SHELL INDIA MARKETS PVT. LTD.(MERGED WITH SHELL INDIA MARKETS PVT. LTD.), MUMBAI V. A.C.I.T. LTU, MUMBAI

ITA 193/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8283 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: K
• Next Hearing Date: 01-12-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 07-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K C P PATNAYAK
• Keywords: Related party transaction; Transfer pricing; International transaction
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL K BE NCH, MUMBAI , !'# , $ % BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./I .T.A. NO. 193/MUM/2013 ( & & & & / ASSESSMENT YEAR : 2008-09 M/S. SHELL INDIA MARKETS PVT. LTD., (IN THE CASE OF ERSTWHILE SHELL INDIA PVT. LTD THAT HAS BEEN MERGED WITH SHELL INDIA MARKETS PVT. LTD), 1018, MAKER CHAMER V, 10 TH FLOOR, NARIMAN POINT, MUMBAI-400 021 / VS. THE ACIT, LARGE TAXPAYER UNIT, MUMBAI ' $ ./ ( ./ PAN/GIR NO. : AAICS 1404P ( ') / APPELLANT ) .. ( *+') / RESPONDENT ) ') , / APPELLANT BY: SHRI AJIT KUMAR JAIN *+') - , / RESPONDENT BY: SHRI K.C.P. PATNAYAK - ./$ / DATE OF HEARING :2.12.2014 01& - ./$ / DATE OF PRONOUNCEMENT:10.12.2014 2 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ASSESSMENT ORDER DT. 31.10.2012 MADE U/S. 143(3) OF THE ACT R. W. SECTION 144C(3) OF THE ACT. ITA NO. 193/M/2013 2 2. THE ASSESSEE WAS INCORPORATED AS A 100 PERCENT S HELL OWNED COMPANY IN 1996 TO RENDER SUPPORT IN THE DEVELOPMEN T OF BUSINESS IN PETROLEUM, NATURAL GAS, PETROCHEMICALS AND RENEWABL E ENERGY OF THE SHELL GROUP OF INDIA. DURING THE YEAR UNDER CONSID ERATION, THE ASSESSEE WAS ENGAGED IN PROVISION OF ADVISORY AND S UPPORT SERVICES TO ITS ASSOCIATED ENTERPRISES(AES). RETURN OF INCOME WAS ELECTRONICALLY FILED ON 28.9.2008 DECLARING TOTAL INCOME AT RS. 4, 47,32,587/-. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT. DRAFT ASSESSMENT ORDER U/S. 143(3) R.W. SEC. 144(3) WAS PASSED ON 26.12.20 11. THE OBJECTIONS WERE RAISED BY THE ASSESSEE U/S. 144C(2) BEFORE THE DISPUTE RESOLUTION PANEL (DRP). THE DRP ISSUED DIR ECTIONS U/S. 144C(5) DT. 25.9.2012. CONSEQUENT TO THE DIRECTIONS BY THE DRP, THE ASSESSMENT WAS COMPLETED. 2.1. DURING THE YEAR, THE ASSESSEE HAD, INTER ALIA, ENTERED INTO AN INTERNATIONAL TRANSACTION OF RENDERING ADVISORY AND SUPPORT SERVICES TO ITS AES FOR WHICH IT WAS COMPENSATED AT COST PLUS 1 0%. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REFERRED THE COMPUTATION OF ARMS LENGTH PRICE (ALP) OF THE INTERNATIONAL TRANSACTIONS TO THE TRANSFER PRICING OFFICER (TPO). 2.2. IN ITS TP STUDY REPORT, THE ASSESSEE HAD BENC HMARKED ITS INTERNATIONAL TRANSACTION BY COMPUTING ARMS LENGTH MARGIN FOR PROVISION OF ADVISORY AND SUPPORT SERVICES BY TAKIN G FOLLOWING COMPARABLES INTO CONSIDERATION: COMPANY NAME MAR-06 MAR-07 MAR-08 WEIGHTED AVERAGE AGRIMA CONSULTANTS INTERNATIONAL LTD. -8.62 0.69 - -3.46 ITA NO. 193/M/2013 3 APOLLO SINDOORI HOTELS LTD. -0.99 - - -0.99 ARTEFACT PROJECTS LTD. 26.60 31.11 - 29.25 CYBER MEDIA EVENTS LTD 9.53 9.11. - 9.29 EDUCATIONAL CONSULTANTS INDIA LTD. 4.81 5.68 - 5.21 ICRA MANAGEMENT CONSULTING SERVICES LTD 17.45 16.53 4.18 11.44 INDIA TIOURISM DEVELOPMENT CORPN. LTD 1.26 1.64 - 1.46 HINCON TECHNOCONSULT LTD. 13.42 - - 13.46 MATHESON BOSANQUET ENTERPRISES LTD 8.20 -2.34 - 4.29 NTPC ELECTRIC SUPPLY LTD 4.80 17.76 - 13.36 TIMES INNOVATIVE MEDIA LTD 10.35 1.20 - 4.03 TRADE WINGS LTD. -4.12 12.63 - 3.59 TRAVEL CORPN. (INDIA)LTD 19.90 15.25 - 18.01 ARITHMETIC MEAN (%) 7.89 9.93 4.18 8.28 2.2. DURING THE COURSE OF THE TRANSFER PRICING PROC EEDINGS, THE TPO ANALYZED THE CHOICE OF COMPARABLES USED BY THE ASSE SSEE. BASED ON HIS ANALYSIS, THE TPO REJECTED FEW COMPARABLES SELE CTED BY THE ASSESSEE IN ITS DOCUMENTATION ON THE GROUND OF FUNC TIONAL NON- COMPARABILITY AND IN ADDITION, THE TPO SELECTED SOM E OF THE COMPARABLES WHICH WERE REJECTED BY THE ASSESSEE IN ITS ECONOMIC ANALYSIS. THE FINAL COMPARABLES SELECTED BY THE TP O FOR THE PURPOSE OF DETERMINING THE ARMS LENGTH PRICE ARE AS UNDER: S. NO. NAME SELECTED BY OP/TC(%) 1. ARTEFACT PROJECTS LTD. APPELLANT 32.34 ITA NO. 193/M/2013 4 2. EDUCATIONAL CONSULTANTS INDIA LTD. APPELLANT 1.87 3. ICRA MANAGEMENT CONSULTING SERVICES LTD APPELLANT 4.18 4. NTPC ELECTRIC SUPPLY LTD APPELLANT 39.21 5. IDC (INDIA) LTD TPO 15.48 6. INDUS TECHNICAL & FINANCIAL CONSULTANTS LTD. TPO 14.56 7. RITES LTD. (SEG) TPO 25.77 8. TECHNICOM-CHEMIE (INDIA)LTD TPO 7.33 9. WATER & POWER CONSULTANCY SERVICES (INDIA) LTD. (SEG) TPO 40.37 AVERAGE 20.12 3. AGGRIEVED BY THE INCLUSION OF COMPANYS MENTIONE D AT S. NO. 1, 4, 7 & 9 HEREINABOVE, THE ASSESSEE RAISED OBJECT ION BEFORE THE DRP. IT WAS CONTENDED BEFORE THE DRP THAT THE 10% MARK-U P EARNED BY THE ASSESSEE IS APPROPRIATE. IT WAS CLAIMED THAT THE T PO ERRED IN REJECTING THE TP ANALYSIS MADE BY THE ASSESSEE. OB JECTIONS WERE ALSO RAISED IN RESPECT OF THE SELECTION OF THE COMPARABL ES MADE BY THE TPO. THE OBJECTIONS WERE DULY CONSIDERED AND NECES SARY DIRECTIONS WERE ISSUED BY THE DRP FOR THE GUIDANCE OF THE AO. 4. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE STATED THAT TWO COMPANIES NAMELY M/S. ARTEFACT PROJECTS LTD. AND M/S. NTPC E LECTRIC SUPPLY LTD. WERE INITIALLY SELECTED BY THE ASSESSEE TO BEN CH MARK ITS INTERNATIONAL TRANSACTION OF PROVISION OF ADVISORY AND SUPPORT SERVICES BUT LATER ON CLAIMED FOR THE EXCLUSION OF THESE TWO COMPANIES FROM THE FINAL LIST OF COMPARABLES AS THESE WERE FUNCTIO NALLY NOT ITA NO. 193/M/2013 5 COMPARABLE AND HAVE HIGH RELATED PARTY TRANSACTION. THE LD. COUNSEL FURTHER STATED THAT TWO OTHER COMPANIES NAMELY M/S. RITES LTD. AND M/S. WATER & POWER CONSULTANCY SERVICES (INDIA) LTD ., WHICH WERE CONSIDERED BY THE TPO ARE ALSO NOT FUNCTIONALLY COM PARABLE. THE LD. COUNSEL EXPLAINED IN DETAIL WHY THESE COMPANIES SHO ULD BE EXCLUDED FROM THE FINAL LIST OF COMPARABLES. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE ASSESSMENT ORDER. 7. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTH ORITIES BELOW ALONGWITH RELEVANT DOCUMENTARY EVIDENCES BROUGHT TO OUR NOTICE DURING THE COURSE OF HEARING. LET US NOW CONSIDER THE COMPANIES WHICH HAVE BEEN STRONGLY OBJECTED BY THE LD. COUNSE L FOR BEING CONSIDERED IN THE FINAL LIST OF COMPARABLES. I) M/S. ARTEFACT PROJECTS LTD. THIS COMPANY PROVIDING INFRASTRUCTURE SERVICES WHIC H INCLUDES SERVICES AND FACILITIES INCLUDING TRANSPORTATION NE T WORK IN THE FORM OF RAILWAYS, ROADWAYS AND PORT AND CIVIL AVIAT ION, TELECOMMUNICATION SYSTEM AS WELL AS THE POWER SYSTE M. THE TOTAL NET INCOME SHOWN BY THIS COMPANY IS AT RS. 22,65,40,111/-. TRANSACTIONS WITH RELATED PARTIES SHOWS THAT THIS COMPANY HAS RECEIVED PROJECT MANAGEMENT CONSUL TANCY FEES FROM THE RELATED PARTIES AT RS. 19,25,04,855/- WHICH MEANS THAT RELATED PARTY TRANSACTION OF THIS COMPANY COME S TO 84.97%. SINCE THIS COMPANY IS HAVING A VERY HIGH P ERCENTAGE OF RELATED PARTY TRANSACTION, IT CANNOT BE CONSIDER ED AS A ITA NO. 193/M/2013 6 COMPARABLE. WE ACCEPT THE CONTENTION OF THE LD. CO UNSEL AND DIRECT FOR THE EXCLUSION OF THIS COMPANY FROM THE F INAL LIST OF COMPARABLES. 2) M/S.NTPC ELECTRIC SUPPLY LTD THE PROFILE OF THIS COMPANY SHOW THAT IT IS A WHOL LY OWNED SUBSIDIARY OF NTPC LTD WHICH IN TURN IS A GOV ERNMENT OWNED COMPANY MAKING THIS COMPANY ALSO UNDER THE CA TEGORY OF PUBLIC SECTOR UNDERTAKINGS. FURTHER M/S. NTPC I S A GOVERNMENT OF INDIA ENTERPRISE AND IS INVOLVED IN E NHANCING AND BRINGING SECTORAL REFORMS PROCESS AND HAS BEEN PARTICIPATING IN VARIOUS PROJECTS OF DISTRIBUTION, INFRASTRUCTURAL DEVELOPMENT PROGRAMMES UNDER CONSULTANCY ASSIGNMENT S. FURTHER, THIS COMPANY IS ALSO ENGAGED IN RURAL ELEC TRIFICATION ON TURN-KEY BASIS AND ALSO ENGAGED IN POST AWARD PROJE CT MONITORING AND SUPERVISION OF QUALITY WORK FOR THE PROJECT UNDER EXECUTION. CONSIDERING ALL THESE FACTS, THIS COMPANY IS NOT FUNCTIONALLY COMPARABLE. IT IS THEREFORE DIREC TED TO EXCLUDE THIS COMPANY FROM THE FINAL LIST OF COMPARABLES. 8. IT WOULD BE PERTINENT HERE TO MENTION THAT THE A BOVE MENTIONED TWO COMPANIES WERE CONSIDERED AS COMPARABLES BY THE ASSESSEE ITSELF WHICH WAS SUBSEQUENTLY CLAIMED TO BE EXCLUDED FROM THE FINAL LIST OF COMPARABLES QUA ADDITIONAL GROUND OF APPEAL. 9. IN OUR CONSIDERED VIEW, THE ASSESSEE IS NOT BARR ED FOR RAISING A CLAIM OF REJECTION OF COMPARABLES BEFORE US EVEN TH OUGH THE COMPARABLES WERE CHOSEN BY THE ASSESSEE ITSELF IN I TS TP STUDY. WE DRAW SUPPORT FROM THE DECISION OF THE TRIBUNAL IN T HE CASE OF STREAM ITA NO. 193/M/2013 7 INTERNATIONAL SERVICES LTD. IN ITA NO. 8997/M/2010 WHEREIN IT WAS HELD AS FOLLOWS: HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE PURPOSE OF INC OME TAX ASSESSMENT IS TO DETERMINE CORRECT INCOME OF THE ASSESSEE. AS THE REVENUE CANNOT ALLOW AN ASSESSEE TO DEPRESS HIS INCOME, IN THE SAM E MANNER, IT IS NOT PERMISSIBLE TO THE REVENUE TO TAKE ADVANTAGE OF THE IGNORANCE OR MISTAKE OF THE ASSESSEE IN OFFERING MORE THAN DUE I NCOME. IT IS TRITE THAT NO TAX CAN BE COLLECTED EXCEPT AS PER LAW. CIR CULAR NO. 14(XI-35) OF 1955 DATED 1.4.1955 CAUTIONS THE OFFICERS OF THE DEPARTMENT FROM TAKING ADVANTAGE OF IGNORANCE OF AN ASSESSEE AS TO HIS RIGHTS. THE HONBLE BOMBAY HIGH COURT IN COURT IN THE CASE OF N IRMALA L. MEHTA V. A. BALASUBRAMANIAM, CIT [2004] 269 ITR 1 HAS HEL D THAT THERE CANNOT BE ANY ESTOPPEL AGAINST THE STATUTE. ARTICLE 265 OF THE CONSTITUTION OF INDIA CLEARLY PROVIDES THAT NO TAX SHALL BE LEVIED OR COLLECTED EXCEPT BY AUTHORITY OF LAW. SIMILAR VIEW HAS BEEN TAKEN RECENTLY BY THE HONBLE JURISDICTIONAL HIGH COURT I N SANCHETI SOFTWARE AND SOLUTIONS P. LTD. VS. CIT (2012) 349 I TR 404 (BOM). IN OUR CONSIDERED OPINION THERE CAN BE NO ESCAPE FROM THE PROPOSITION THAT THE ASSESSEE IS ENTITLED TO ARGUE AT LEAST BEF ORE THE APPELLATE AUTHORITIES THAT A WRONG STAND TAKEN AT THE TIME OF FILING THE RETURN OF INCOME SHOULD BE ALLOWED TO BE MODIFIED. THE LD. AR HAS RIGHTLY RELIED ON ORDER PASSED BY THE MUMBAI BENCH OF THE T RIBUNAL IN THE CASE OF M/S.A.M.TOD COMPANY INDIA PVT. LTD. V. ITO (ITA NO.492/MUM/2006). VIDE ORDER DATED 24.06.2009, THE TRIBUNAL ACCEPTED THE ASSESSEES CONTENTION FOR EXCLUSION OF CERTAIN CASES WHICH WERE WRONGLY INCLUDED IN THE TRANSFER PRICING STUDY BUT WERE ACTUALLY NOT COMPARABLE. IT IS OBSERVED THAT THE SP ECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT V. QUARK SYSTEMS (P) L TD. [(2010) 132 TTJ (CHD.) (SB) 1] ALSO ALLOWED THE ASSESSEE TO CLA IM EXCLUSION OF CERTAIN CASES FROM THE LIST OF COMPARABLES WHICH WE RE INADVERTENTLY INCLUDED BY IT IN ITS TRANSFER PRICING STUDY. IN VI EW OF THE AFORE-NOTED DISCUSSION AND THE RATIO OF THE THESE PRECEDENTS, W E DIRECT THE AO / TPO TO EXAMINE THE CORRECTNESS OF THE FIGURES PLACE D ON RECORD BY THE ASSESSEE IN SUPPORT OF ITS CONTENTION THAT THE CASE OF GOLDSTONE TELESERVICES LIMITED WAS WRONGLY INCLUDED BY IT IN THE LIST OF COMPARABLES, WHICH IS ACTUALLY NOT COMPARABLE. 3) RITES LIMITED ITA NO. 193/M/2013 8 THE TPO HAS CONSIDERED THIS COMPANY AS A COMPARABL E WHICH WAS OBJECTED BY THE ASSESSEE AS THIS COMPANY HAD DI VERSE ACTIVITY. THE TPO CHOSE TO USE THE CONSULTANCY SEGMENT ONLY AS A COMPARABLE . THE ASSESSEE OBJECTED FOR THIS ALSO CLAIMING THAT T HIS COMPANY IS PROVIDING HIGH END SERVICES. THIS CLAIM OF THE ASS ESSEE DID NOT FIND ANY FAVOUR AND THE COMPANY WAS CONSIDERED AS A COMP ARABLE. A CURSORY LOOK AT THE BUSINESS PERFORMANCE OF THE COM PANY SHOWS THAT THIS COMPANY HAS BEEN AWARDED PRESTIGIOUS ASSIGNMEN TS OF ADVISORY CONSULTANCY SERVICES FOR TAJ EXPRESSWAY FROM GREATE R NOIDA TO AGRA, GENERAL CONSULTANCY FOR BANGALORE METRO, DETAILED E NGINEERING OF MUTP PHASE-II WORK FOR MRVC, PMC FOR UPGRADATION OF RAILWAY INFRASTRUCTURE IN ROURKELA STEEL PLANT, REHABILITAT ION OF 290 BOXN WAGONS OF EAST COAST RAILWAY AND TRAINING OF 360 SU PERVISORS OF INDIAN RAILWAYS. IN THE CONSULTANCY SERVICES SEGME NT ALSO, THIS COMPANY IS ENGAGED IN PROVIDING HIGH END/ENGINEERIN G/CONSULTANCY SERVICES, MAINLY IN THE INFRASTRUCTURE SECTOR WHICH IS RAILWAYS, HIGHWAYS, AIRPORTS, PORTS, ROPEWAYS, URBAN TRANSPOR T, POWER AND BUILDING CONSTRUCTION ETC. IN ITS SEGMENT REPORTIN G, THIS COMPANY HAS IDENTIFIED THREE BUSINESS SEGMENTS AS PRIMARY SEGME NT NAMELY CONSULTANCY SERVICES, EXPORT OF ROLLING STOCK EQUI PMENT AND SPHERES AND LEASING OF RAILWAY ROLLING STOCK AND EQUIPMENT. WE ALSO FIND THAT THIS COMPANY IS A GOVT. OF INDIA UNDERTAKING PROVID ING END TO END SOLUTIONS FOR TURN-KEY PROJECT. IN THE FOLLOWING C ASES, THE TRIBUNAL HAS HELD THAT RITES LTD. IS ENGAGED IN PROVIDING EN GINEERING SERVICES AND TO END TO END SOLUTIONS AND THEREFORE NOT FUNCTIONALLY COMPARABLES WITH MARKETING SUPPORT SERVICES. A) CHEMTEX GLOBAL ENGINEERS PVT. LTD. (ITA NO. 3590/M/2010) ITA NO. 193/M/2013 9 B) MCI COM INDIA PVT. LTD. (NOW KNOWN AS VERIZON INDIA PVT. LTD) (2012 53 SOT 290 (DELHI C) YUM RESTAURANTS (INDIA) PVT. LTD. (ITA NO. 6168/DEL /2012) D) NORTEL NETWORKS INDIA PVT. LTD. (ITA NO. 4765/DEL/2 011) 10. CONSIDERING THE FACTS DISCUSSED HEREINABOVE IN THE LIGHT OF THE JUDICIAL DECISIONS MENTIONED HEREINABOVE, WE DIRECT FOR THE EXCLUSION OF THIS COMPANY FROM THE FINAL LIST OF COMPARABLES . 4. WATER & POWER CONSULTANCY SERVICES (INDIA) LTD. (SE G) THE REASON FOR THE INCLUSION OF THIS COMPANY IS SIM ILAR TO THE REASONS GIVEN FOR THE INCLUSION OF RITES LTD. A PE RUSAL OF THIS COMPANYS PROFILE SHOWS THAT IT IS A GOVERNMEN T OF INDIA UNDERTAKING. THE MAIN FIELDS OF SPECIALIZATION OF THIS COMPANY COVERED IRRIGATION OF DRAINAGE, FLOOD CONTR OL AND LAND RECLAMATION, RIVER MANAGEMENT DAMS, RESERVOIR ENGINEERING AND BARRAGES, INTEGRATED AGRICULTURE DEVELOPMENT, WATERSHED MANAGEMENT, HYDROPOWER AND THERMAL POWER GENERATION, POWER TRANSMISSION AND DISTRIBUTION , RURAL ELECTRIFICATION, GROUND WATER EXPLORATION, MINOR IRRIGATION ETC. THE CONSULTANCY SERVICES ARE CARRIED OUT IN THREE MAIN CENTRES I.E. WATER RESOURCES, POWER AND INFRASTRUCTURE. SEGMENT REVENUE IS FROM CONSULTANC Y AND ENGINEERING PROJECTS AND LUMSUM TURN-KEY PROJECTS. IN THE CASE OF ACTIS ADVISERS PVT. LTD. 146 ITD 314 WHEREIN THE ASSESSEE WAS ENGAGED IN PROVIDING FINANCIAL ADVISORY SUPPORT SERVICES TO ITS AES AKIN TO THAT OF THE ASSESSEE. THE TRIBU NAL HAS HELD AS UNDER: ITA NO. 193/M/2013 10 COMING BACK TO THE ISSUE OF COMPARABILITY THE INCLUSION/EXCLUSION OF VAPI AND WAPCOS, THE ITAT IN THE CASES OF MCI COM INDIA (P.) LTD. AND VERIZON INDIA (P.) LTD. (SUPRA) HAS HELD THAT COMPANIES LIKE EIL, RITES, WA PSOS AND TCE ARE ENGINEERING COMPANIES AND PROVIDE END TO EN D SOLUTIONS AND THEREFORE THEY CANNOT BE COMPARED WIT H THOSE ASSESSEE WHO WERE INTO PROVIDING MARKETING SUPPORT SERVICES TO THE PARENT COMPANY. THEY WERE HELD TO BE FUNCTIO NALLY NOT COMPARABLE WITH THE ENGINEERING COMPANIES. THE CASE OF VAPI ALSO FALLS ON THE SAME FOOTING. THEREFORE, RESPECTF ULLY FOLLOWING THE ORDER OF THE ITAT IN THE CASES OF MCI COM INDIA (P.) LTD. AND VERIZON INDIA (P.) LTD. (SUPRA) AND ESTEL IN IT A NO. 584/BANGLORE/06 WE ARE OF THE VIEW THAT VAPI AND WA PCOS ARE FUNCTIONALLY NOT COMPARABLE TO THE ASSESSEE. TH EREFORE, THEY ARE TO BE EXCLUDED. 11. CONSIDERING THE FUNCTIONAL ANALYSIS OF THIS COM PANY DISCUSSED HEREINABOVE, IN THE LIGHT OF THE DECISION OF THE TR IBUNAL (SUPRA), WE DIRECT FOR THE EXCLUSION OF THIS COMPANY FROM THE F INAL LIST OF COMPARABLES. 12. TO COMPLETE THE ADJUDICATION, 9 COMPANIES WERE SELECTED IN THE FINAL LIST OF COMPARABLES OUT OF WHICH WE HAVE EXCLUDED 4 COMPANIES FROM THE FINAL LIST OF COMPARABLES. THE REMAINING 5 COMPANIES ARE AS UNDER: SR. NO. COMPARABLE OP/TC WITHOUT WC ADJ. (%) 1. EDUCATIONAL CONSULTANTS INDIA LTD. 1.87 2. ICRA MANAGEMENT CONSULTING SERVICES 4.18 3. UDC (INDIA) LTD. 15.48 ITA NO. 193/M/2013 11 4. INDUS TECHNICAL & FINANCIAL CONSULTANTS LTD. 14.56 5. TECHNICOM-CHEMIE (INDIA) LTD. 7.33 AVERAGE 8.68 13. THE AVERAGE MARGIN OF THESE COMPARABLES COMES T O 8.68%. IN OUR CONSIDERED VIEW, THE INTERNATIONAL TRANSACTIONS ENTERED BY THE ASSESSEE ARE AT ARMS LENGTH. WE, THEREFORE DIRECT THE AO TO DELETE THE TRANSFER PRICING ADJUSTMENTS. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE ALONGWITH ADDITIONAL GROUND IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH DECEMBER, 2014 SD/- SD/- (VIJAY PAL RAO ) (N.K. BILLAIYA) /JUDICIAL MEMBER $ / ACCOUNTANT MEMBER MUMBAI; 3 DATED : 10 TH DECEMBER, 2014 . . ./ RJ , SR. PS ITA NO. 193/M/2013 12 2 2 2 2 - -- - *. *. *. *. 4&. 4&. 4&. 4&. / COPY OF THE ORDER FORWARDED TO : 1. ') / THE APPELLANT 2. *+') / THE RESPONDENT. 3. 5 ( ) / THE CIT(A)- 4. 5 / CIT 5. 67 *. , , / DR, ITAT, MUMBAI 6. 78 9 / GUARD FILE. 2 2 2 2 / BY ORDER, +. *. //TRUE COPY// : :: : / ; ; ; ; (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI