THE TPO. THUS THE SAME IS CONSIDERED AS A COMPARABLE . 2. R. SYSTEMS INTERNATIONAL (SEGMENTAL) THE COMPANYS BPO SEGMENT IS INTO IT ENABLED SER VICES AND QUALIFIES ALL THE FILTERS APPLIED BY THE TPO. THUS THE SAME IS CONSIDERED AS A COMPARABLE. 3. C.S. SOFTWARE ENTERPRISES THIS COMPANY IS ALSO ENGAGED IN SOFTWARE SERVICES. IN THE ASSESSEE WAS ASKED TO PROVIDE A COPY OF THE ANNUAL REPORT OF THE COMPANY WHICH THE ASSESSEE HAS FAILED TO PROVIDE. THE ASSESSEE IS NOT TAKEN SEGMENTAL DATA INSTEAD SERVICES. AS THE EXTENT OF REVENUE FROM SOFTWARE SERVICES HAS NOT BEEN EXCLUDED IN CALCULATING THE MARGIN THIS IS NOT A GO OD COMPARABLE. HENCE, REJECTED. 4. CRISIL LD. TE COMPANY IS ENGAGED IN PROVIDING CREDIT RATING AND RESEARCH SERVICES. FUNCTIONALLY, DIFFERENT, NOT ENGAGED IN ITES AREA HENCE NOT A GOOD COMPARABLE, REJECTED. 5. COSMIC GLOBAL LTD. THE COMPANY IS INTO IT ENA BLED SERVICES AND QUALIFIES ALL THE FILTER APPLIED BY THE TPO. THUS THE SAME IS CONSIDERED AS A COMPARABLE. 6. DATAMATICS TECHNOLOGIES L T D. THE COMPANY IS PROVIDING DIFFERENT KINDS OF BUSINESS SOLUTIONS LIKE BILLING AND PAYMENT SOLUTIONS, E - RETAIL ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 8 SOLUTIONS, PUBLISHING SOLUTIONS, RESEARCH AND ANALYSIS, SERVICE AUTOMATION, DOCUMENT PROCESSING AND WEB ENABLEMENT. THE BUSINESS PROFILE DOES NOT MATCH WITH ASSESSEE COMPANY, FUNCTIONALLY DIFFERENT. HENCE, REJECTED. 7. ICRA MANAGEMENT CONSULTING SERVICES LTD THE COMPANY IS ENGAGED IN MAINLY IN ADVISORY SERVICES. FUNCTIONALLY DIFFERENT, NOT A GOOD COMPARABLE, HENCE REJECTED. 8. IDC INDIA LTD. THE COMPANY IS ENGAGED IN RESEARCH AND INFORMATION SERVICES, FUNCTIONALLY DIFFERENT NOT A GOOD COMPARABLE HENCE, REJECTED. 9. CMC LTD. - ITES THE COMPANY FAILS 25% RPT FILTER APPLIED BY THE TPO. THUS THE COMPANY IS NOT CONSIDERED AS A COMPARABLE. 10. MPHASIS LIMITED THE COMPANY IS PROVIDING APPLICATION DEVELOPMENT AND MAINTENANCE SERVICES, INFRASTRUCTURE OUTSOURCIN G SERVICES AND BPO SOLUTIONS. THE ASSESSEE HAS NOT CONSIDERED SEGMENTAL DATA. ENTITY LEVEL DATA HAS BEEN TAKEN AS A COMPARABLE WHICH IS NOT CORRECT ACCORDINGLY THIS IS NOT A GOOD COMPARABLE AND HENCE REJECTED. 11. ICRA ONLINE LTD. - BPO SERVICES THE COMP ANY IS A SUBSIDIARY OF ICRA LTD. AS PER THE INFORMATION SUBMITTED BY THE COMPANY, ITS ITES SEGMENT FAILS 25% RPT FILTER. IN THIS REGARD, THE ANNUAL REPORT OF THE COMPANY 9CONTAINED IN AR FOR ICRA LTD) AND REPLY RECEIVED FROM THE COMPANY ARE ENCLOSED HEREWI TH AS A SOFT COPY. ACCORDINGLY, THE TPO BEING OF THE VIEW THAT THE BENCHMARKING CARRIED OUT BY THE ASSESSEE WAS ERRONEOUS IN VIEW OF SEC. 92C(3)(A) OF THE ACT, REJECTED THE SAME. FURTHER, THE TPO CONFRONTED THE ASSESSEE WITH A LIST OF 22 COMPARABLES WITH A MEAN MARGIN OF 27.53% ALONG WITH THE SEARCH STRATEGY THAT WAS ADOPTED FOR IDENTIFYING THEM AS COMPARABLES FO R THE ITES SECTOR, AS UNDER: SR. NO. NAME OF THE COMPARABLE SALES TOTAL COST OP. PROFIT OP/TC 1. ACCENTIA TECHNO LOGIES LTD (SEG.) 407293974 287301205 119992769 41.76% 2. ACROPETAL TECHNOLOGIES (SEG.) 208000505 153737300 54263205 35.30% 3. ADITYA BIRLA MINACS WORLDWIDE LTD. 1881373000 184086000 0 40513000 2.20% 4. ASIT C MEHTA FINANCIAL SERVICES LTD. (SEG.) 42434946 38782844 3652102 9.42% 5. CALIBER POINT BUSINESS SOLUTIONS LTD. 531355282 478836110 52519172 10.97% 6. CORAL HUBS LTD. (FORMERLY VISHAL INFORMATION TECHNOLOGIES LTD.) 380784348 252713811 128070537 50.68% 7. COSMIC GLOBAL LTD. 58663285 47577163 11086122 23.30% 8. CROSSDOMAIN SOLUTIONS LTD. 265981723 209497067 56484656 26.96% 9. DATAMATICS FINANCIAL SERVICES LTD. (SEG) 61925019 45915837 16009182 34.87% 10. E4E HEALTHCARE SOLUTIONS LTD. 258185816 221205351 36980465 16.72% ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 9 11. ECLERX SERVICES LTD. 1221990000 736670000 48532000 65.88% 12. GENESYS INTERNATIONAL CORPORATION LTD. 471943198 320181048 151762150 47.40% 13. HCL COMNET SYSTEMS & SERVICES LTD. (SEG.) 3886156998 292411403 0 962042968 32.90% 14. INFOSYS BPO LTD. 8275563629 689552607 5 138003755 4 20.01% 15. ISERVICES INDIA PVT. LTD. 133954773 122242652 11712121 9.58% 16. JINDAL INTELLICOM PVT. LTD. 199036101 217904764 - 18868663 - 8.66% 17. MAPLE ESOLUTION LTD. 337938987 280611090 57327897 20.43% 18. MOLD TEK TECHNOLOGIES LTD. 178458000 90743000 87715000 96.66% 19. R SYSTEMS INTERNATIONAL (SEG.) 213305585 204518285 8787300 4.30% 20. SPANCO LTD. (SEG.) 416992585 375547040 41445545 11.04% 21. TRITON CORP LTD. 1460342806 117950042 7 280842379 23.81% 22. WIPRO LTD. (SEG.) 1157200000 0 889800000 0 267400000 0 30.05% AVERAGE 27.53% IN REPLY, THE ASSESSEE OBJECTED TO THE ADOPTION OF THE AFORESAID COMPANIES AS COMPARABLE FOR THE PURPOSE OF BENCHMARKING OF ITS INTERNATIONAL TRANSACTIONS, WHICH HOWEVER WERE MET OUT BY THE TPO AS PER HIS OBSERVATIONS RECORDED AT PARA 8.2 OF HIS ORDER U/S 92CA(3), DATED 31.10.2011. ACCORDINGLY, THE TPO A DOPTING THE MEAN MARGIN OF 27 . 53% OF THE AFORESAID COMPARABLE COMPANIES WORKED OUT THE ALP OF THE INTERNATIONAL TRANSACTIONS OF THE ASSE SSEE AT RS.152,96,90,467/ - AND SUGGESTED A N ADJUSTMENT OF RS.17,13,58,467/ - . DISPOSING OFF THE OBJECTIONS FILED BY THE ASSESSEE, THE DRP DIRECTED THE A.O TO RE - COMPUTE THE ALP AFTER CONSIDERING THE FOLLOWING 20 COMP ARABLES: SR. NO. COMPANY NAME NCPT 1 . ACCENTIA TECHNOLOGIES LTD. (SEG) 41.76 2. ACROPETAL TECHNOLOGIES (SEG) 35.30 3. ADITYA BIRLA MINACS WORLDWIDE LTD. 2.20 4. ASIT C MEHTA FINANCIAL SERVICES LTD. (SEG.) 9.42 5. CALIBER POINT BUSINESS SOLUTIONS LTD. 10.97 6. COSMIC GLOBAL LTD. 23.30 7. CROSSDOMAIN SOLUTIONS LTD 26.96 8. DATAMATICS FINANCIAL SERVICES (SEG.) 34.87 9. E4E HEALTHCARE SOLUTIONS LTD. 16.72 10. ECLERX SERVICES LTD. 65.88 11. HCL COMNET SYSTEMS & SERVICES LTD. (SEG.) (IF IT IS WITHIN THE R ? T FILTER OF 25%) 32.90 12. INFOSYS BPO LTD. 20.01 13. JSERVICES INDIA PVT. LTD. 9.58 14. JINDAL INTELLICOM PVT. LTD. - 8.66 15. MAPLE E SOLUTIONLTD. 20.43 ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 10 16 MOLD TECH TECHNOLOGIES LTD. 96.66 17. R SYSTEMS INTERNATIONAL (SEG.) 4.30 18. SPANCO LTD. (SEG.) 11.04 19. TRITON CORP. LTD. 23.81 20. WIPRO LTD (SEG.) 30.05 THE TPO GIVING EFFECT TO THE AFORESAID DIRECTIONS OF THE DRP, THEREIN VIDE HIS ORDER PASSED UNDER SEC. 92CA(4) SCALED DOWN THE ADJUSTMENT TO AN AMOUNT OF RS.12,15,93,156/ - . IN FACT, A PERUSAL OF THE ORDER OF THE DRP REVEALS THAT THE LATTER BY DIRECTING THE AO TO WORK OUT THE MEAN MARGIN BY CONSIDERING THE AFOREMENTIONED 20 COMPARABLES HAD ARRIVED AT A MEAN MARGIN OF 24.98% (OP/TC) OF THE SAID COMPARABLES. 7. WE SHALL NOW ADVERT TO THE CONTENTIONS OF THE LD. SENIOR COUNSEL ON THE BASIS OF WHICH HE HAD TRIED TO IMPRESS UPON US THAT THE AFOREMENTIONED THREE COMPARABLE COMPANIES HAD WRONGLY BEEN INCLUDED IN THE FINAL LIST OF COMPARABLES BY THE TPO/DRP , AS UNDER: 8. MOLD - TEK TECHNOLOGIES LTD : IT IS THE CLAIM OF THE LD. A.R THAT THE AFOREMENTIONED COMPARABLE COMPANY, VIZ. MOLD - TEK TECHNOLOGIES LTD . WAS WRONGLY INCLUDED BY THE TPO/DRP IN THE FINAL LIST OF COMPARABLES FOR THE PURPOSE OF BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE F OR THE YEAR UNDER CONSIDERATION . IN ORDER TO DRIVE HOME HIS AFORESAID CLAIM, IT WAS SUBMITTED BY THE LD. A.R THAT THE AFORESAID COMP ANY HAD ACQUIRE D C ROSSROADS D ETAILING INC., AN ENGINEERING SERVICES KPO, IN APRIL, 2007, AND AS A RESULT THEREOF HAD WITNESS ED AN ABNORMAL LY HIGH GROWTH OF 56% IN ITS I.T. DIVISION. APART FROM THAT, IT WAS SUBMITTED BY THE LD. A.R THAT THE AFORESAID COMPA NY HAD DURING THE YEAR EARNED AN ABNORMAL PROFIT OF 95.71%. IT WAS FURTHER SUBMITTED BY HIM THAT THE AFORESAID COMPANY HAD DU RING THE YEAR UNDER CONSIDERATION WITNESSED A SCHEME OF ARRANGEMENT INVOLVING AMALGAMATION BETWEEN TEKMEN TOOL PVT. LTD. AND THE SAID COMPANY AND A MERGER BETWEEN THE SAID COMPANY AND MOLD TEK PLASTICS LTD., WHICH WAS SANCTIONED BY THE HONBLE HIGH COURT OF ANDHRA PRADESH VIDE ITS ORDER ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 11 DATED 25.07.2008. IT WAS THUS THE CLAIM OF THE LD. A.R THAT AS THE AFORESAID COMPANY HAD WITNESSED EXTRAORDINARY EVENTS DURING THE YEAR UNDER CONSIDERATION, IT THUS , COULD NOT HAVE BEEN SELECTED AS A COMPARABLE FOR BENCHMARKING THE I NTERNATIONAL TRANSACTIONS OF THE ASSESSEE . FURTHER, IT WAS AVERRED BY THE LD. A.R THAT THE AFORESAID COMPANY VIZ. MOLD - TEK TECHNOLOGIES LTD . WAS ALSO FUNCTIONALLY INCOMPARABLE TO THE ASSESSEE COMPANY. IN SUPPORT OF HIS AFORESAID CONTE NTION IT WAS SUBMITTED BY THE LD. A.R THAT UNLIKE THE ASSESSEE COMPANY WHICH AS A CAPTIVE ENTITY WAS PROVIDING BUSINESS SUPPORT SERVICE (ITES) TO ITS GROUP ENTITIES ACROSS THE WORLD, THE AFORESAID COMPANY WAS RENDERING ENGINEERING AND DESIGN KPO SERVICES TO ITS CLIENTS, WHICH WAS BEING USED IN CONSTRUCTION OF BUILDINGS. FURTHER, IT WAS SUBMITTED BY THE LD. A.R THAT THE AFORESAID COMPANY WAS USING DESIGN TOOLS LIKE CAD/CAM, STADD PRO AND ITS EMPLOYEES UNLIKE THOSE OF THE ASSESSEE COMPANY WERE HIGHLY SKILLED SOFTWARE ENGINEERS. BY DRAWING SUPPORT FROM THE AFORESAID FACTS, IT WAS SUBMITTED BY THE LD. A.R THAT THE ABOVEMENTIONED COMPANY BEING DIFFERENTLY PLACED IN COMPARISON TO THE ASSESSEE COMPANY WAS THUS LIABLE TO BE EXCLUDED FROM THE FINAL LIST OF COMPARABL ES. 8.1 PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. IT WAS SUBMITTED BY THE LD. D.R THAT AS THE AFOREMENTIONED COMPANY WAS FUNCTIONALLY COMPARABLE AND WAS SELECTED BY THE TPO BY ADOPTING THE SEARCH STRATEGY FOR IDENTIFYING COMPARABLES FOR ITES INDUSTRIES, THEREFORE, THE CLAIM OF THE LD. A.R FOR EXCLUSION OF THE SAID COMPA NY DID NOT MERIT ACCEPTANCE. 8.2 WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD, AS WELL AS THE JUDICIAL PRONOUNCEMENTS THAT HAVE BEEN PRESSED INTO SERVICE BY THEM TO DRIVE HOME THEIR RESP ECTIVE CONTENTIONS. ON A PERUSAL OF PAGE NO. 1 OF ASSESSEES PAPER BOOK (FOR SHORT APB) TO WHICH OUR ATTENTION WAS DRAWN BY THE LD. A.R, WE FIND, THAT AS PER THE ANNUAL REPORT OF THE AFOREMENTIONED COMPANY I.E MOLD - TEK TECHNOLOGIES LTD, IT IS A MATTER OF FACT ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 12 BORNE FROM THE RECORD THAT THE ACQUISITION OF CROSSROADS DETAILING INC., USA, AN ENGINEERING SERVICES KPO, IN APRIL, 2007, HAD PAVED THE WAY FOR THE AFOREMENTIONED COMPANY TO ENTER INTO HIGH RISE BUILDINGS AND COMMERCIAL BUILDINGS SPACE WHICH HAD H IGH GROWTH POTENTIAL. F OR THE SAID REASON, THE AFOREMENTIONED COMPANY I.E MOLD - TEK TECHNOLOGIES LTD HAD ACHIEVED ABOUT 56.49% GROWTH DURING THE YEAR UNDER CONSIDERATION AND REGISTER ED A TURNOVER OF 17.86 CRORE. IN FACT, WE FIND, THAT A COORDINATE BENCH OF THE TRIBUNAL I.E ITAT, DELHI BENCH IN THE CASE OF M/S H & S SOFTWARE DEVELOPMENT AND KNOWLEDGE MANAGEMENT CENTRE PVT. LTD. VS. DCIT, CIRCLE 10(1), NEW DELHI [ITA NO. 436/DEL/2013, DATED 20.03.2018 ] , HAD AFTER INTER ALIA CONSIDERING THE ABNORMAL GROWTH OF 56% OF THE AFORESAID COMPARABLE I.E MOLD - TEK TECHNOLOGIES LTD . DIRECTED EXCLUSION OF THE SAME AS A COMPARABLE FORTHE PURPOSE OF BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE BEFORE THEM. FURTHER, THE ANNUAL REPORT OF THE AFOREMENTIONED COMP ANY I.E MOLD - TEK TECHNOLOGIES LTD REVEALS THAT A SCHEME OF ARRANGEMENT INVOLVING TEKMEN TOOLS PVT. LTD., I.E THE TRANSFEROR COMPANY AND MOLD - TEK TECHNOLOGIES LTD, THE TRANSFEREE COMPANY (THE AFOREMENTIONED COMPA NY ) AND THE DEMERGER BETWEEN MOLD - TEK TECHNOLOGIES LTD, I.E THE DEMERGED COMPANY (THE AFORESAID COMPA NY ) AND MOLD - TEK PLASTICS LTD, RESULTING COMPANY WAS SANCTIONED BY THE HONBLE HIGH COURT OF ANDHRA PRADESH, VIDE ITS ORDER DATED 2TH JULY, 2008 . THE APPOINTED DATA FOR AMALGAMATION AND THE DE MERGER WERE 1 ST OCTOBER, 2006 AND 1 ST APRIL, 2007, RESPECTIVELY, AND THE EFFECTIVE DATE OF THE SCHEME WAS 26 TH AUGUST, 2008 . IN OUR CONSIDERED VIEW, PURSUANT TO THE AFORESAID RE STRUCTURING OF THE AFOREMENTIONED COMPA NY I.E MOLD - TEK TECHNOLOGIES LTD . , THE SAME COULD NOT HAVE BEEN ADOPTED AS A COMPARABLE FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. IN FACT, WE FIND, THAT A SIMILAR VIEW HAD BEEN TAKEN BY THE ITAT, MUMBAI, IN THE CASE OF DI A LOGIC NETWO RKS (I) P. LTD. VS. ACIT, CIRCLE 3(3), MUMBAI [ ITA NO. 7280/MUM/2012, DATED 27.07.2018 ]. I N THE AFORESAID CASE, THE TRIBUNAL HAD CONCLUDED THAT PURSUANT TO THE RESTRUCTURING OF THE AFORESAID COMPANY I.E MOLD - TEK TECHNOLOGIES LTD. IN A.Y ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 13 2008 - 09, IT COULD NOT HAVE BEEN CONSIDERED AS A COMPARABLE. ALSO, WE FIND THAT THE AFOREMENTIONED COMPARABLE IS EVEN OTHERWISE FUNCTIONALLY DISSIMILAR AS IN COMPARISON TO THE ASSESSEE BEFORE US. ON A PERUSAL OF ITS ANNUAL REPORT FOR THE YEAR UNDER CONSIDERATION, WE FIND , THAT THE AFORESAID COMPANY I.E MOLD - TEK TECHNOLOGIES LTD. WAS PROVIDING STRUCTURAL ENGINEERING SERVICES AND HAD ALSO VENTURED INTO REBAR DETAILING FOR CONCRETE BUILDINGS IN THE RECENT PAST. IN FACT, THE FUNCTIONAL PROFILE OF THE AFORESAID COMPARABLE HAD CA ME UP BEFORE THE S PECIAL BENCH OF THE ITAT, MUMBAI, IN THE CASE OF MAERSK GLOBAL CENTRES (I) PVT. LTD. VS. ACIT, CIRCLE 6(3) , MUMBAI, ITA NO.7466/MUM/2012, DATED 07.03.2014 . IT WAS OBSERVED BY THE TRIBUNAL THAT THE AFORESAID COMPANY DURING THE YEAR UNDER CONSIDERATION WAS PIONEER IN STRUCTURAL ENGINEERING KPO SERVICES AND ITS ENTIRE BUSINESS COMPRISED OF PROVIDING ONLY STRUCTURAL ENGINEERING SERVICES TO ITS VARIOUS CLIENTS. FURTHER, AS OBSERVED BY THE TRIBUNAL, FROM THE INFORMATION AVAILABLE ON THE WEBSIT E, IT STOOD REVEALED THAT THE AFORESAID COMPANY WAS A LEADING PROVIDER OF ENGINEERING AND DESIGN SERVICES WITH SPECIALI ZATION IN CIVIL, STRUCTURAL AND MECHANICAL ENGINEERING SERVICES, AND HAD A STRONG TEAM OF SKILLED RESOURCES WITH WORLD CLASS SKILL SETS . AS THEREIN OBSERVED, THE AFORESAID COMPARABLE WAS STATED TO HAVE CONSISTENTLY HELP ED THE CLIENTS TO CUT DOWN DESIGN AND DEVELOPMENT COSTS OF CIVIL, STRUCTURAL MECHANICAL AND PLANT DESIGN BY 30 % - 40% AND HAD DELIVERED TECHNOLOGICALLY SUPERIOR OUTPUTS TO MATCH AND EXCEED EXPECTATIONS. FURTHER, IT IS STATED THAT THE AFORESAID COMPANY HAD IN - HOUSE SOFTWARE DEVELOPMENT TEAM, QUALITY CONTROL TRAINING AND TROUBLE SHOOTING FACILITI ES. AS OBSERVED BY THE TRIBUNAL, THE AFOREMENTIONED COMPANY WAS ALSO RENDERING WEB DESIGN AND DEVELOPMENT SERVICES WITH EXPERIENCE IN TURNING THEM INTO AN EFFECTIVE GRAPHIC DESIGN REPRESENTATION AND CREATING DYNAMIC AND GRAPHIC RICH WEB APPLICATION FROM IT SPECS, DESIGN PRINTS ETC. IN THE BACKDROP OF ITS AFORESAID OBSERVATIONS, IT WAS O BSERVED BY THE TRIBUNAL THAT AS PER THE INFORMATION AVAILABLE IN THE ANNUAL REPORT OF THE AFOREMENTIONED COMPANY I.E MOLD TEK TECHNOLOGIES LTD, AS WELL AS FROM THE DETAILS AVAILABLE ON ITS WEBSITE, IT COULD SAFELY BE CONCLUDED THAT THE COMPANY WAS INVOLV ED IN PROVIDING HIGH - END ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 14 SERVICES TO ITS CLIENTS INVOLVING HIGHER SPECIAL KNOWLEDGE AND DOMAIN EXPERTISE IN THE FIELD AND, THUS , THE SAME COULD NOT BE TAKEN AS A COMPARABLE TO THE ASSESSEE BEFORE THEM WHICH WAS MAINLY INVOLVED IN PROVIDING LOW - END SERVICES . ON THE BASIS OF OUR AFORESAID OBSERVATIONS, WE ARE OF A STRONG CONVICTION THAT IN THE BACKDROP OF THE HIGH - END SERVICES PROVIDED BY THE AFOREMENTIONED COMPANY I.E MOLD - TEK TECHNOLOGIES LTD, IT COULD SAFELY BE HELD TO BE FUNCTIONALLY DISSIMILAR TO THE ASS ESSEE COMPANY , WHICH WAS PROVIDING BUSINESS SUPPORT SERVICES (ITES) TO ITS GROUP ENTITIES ACROSS THE WORLD. ACCORDINGLY, WE FIND OURSELVES TO BE IN AGREEMENT WITH THE CLAIM OF THE LD. A.R, THAT IN THE BACKDROP OF THE FUNCTIONAL DISSIMILARITY ALSO THE AFORE MENTIONED COMPANY I.E MOLD - TEK TECHNOLOGIES LTD . , COULD NOT HAVE BEEN INCLUDED IN THE FINAL LIST OF THE COMPARABLES FOR THE PURPOSE OF BENCHMARKING INTERNATIONAL TRANSACTIONS OF THE ASSESSEE COMPANY FOR THE YEAR UNDER CONSIDERATION. 8.3 ON THE BASIS OF OUR AFORESAID OBSERVATIONS AND THE REASONS GIVEN HEREINABOVE, WE ARE OF A STRONG CONVICTION THAT THE AFORESAID COMPA NY I.E MOLD - TEK TECHNOLOGIES LTD COULD NOT HAVE BEEN SELECTED AS A COMPARABLE FOR BENCHMARKING THE I NTERNATIONAL TRANSACTION S OF THE ASSESSEE COMPANY . ACCORDINGLY , WE HEREIN DIRECT THE A.O TO EXCLUDE THE AFORESAID COMPANY I.E MOLD - TEK TECHNOLOGIES FROM THE FINAL LIST OF COMPARABLES FOR THE PURPOSE OF BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION . 9. E CLERX SERVICES LTD: IT IS THE CLAIM OF THE LD. A.R BEFORE US THAT THE AFOREMENTIONED COMPANY HAD WRONGLY BEEN INCLUDED AS A COMPARABLE BY THE TPO/DRP IN THE FINAL LIST OF THE COMPARABLES . THE LD. A.R HAD SOUGHT EXCLUSION OF THE AFOREMENTIONED COMPANY AS A COMPARABLE PRIMARILY FOR THREE REASONS , VIZ. (I) . EARNING OF ABNORMAL PROFITS DUE TO THE EXTRAORDINARY EVENT OF ACQUISITION OF IGENTICA TRAVEL SOLUTIONS LTD. BY THE COMPANY IN JULY, 200 7; (II) O UTSOURCING OF WORK TO ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 15 THIRD PARTY VENDORS BY THE COMPANY; AND (III) FUNCTIONAL DISSIMILARITY AS IN COMPARISON TO THE ASSESSEE COMPANY. O N THE CONTRARY, IT WAS AVERRED BY THE LD. D.R THAT THE AFORESAID COMPANY WAS SELECTED AS A COMPARABLE BY THE TP O ON THE BASIS OF THE SEARCH STRATEGY CONDUCTED BY HIS OFFICE FOR IDENTIFYING COMPARABLES FOR THE ITES SECTOR . IT WAS THUS SUBMITTED BY THE LD. D.R THAT AS THE AFORESAID COMPANY WAS RIGHTLY SELECTED AS A COMPARABLE FOR BENCHMARKING THE INTERNATIONAL TRANSA CTIONS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, THEREFORE, THERE WAS NO MERIT IN SEEKING OF EXCLUSION OF THE SAME FROM THE FINAL LIST OF COMPARABLES. 9.1 . ON A PERUSAL OF THE ANNUAL REPORT OF THE AFOREMENTIONED COMPANY I.E ECLERX SERVICES LTD . , WE FIND THAT IT IS A MATTER OF FACT BORNE FROM THE RECORD THAT IT HAD DURING THE YEAR UNDER CONSIDERATION ACQUIRED A U.K BASED COMPANY VIZ. IGENTICA TRAVEL SOLUTIONS LTD. ON JULY, 2007. FURTHER, AS PER THE ANNUAL REPORT OF THE AFOREMENTIONED COMPANY I.E ECLERX SERVICES LTD., THE ACQUISITION OF IGENTICA TRAVEL SOLUTIONS LTD. HAD PROVIDED THE AFOREMENTIONED COMPA NY WITH A SET OF 28 LARGE CUSTOMERS PRIMARILY IN EUROPE WHICH HAD STRENGTHEN ED ITS PRESENCE IN THE SAID GEOGRAPHIC REGION . ALSO, THE ACQUISITION OF IGENTICA TRAVEL SOLUTIONS LTD. HAD GIVEN THE COMPANY AN ENTRY PLATFORM IN A NEW VERTICAL - TRAVEL AND HOSPITALITY BESIDES CONSOLIDATING ITS POSITION IN THE RETAIL AND MANUFACTURING SPACE. AS THE AFORESAID COMPANY PURSUANT TO THE ACQUISITION OF IGENTICA TRAVEL SOLUTIONS LTD. ON JULY, 2007 HAD WITNESSED AN ABNORMAL PROFIT OF 65.88% DURING THE YEAR UNDER CONSIDERATION , THEREFORE, IN OUR CONSIDERED VIEW IT COULD NOT HAVE BEEN SELECTED AS A COMPARABLE FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 9.2 FURTHER, A PERUSAL OF THE FINANCIAL RESULTS OF THE AFORESAID COMPANY, PAGE 12 OF APB , THEREIN REVEALS THAT IT HAD OUTSOURCED SERVICES TO THIRD PARTY VENDORS WHICH THEREIN CONSTITUTED 20. 39% OF ITS TOTAL EXPENSE S . THE ASPECT THAT WHEN A COMPANY HAD OUTSOURCED ITS ITES SERVICES, IT CANNOT BE SAID THAT ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 16 ITS BUSINESS RESULTS WOULD BE COMPARABLE TO ANY OTHER ITES SERVICE PROVIDER RENDERING SERVICES ENTIRELY ON ITS OWN, HAD BEEN SO HELD BY A COO RDINATE BENCH OF THE TRIBUNAL IN THE CASE OF GOOGLE INDI A PVT. L TD. VS. DCIT [ITA NO. 1368/BANG/2010] . C ONSIDERING THE OUTSOURCING OF SERVICE S TO THE EXTENT OF 20.39% OF ITS TOTAL EXPENSES BY THE AFORESAID COMPANY , WE ARE OF THE CONSIDERED VIEW THAT THE SAID COMPA NY I.E ECLERX SERVICES LTD . ON THE SAID COUNT ALSO COULD NOT HAVE BEEN ADOPTED AS A COMPARABLE FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 9.3 LASTLY, WE FIND THAT EVEN OTHERWISE THE AFORESAID COMPARABLE VIZ. ECLERX SERVICES LTD . IS FUNCTIONALLY DISSIMILAR TO THE ASSESSEE COMPANY. THE FACTUM OF FUNCTIONAL DISSIMILARITY OF THE AFORESAID COMPARABLE HAD BEEN LOOKED INTO BY THE S PECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MAERSK GLOBLE CENTRE (I NDIA ) PVT. LTD. VS. ACIT, CIRCLE - 6(3), MUMBAI, [ ITA NO. 7466/MUM/2012, DATED 07.03.2014 ] . IT WAS OBSERVED BY THE TRIBUNAL, THAT A PERUSAL OF THE ANNUAL REPORT OF THE AFORESAID COMPANY I.E ECLERX SERVICES LT D. FOR THE YEAR UNDER CONSIDERATION I.E F.Y.2007 - 08, THEREIN REVEALED , THAT THE SAID COMPANY WAS IN THE BUSINESS OF PROVIDING DATA ANALYTICS AND DATA PROCESS SOLUTIONS TO SOME OF THE LARGEST BRAND S IN THE WORLD AND WAS RECOGNIZED AS EXPERTS IN CHOSEN MARKET S - FINANCIAL SERVICES , RETAIL S AND MANUFACTURING. IT WAS OBSERVED BY THE TRIBUNAL, THAT THE AFORESAID COMPANY WAS PROVIDING COMPLETE BUSINESS SOLUTIONS BY COMBINING PEOPLE, PROCESS IMPROVEMENT AND AUTOMATION AND HAD EMPLOYED OVER 1500 DOMAIN SPECIALIS TS WORKING FOR THE CLIENTS. IT WAS OBSERVED, THAT THE AFORESAID COMPANY WAS PROVIDING INDUSTRY SPECIALISED SERVICES FOR MEETING COMPLEX CLIENTS NEEDS, DATA ANALYTICS KPO SERVICE PROVIDER SPECIALISING IN TWO BUSINESS VERTICALS - FINANCIAL SERVICES AND RETAI L AND MANUFACTURING. IT WAS STATED TO BE ENGAGED IN PROVIDING SOLUTIONS THAT NOT ONLY JUST REDUCED COST, BUT HELP ED THE CLIENTS INCREASE SALES AND REDUCE RISK BY ENHANCING EFFICIENC IES AND BY PROVIDING VALUABLE INSIGHTS THAT EMPOWER BETTER DECISIONS. FURTH ER, THE AFORESAID COMPANY WAS STATED TO HAVE A ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 17 SCALABLE DELIVERY MOD E L AND OFFERED SOLUTIONS THAT INCLUDED DATA ANALYTICS, OPERATIONS MANAGEMENT AND REPORT SERVICES. ALSO, IT WAS PROVIDING TAILORED PRO CESS OUTSOURCING AND MANAGEMENT SERVICES ALONG WITH A M ULTITUDE OF DATA AGGREGATION, MINING AND MAINTENANCE SERVICES. THE AFORESAID COMPANY HAD A TEAM DEDICATED TO DEVELOPING AUTOMATION TOOLS TO SUPPORT SERVICE DELIVERY WHICH INCREASED PRODUCTIVITY AND ALLOWED CUSTOMER S TO BENEFIT FROM FURTHER COST SAVING AND OUTPUT GAINS WITH BETTER CONTROL OVER QUALITY. IN THE BACKDROP OF THE AFORESAID FUNCTIONAL PROFILE OF THE ABOVEMENTIONED COMPANY I.E ECLERX SERVICES LTD, THE TRIBUNAL WAS OF THE VIEW THAT AS THE SAID COMPANY WAS MAINLY ENGAGED IN PROVIDING HIGH - END SERVICE S INVOLVING SPECIALISED KNOWLEDGE AND DOMAIN EXPERTISE IN THE FIELD, THUS , IT COULD NOT BE COMPARED THAT THE ASSESSEE BEFORE THEM WHICH WAS MAINLY IN TO PROVIDING OF LOW - END SERVICES TO ITS GROUP CONCERN S . IN THE BACKDROP OF THE FUNCTIONAL PROFILE OF THE A FOREMENTIONED COMPANY I.E ECLERX SERVICES LTD ., WE FIND THAT BEYOND ANY SCOPE OF DOUBT IT IS FUNCTIONALLY DISSIMILAR TO THE ASSESSEE BEFORE US, WHICH IS ENGAGED IN PROVIDING OF BUSINESS SUPPORT SERVICES (ITES ) TO ITS GROUP ENTITIES ACROSS THE WORLD. ACCORDINGLY, DUE TO THE FUNCTIONAL DISSIMILARITY OF THE AFORESAID COMPA NY I.E ECLERX SERVICES LTD, THE SAME COULD NOT HAVE BEEN INCLUDED IN THE FINAL LIST OF COMPARABLES FOR BENCHMARKING THE ASSESSEES INTERNATIONA L TRANSACTIONS. 9.4. ON THE BASIS OF OUR AFORESAID OBSERVATIONS, WE HEREIN DIRECT THE A . O TO EXCLUDE THE AFOREMENTIONED COMPANY I.E ECLERX SERVICES LTD. FROM THE FINAL LIST OF COMPARABLES FOR THE PURPOSE OF BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF T HE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 10. ACCENTIA TECHNOLOGIES LIMITED: THE LD. A.R HAD STATED THAT THE AFORESAID COMPANY HAD WRONGLY BEEN INCLUDED BY THE TPO/DRP IN THE FINAL LIST OF THE COMPARABLES , FOR THE REASON , VIZ. (I) THAT THE PROFITABILITY OF THE AFORESAID COMPA NY WAS SUBSTANTIALLY IMPACTED PURSUANT TO THE AMALGAMATION OF IRIDIUM TECHNOLOGIES AND GEOSOFT TECHNOLOGIES, INTO ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 18 THE ASSESSEE COMPANY; (II) THAT THE AFORESAID COMPANY UNLIKE THE ASSESSEE HAD DEVELOPED AND OWNED UNIQUE I NTANGIBLES/INTELLECTUAL PROPERTY; (III) THE EMPLOYEE COSTS OF THE AFORESAID COMPA NY WAS LOWLY PITCH ED AT 12%; AND (IV) THE AFORESAID COMPANY WAS FUNCTIONALLY DISSIMILAR TO THE ASSESSEE COMPANY. ACCORDINGLY, THE LD. A.R HAD ON THE BASIS OF HIS AFORESAID CON TENTIONS THEREIN SOUGHT EXCLUSION OF THE AFORESAID COMPANY FROM THE FINAL LIST OF COMPARABLES. 1 0.1 PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) HAD STRONGLY SUPPORTED THE INCLUSION OF THE AFORESAID COMPANY IN THE FINAL LIST OF COMPAR ABLES. IT WAS SUBMITTED BY THE LD. D.R THAT AS THE AFORESAID COMPANY BEING FUNCTIONALLY COMPARABLE WAS RIGHTLY INCLUDED BY THE TPO/DRP IN THE FINAL LIST OF COMPARABLES, THEREFORE, THE CLAIM OF THE ASSESSEE FOR EXCLUSION OF THE SAME FROM THE FINAL LIST OF C OMPARABLES BEING DEVOID OF ANY MERIT WAS THUS LIABLE TO BE DISMISSED. 10.2 WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES IN CONTEXT OF THE INCLUSION OF THE AFORESAID COMPANY AS A COMPARABLE BY THE LOWER AUTHORITIES. ON A PERUSAL OF THE ANNUAL REPORT OF T HE AFOREMENTIONED COMPANY I.E ACCENTIA TECHNOLOGIES LTD. , IT TRANSPIRES THAT IT IS A MATTER OF FACT BORNE FROM THE RECORDS THAT TWO UNITS IN TRIVANDRUM, VIZ. (I). IRIDIUM TECHNOLOGIES ; AND (II). GEOSOFT TECHNOLOGIES HAD AMALGAMATED INTO THE PARENT COMPANY I.E ACCENTIA TECHNOLOGIES LTD. (THE AFORESAID COMPA NY ), DURING THE FINANCIAL YEAR 2007 - 08. IN FACT, AS PER THE ANNUAL REPORT THE AMALGAMATION OF THE AFORESAID TWO UNITS IS STATED TO HAVE BEEN THE LAUNCHING PAD FOR THE COMPANY TO CONSOLIDAT E ITS BASE IN INDIA AND ABROAD THROUGH INORGANIC GROWTH AND PROJECT ITSELF AS A GLOBAL PLAYER. ALSO, THE AFORESAID COMPANY HAD ACQUIRED THREE COMPAN IES IN USA, WHICH THEREIN HAD ADDED A HOST OF LONG STANDING CLIENTS TO ITS PORTFOLIO. IN THE BACKDROP OF THE AFORESAID FACTS, WE ARE OF THE CONSIDERED VIEW THAT AS THE AMALGAMATION OF THE AFORESAID UNITS INTO THE AFOREMENTIONED COMPANY I.E ACCENTIA TECHNOLOGIES LTD ., BEING AN EXTRAORDINARY EVENT DURING THE YEAR UNDER CONSIDERATION I.E A.Y. 2008 - 09 , HAD HAD RESULT ED IN THE ENORMOUS GROWTH OF THE COMPANY AND IMPACTED ITS PROFITABILITY, THEREFORE, IT COULD NOT ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 19 HAVE BEEN SELECTED AS A COMPARABLE FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 10.3 FURTHER, WE FIND, THAT AS PER THE ANNUAL REPORT OF THE AFOREMENTIONED COMPANY , I.E ACCENTIA TECHNOLOGIES LIMITED, IT HAD DEVELOPED AND OWNED UNIQUE INTANGIBLE S /INTELLECTUAL PROPERTY /PROCESS I.E COPYRIGHTED PRODUCTS NAMELY IRIDIUM MEDICAL TRANSCRIPTION AUTOMATION SYSTEM (I MTAS) ; IRIDIUM REAL TIME SCHOOL (IRTS) ; IRIDIUM ACCOUNTS MANAGEMENT SYSTEM (IAMS) ; IRIDIUM INVENTORY MANAGEMENT SYSTEM (IIMS) ; IRIDIUM PAYROLL MANAGEMENT SYSTEM (IPMS) ; IRIDIUM BUSINESS TRANSCRIPTION SYSTEM (IBTS) ; AND IRIDIUM HOSPTIAL MANAGEMENT SYSTEM ( IHMS). IN OUR CONSIDERED VIEW, THE OWNING OF THE AFORESAID INTANGIBLE PROPERTY BY THE AFOREMENTIONED COMPANY THEREIN RENDERS IT INCOMPARABLE TO THE ASSESSEE BEFORE US. 10.4 INSOFAR, THE EMPL OYEE COST OF THE AFORESAID COMPANY I.E ACCENTIA TECHNOLOGIES LTD . IS CONCERNED , WE FIND , THAT A PERUSAL OF ITS FINANCIAL S FOR THE YEAR UNDER CONSIDERATION, PAGE 25 OF APB, THEREIN REVEALS THAT THE SAME WORKS OUT AT 12% OF ITS TOTAL COST. KEEPING IN VIEW THE LOW EMPLOYEE COST S OF THE AFORESAID COMPANY, WE ARE OF THE CONSIDERED VIEW THAT IT COULD NOT HAVE BEEN FEASIBILITY SELECTED AS A COMPARABLE FOR BENCHMARKING THE I NTERNATIONAL TRANSACTIONS OF THE ASSESSEE. 10.5 AS REGARDS THE CLAIM OF THE LD. A.R THAT THE AFOREMENTIONED COMPANY IS FUNCTIONALLY DISS IMILAR TO THE ASSESSEE, WE SHALL FOR THE PURPOSE OF ADJUDICATING THE SAME LOOK INTO THE FUNCTIONAL PROFILE OF THE COMPANY. ON A PERUSAL OF THE ANNUAL REPORT FOR THE YEAR UNDER CONSIDERATION, WE FIND THAT THE AFOREMENTIONED COMPANY HAD VENTURED INTO AREAS OF THE HEA L TH CARE SECTOR VIZ. MEDICAL TRANSCRIPTION, MEDICAL CODING, MEDICAL BILLING , RECEIVABLES MANAGEMENT (COLLECTIONS) . IN THE BACKDROP OF THE AFORESAID FUNCTIONAL PROFILE OF THE ABOVEMENTIONED COMPANY I.E ACCENTIA TECHNOLOGIES LTD, AS CAN BE GATHER ED FROM ITS ANNUAL REPORT PAGE 26 29 OF APB, WE ARE OF THE CONSIDERED VIEW THAT THE SAME CAN BE HELD TO BE FUNCTIONALLY DISSIMILAR TO THE ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 20 ASSESSEE WHICH IS INTO PROVISION OF BUSINESS SUPPORT SERVICES (ITES) TO ITS GROUP ENTITIES ACROSS THE WORLD. 10.6 IN THE BACKDROP OF OUR AFORESAID OBSERVATIONS, AND REASONS GIVEN ABOVE , WE ARE OF A STRONG CONVICTION THAT THE ABOVEMENTIONED COMPANY, I.E ACCENTIA TECHNOLOGIES LTD. ALSO COULD NOT HAVE BEEN INCLUDED IN THE FINAL LIST OF THE COMPARABLES FOR THE PURPOS E OF BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 13. AS OBSERVED BY US HEREINABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE ABOVEMENTIONED THREE COMPANIES WHICH WERE INCLUDED BY THE TPO/DRP IN THE FINAL LI ST OF COMPARABLES FOR BENCHMARKING THE I NTERNATIONAL TRANSACTIONS OF THE ASSESSEE , VIZ. (I) . MOLD - TEK TECHNOLOGIES LTD.; (II) . ECLERX SERVICES L T D.; AND (III) . ACCENTIA TECHNOLOGIES LTD., IN TERMS OF OUR OBSERVATIONS RECORDED HEREINABOVE , CANNOT BE HELD TO BE COMPARABLE TO THE ASSESSEE . ACCORDINGLY, WE HEREIN DIRECT THE A.O/TPO TO EXCLUDE THE AFORESAID THREE COMPANIES FROM THE FINAL LIST OF COMPARABLES FOR THE PURPOSE OF BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDER ATION . BEFORE PARTING, WE MAY HEREIN OBSERVE , THAT THE ASSESSEE HAD FURNISHED BEFORE US A C HART , WHEREIN IT IS STATED THAT IN CASE IF THE AFOREMENTIONED THREE COMPANIES ARE EXCLUDED FROM THE FINAL LIST OF COMPARABLES, THEN, ITS I NTERNATIONAL TRANSACTIONS OF PROVISION OF SUPPORT SERVICES TO ITS AES WOULD MEET THE ARMS LENGTH STANDARD AND NO ADJUSTMENT WOULD BE WARRANTED. IT IS STATED BY THE ASSESSEE THAT AS THE VALUE OF ITS I NTERNATIONAL TRANSACTIONS I.E PROVISION OF ITES SERVICES AMOUNTING TO RS.135,83, 3 2 ,000/ - IS HIGHER THAN THE TOLERANCE LIMIT OF +/ - 5% AS PER THE ERSTWHILE SEC. 92C(2) OF THE ACT OF RS.133,19,63,011/ - [RS. 140,20,66,327/ - X 95%], THEREFORE, NO ADJUSTMENT WOULD BE WARRANTED. AS WE HAVE EXCLUDED THE AFOREMENTIONED THREE COMPANIES FROM THE FINAL LIST OF COMPARABLES, THE A.O IS THEREFORE DIRECTED TO VERIFY THE AFORESAID CLAIM OF THE ASSESSEE . IN CASE THE VALUE OF THE I NTERNATIONAL TRANSACTIONS OF THE ASSESSEE IS FOUND HIGHER THAN THE VALUE OF THE TOLERANCE BAND OF +/ - 5% , THEN , NO ADJUSTMENT SHALL BE THEREIN BE MADE BY THE A.O . ITA NO.134/MUM/2013 A.Y.2008 - 09 DE UTCHE CIB CENTRE PVT. LTD. VS. ACIT, CIRCLE - 6(3) 21 14. AS THE TP ADJUSTMENT MADE IN THE HANDS OF THE ASSESSEE HAD BEEN VACATED BY US IN TERMS OF OUR AFORESAID OBSERVATIONS, WE , THEREFORE, REFRAIN FROM ADVERTING TO THE ALTERNATIVE CONTENTIONS RAISED BY THE ASSESSEE BEF ORE US IN CONTEXT OF THE SAID ISSUE, WHICH THUS ARE LEFT OPEN . THE GROUNDS OF APPEAL NOS. 1 TO 12 ARE ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. 15. THE ASSESSEE HAS FURTHER ASSAILED THE ORDER OF THE A , O , ON THE GROUND , THAT HE HAD ERRED IN NOT ALLOWING CREDIT FOR TDS OF RS. 4,67,629/ - , DESPITE THE FACT THAT THE SAME WAS CLAIMED IN THE RETURN OF INCOME. AS THE AFORESAID CLAIM OF THE ASSESSEE WOULD REQUIRE VERIFICATION OF THE FACTS FROM THE RECORDS, WE THEREFORE, DIRECT T HE A.O TO LOOK INTO THE SAID ISSUE . I N CASE IF THE CLAIM OF THE ASSESSE E IS FOUND TO BE CORRECT THEN THE A.O SHALL ALLOW THE CREDIT OF THE AMOUNT OF THE TAX DEDUCTED AT SOURCE . THE GROUND OF APPEAL NO. 13 IS ALLOWED FOR STATISTICAL PURPOSES. 16. THE APPE AL OF THE ASSESSEE IS ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. ORDER PRON OUNCED IN THE OPEN COURT ON 09 . 11.2020 SD/ - SD/ - PRAMOD KUMAR RAVISH SOOD ( VICE PRESIDENT ) ( JUDICIAL MEMBER) MUMBAI, DA TE: 09 .11 .2020 PS: R. KUMAR COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR G BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI