DCIT 1(3)(2), MUMBAI V. VFS GLOBAL SERVICES P.LTD, MUMBAI

ITA 2109/MUM/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7404 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 24-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: NEERAJ SETH
• Keywords: Transfer pricing; International transaction; Revised return; Capital expenditure; Set aside
• Section: 143(3); 115JB

Judgement Text

P A G E | 1 ITA NO.2109/MUM/2017 A.Y. 2011 - 12 DCIT - 1(3)(2) VS. M/S VFS GLOBAL SERVICES PVT. LTD. IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.2109/MUM/2017 (ASSESSMENT YEAR: 2011 - 12) DEPUTY COMMISSIONER OF INCOME TAX - 1(3)(2), ROOM NO.540, 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020 VS. M/S VFS GLOBAL SERVICES PVT. LTD. 9 TH FLOOR, TOWER - A, URMI ESTATE, 95, GANPATRAO KADAM MARG, LOWER PAREL (WEST), MUMBAI 400013 PAN AACCC7513P (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI UODAL RAJ SINGH, D.R RESPONDENT BY: SHRI NEERAJ SETH, A .R DATE OF HEARING: 03.10 .2019 DATE OF PRONOUNCEMENT: 1 6 .10 .2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 55, MUMBAI, DATED 30.11.2016, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 143(3) R.W.S. 144C(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT) , DATED 13.04.201 5 . THE REVENUE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUNDS OF APPEAL BEFORE US: (1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE L D. CIT(A) WAS CORRECT IN DELETING TRANSFER PRICING ADJUSTMENT OF RS. 6,21,96,7541 - MADE ON ACCOUNT OF PROVISION OF U.K. VISA PROCESSING SERVICES?'. (2) WHETHER O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT(A) ERRED IN REJECTING THE PROFIT SPLI T METHOD ADOPTED AS THE MOST APPROPRIATE METHOD ADOPTED BY THE TPO AND THE ASSESSING OFFICER AS AGAINST CUP METH OD ADOPTED BY THE ASSESSEE FOR DETERMINATION OF ARMS LENGT H PRICE OF PR O V ISION OF U.K. VISA PROCESSING SERVICES'. P A G E | 2 ITA NO.2109/MUM/2017 A.Y. 2011 - 12 DCIT - 1(3)(2) VS. M/S VFS GLOBAL SERVICES PVT. LTD. (3) WHET HE R ON TH E FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE L D. CIT'A) ERRED IN ACCEPTING THE INTERNAL CUP METHOD PROPOSED BY THE ASSESSEE IGNORING THE FAR DIFFERENCES BETWEEN THE CONTROLLED AND UNCONTROLLED TRANSACTIONS . (4) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN STATING THAT HE RELIED UPON ORDER OF THE ITAT FOR A. Y . 2009 - 10 IN THE CASE OF THE ASSESSEE, WHEN IN THE SAID ORDER OF THE ITAT THERE IS NO FINDING AS TO WHETHER COMPARABLES PROPOSED BY THE ASSESSEE WERE VALID AND THE SAID MATTER HAS ONLY BEEN REMITTED BACK TO THE FILE OF AO/ TPO FOR FRESH ADJUDICATION. THE APPELLANT CRAVES LEAVE TO ADD TO, AMEND OR WITHDRAW THE AFORESAID GROUND OF APPEAL. 2. BRIEFLY STATED, THE ASSESSEE COMPANY WHICH IS ENGAGED IN THE BUSINESS OF PROVIDING VISA FACILITATION SERVICES TO C ONSULATE S AND HIGH COMMISSION S HAD E - FILED ITS RETURN OF INCOME FOR A.Y . 2011 - 12 ON 30.11.2011, DECLARING ITS TOTAL INCOME AT RS.40,22,96,006/ - . SUBS E QUENTLY, THE ASSESSEE FILED A REVISED RETURN OF INCOME ON 30.03.2013, DECLARING ITS TOTAL INCOME AT RS.40,20,55,010/ - . THE CASE OF THE ASSESSEE WAS THEREAFTER SELECTED FOR SCRUTINY ASSESSMENT UNDER SEC.143(2) OF THE ACT. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE COMPANY HAD ENTERED INTO INTER NATIONAL TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISE (FOR SHORT AE). ACCORDINGLY, IN ORDER TO VERIFY THE CORRECTNESS OF THE CLAIM OF THE ASSESSEE THAT THE SAID AFORESAID TRANSACTIONS WHICH WERE SHOWN TO BE AT ARMS LENGTH PRICE (FOR SHORT ALP ) IN THE TP STUDY REPORT, THE A.O MADE A REFERENCE TO THE ADDITIONAL CIT(TP) - 1(6), MUMBAI (FOR SHORT TPO) ON 30.10.2013 UNDER SEC.92CA(1) OF THE ACT. 4. IN THE COURS E OF THE PROCEEDINGS, IT WAS OBSERVED BY THE TPO THAT THE ASSESSEE HAD ENTERED INTO THE FOLLOWING INTERNATIONAL TRANSACTIONS WITH ITS AE S, DURING THE YEAR UNDER CONSIDERATION: SR. NO. NATURE OF TRANSACTIONS DETAILS OF AE AMOUNT (RS.) METHOD ADOPTED BY ASS ESSEE 1. PROVISION OF BUSINESS SUPPORT SERVICES VFS MAURITIUS 23,40,63,874 TNMM 2. PROVISION OF PROCUREMENT SUPPORT SERVICES VFS MAURITIUS 2,58,37,097 TNMM 3. PROVISION OF SERVICES FOR VISA PROCESSING (FOR UK VISA) VFS MAURITIUS 21,67,75,942 CUP 4. TRANSITION INCOME VFS MAURITIUS 4,87,50,046 CUP 5. SERVICES HUB & SPOKE (LOGISTIC SUPPORT SERVICES) VFS, NEPAL 35,24,177 TNMM 6. SERVICES HUB & SPOKE VFS MAURITIUS 1,01,58,028 TNMM P A G E | 3 ITA NO.2109/MUM/2017 A.Y. 2011 - 12 DCIT - 1(3)(2) VS. M/S VFS GLOBAL SERVICES PVT. LTD. (LOGISTIC SUPPORT SERVICES) 7. RECOVERY OF INSURANCE EXPENSES VFS MAURITIUS 38,00,000 NO METHOD (*) 8. RECOVERY OF OTHER EXPENSES VFS MAURITIUS 15,30,000 9. REIMBURSEMENT OF EMPLOYEE STOCK COMPENSATION EXPENSES KUONI ZURICH 51,19,255 CUP IT WAS OBSERVED BY THE TPO THAT THE ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH ITS AE VIZ. VF S MAURITIUS FOR PROCESSING OF VISA APPLICATION S FOR U.K. AS PER THE AGREEMENT , THE ASSESSEE COMPANY WAS TO BE PAID AN AMOUNT OF RS.500 / - PER APPLICANT BY ITS AE. IT WAS OBSERVED BY THE TPO , THAT THE ASSESSEE HAD USED CUP METHOD TO BENCH MARK THE AFORESAID TRANSACTION S AND HAD USED THE FEES RECEIVED FROM US CONSULATE OF RS. 350 / - PER APPLICANT AS A THIRD PARTY COMPARABLE. ON THE BASIS OF THE AFORESAID COMPARISON, THE AFORESAID TRANSACTION S WITH ITS AE WERE CLAIMED BY THE ASSESSEE TO BE AT A RMS LENGTH. ON A FURTHER PERUSAL OF THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH ITS AE, IT WAS OBSERVED BY THE TPO , THAT THE ASSESSEE HAD PROVIDED THE FOLLOWING SERVICES: A) APPLICATION PROCESSING OF UK VISAS 1) INFORMATION SERVICES 2) APPLICATION STREAMING SERVICES 3) APPLICATION RECEIPT AND VALIDATION SERVICES 4) FEE HANDLING SERVICES 5) BIOMETRICS RECORDING SERVICES 6) DATA ENTRY SERVICES 7) APPLIC A TION DELIVERY SERVICES 8) STATUS TRACKING SERVICES 9) INTERVIEW BOOKING SERVICES 10) RETURN OF DOCUMENTS SERVICES B) BUIL D AND OPERATED VISA APPLICATION CENTRES IN INDIA.. ON THE OTHER HAND, IT WAS OBSERVED BY THE TPO THAT AS PER THE AGREEMENT ENTERED INTO BY T HE ASSESSEE COMPANY WITH U.S MISSION, THE ASSESSEE WAS REQUIRED TO PROVIDE THE FOLLOWING SERVICES: PROVISION OF PROCEDURAL VISA APPLICATION INFORMATION, SCHEDULING APPOINTMENTS AND REMOTE DATA SERVICES PARA 4.1 OF THE AGREEMENT. DELIVERY OF US PASSPORTS TO US CITIZENS WHO WISH TO USE SUCH FACILITY - PARA 4.2 OF THE AGREEMENT. P A G E | 4 ITA NO.2109/MUM/2017 A.Y. 2011 - 12 DCIT - 1(3)(2) VS. M/S VFS GLOBAL SERVICES PVT. LTD. ON THE BASIS OF HIS AFOR ESAID COMPARATIVE ANALYSIS , THE TPO WAS OF THE VIEW THAT THE NATURE OF SERVICES PROVIDED BY THE ASSESSEE FOR VISA PROCESSING OF U.K. & U.S. WERE ENTIRELY DIFFERENT. THE TPO TO FORTIFY HIS AFORESAID CONVICTION, OBSERVED , THAT WHILE FOR THE ASSESSEE HAD UNDE RTAKEN B IOMETRIC RECORDING, DATA VERIFICATION AND ENTR Y, VALIDATION OF ENTRIES ETC ., FOR U.K VISA APPLICATIONS, WHEREAS NO SUCH SERVICES WERE UNDERTAKEN WHILE PROCESSING THE U.S VISA APPLICATIONS . ACCORDINGLY, IN THE BACKDROP OF HIS AFORESAID OBSERVATIONS , THE TPO WAS OF THE VIEW THAT THE CUP METHOD USED BY THE ASSESSEE COMPANY WAS NOT PROPER, FOR THE REASON , THAT THE SERVICES BEING PROVIDED TO THE AE FOR PROCESSING OF U.K VISA AND THOSE RENDERED TO THE U.S CONSULATE WERE NOT FOUND TO BE COMPARABLE. AS SUCH , THE TPO REJECTED THE CUP METHOD USED BY THE ASSESSEE , AND APPLIED THE PROFIT SPLIT METHOD (FOR SHORT PSM) AS THE MOST APPROPRIATE METHOD (FOR SHORT MAM) FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE. ON THE BASIS OF HIS FURTHER DELIBERATIONS AS ARE DISCERNIBLE FROM HIS ORDER PASSED UNDER SEC.92CA(3), DATED 30.01.2015, THE TPO CONCLUDED THAT AS THE AE VIZ. VF S MAURITIUS WAS MERELY A COORDINATING AND LIAISI NG ENTITY THAT WAS PROVIDING MARKET SUPPORT TO THE ASSESSEE, THEREFORE , IN THE BACKDROP OF SUCH LIMITED ACTIVITIES UNDERTAKEN BY IT AND ALSO FOR ITS GOODWILL 15% OF THE REVENUES WERE TO BE ATTRIBUTED TO IT, WHILE FOR THE BALANCE 85% OF THE REVENUES OUGHT T O HAVE BEEN RETAINED BY THE ASSESSEE. ON THE BASIS OF HIS AFORESAID OBSERVATIONS, THE TPO PROCEEDED TO SPLIT THE REVENUES BETWEEN THE ASSESSEE AND THE AE IN THE RATIO OF 85:15 (ASSESSEE: AE), AS UNDER : PARTICULARS VISA PROCESSING FEES (AS PER ASSESSEE) ON APPLICATION OF PSM AS DISCUSSED IN DETAILS ABOVE. PERCENTAGE REVENUE RECEIVED BY VF MAURITIUS FROM UKBA 32,82,03,172 32,82,03,172 100% LESS: AMOUNT RECEIVED BY ASSESSEE FROM VFS MAURITIUS 21,67,75,942 27,89,72,696 85% ATTRIBUTABLE TO INDIA AMOUNT RETAINED BY VFS MAURITIUS 11,14,27,230 4,92,30,476 15% ATTRIBUTABLE TO MAURITIUS P A G E | 5 ITA NO.2109/MUM/2017 A.Y. 2011 - 12 DCIT - 1(3)(2) VS. M/S VFS GLOBAL SERVICES PVT. LTD. ACCORDINGLY, THE TPO WAS OF THE VIEW THAT THE ASSESSEE SHOULD HAVE RETAINED AN AMOUNT OF RS.27,89,72,696/ - INSTEAD OF RS.21,67,75,942/ - OUT OF THE TOTAL REVENUE . HENCE, AN ADJUSTMENT OF RS.6,21,96,754/ - WAS PROPOSED BY HIM WITH REGARD TO THE AFORE SAID TRANSACTION. 5. THE A.O AFTER RECEIVING THE ORDER PASSED BY THE TPO UNDER SEC.92CA(3) , DATED 30.01.2015, THEREIN PASSED A DRAFT ASSESSMENT ORDER, WHEREIN IT WAS INTER ALIA PROP OSED TO MAKE AN UPWARD T.P ADJUST MENT OF RS.6,21,96,754/ - . AS THE ASSESSEE, VIDE ITS LETTER DATED 01.04.2015 STATED THAT IT INTENDED TO EXERCISE THE OPTION OF FILING AN APPEAL BEFORE THE CIT(A), THEREFORE, THE A.O PROCEEDED WITH TO FRAME THE FINAL ASSESSME NT ORDER. ACCORDINGLY, THE A.O VIDE HIS ASSESSMENT ORDER PASSED UNDER SEC.143(3) R.W.S. 144C(3), DATED 13.04.2015 AFTER INTER ALIA MAKING AN UPWARD T.P ADJUSTMENT OF RS.6,21,96,754/ - IN RESPECT OF THE VISA PROCESSING SERVICES RENDERED BY THE ASSESSEE TO IT S AE, THEREIN WORKED OUT ITS INCOME UNDER THE NORMAL PROVISIONS AT RS.48,23,50,660/ - AND THE BOOK PROFIT UNDER SEC. 115JB AT RS.44,24,12,056/ - . 6. AGGRIEVED, THE ASSESSEE ASSAILED THE ASSESSMENT ORDER BEFORE THE CIT( A). ON THE BASIS OF NECESSARY DELIBERATIONS, IT WAS OBSERVED BY THE CIT(A), THAT BY AND LARGE THERE WAS NOT MUCH OF DIFFERENCE IN THE NATURE OF SERVICES WHICH WERE RENDERED BY THE ASSESSEE TO ITS AE FOR PROCESSING OF VISA APPLICATIONS OF U. K , AS AGAINST TH OSE WHICH WERE PROVIDED TO THE US CONSULATE FOR PROCESSING OF U.S VISA APPLICATIONS. IT WAS NOTICED BY THE CIT(A), THAT THE ASSESSEE WAS RENDERING ALL THE SERVICES LIKE INFORMATION, APPLICATION RECEIPT AND VALIDATION, DATA ENTRY, STATUS TRACKING, INTERVIEW BOOKING, RETURN DOCUMENT, APPLICATION STREAMING AND APPLICATION DELIVERY SERVICES TO BOTH US CONSULATE , AS WELL AS TO ITS AE FOR PROCESSING OF U . K VISA APPLICATIONS. AT THE SAME TIME, IT WAS NOTICED BY THE CIT(A), THAT THE ASSES S EE IN ADDITION TO THE AFOR ESAID COMMON SERVICES, WAS ALSO RENDERING ADDITIONAL FEE HAND L ING SERVICES AND BIOMETRIC SERVICES TO ITS AE FOR PROCESSING THE U.K VISA APPLICATIONS, WHICH HOWEVER WERE NOT BEING PROVIDED BY IT TO THE US CONSULATE. IT WAS FURTHER OBSERVED BY HIM, THAT THE ASSESSE E WAS PROVIDED THE BIOMETRIC HARDWARE AND SOFTWARE FOR EXCLUSIVE USE FROM ITS AE (WHICH IN TURN HAD P A G E | 6 ITA NO.2109/MUM/2017 A.Y. 2011 - 12 DCIT - 1(3)(2) VS. M/S VFS GLOBAL SERVICES PVT. LTD. RECEIVED THE SAME FROM UKBA MISSION). IT WAS OBSERVED BY THE CIT(A), THAT THE ASSESSEE WAS RECEIVING A SUM OF RS. 350/ - PER APPLICATION FROM TH E THIRD PARTY I.E U.S CONSULATE, WHEREAS IT HAD RECEIVED RS. 5 00/ - PER APPLICATION FOR PROCESSING OF THE U.K VISA APPLICATIONS FROM ITS AE. ACCORDINGLY, I T WAS OBSERVED BY THE CIT(A), THAT THE ASSESSEE FOR PROVIDING THE AFORESAID ADDITIONAL SERVICES TO ITS AE FOR PROCESSING OF U.K VISAS, AS IN COMPARISON TO THE SERVICES RENDERED TO THE US CONSULATE FOR PROCESSING OF U.S VISA APPLICATIONS, WAS ADDITIONALLY REMUNERATED BY ITS AE. IN THE BACKDROP OF THE AFORESAID FACTS, THE CIT(A) WAS OF THE VIEW THAT THE QUAN TUM OF DIFFERENCE OF RS. 150/ - THAT WAS CHARGED BY THE ASSESSEE FROM ITS AE VIZ. VFS MAURITIUS FOR RENDERING ADDITIONAL SERVICES CALLED FEE HANDLING SERVICES AND BIOMETRIC RECORDING SERVICES APPEARED TO BE FAIR AND REASONABLE IN LIGHT OF THE FACT THAT AS THE BRITISH HIGH COMMISSION, NEW DELHI HAD PROVIDED THE ASSESSEE IN INDIA WITH THE INFRASTRUCTURE FACILITIES LIKE BIOMETRIC EQUIPMENTS FOR EXCLUSIVE USE FOR PROCESSING THE U.K VISA APPLICATIONS , THEREFORE, THE ASSESSEE WAS NOT REQUIRED TO INCUR ANY CAPI TAL EXPENDITURE FOR RENDERING THE BIOMETRIC RECORDING SERVICES. IT WAS OBSERVED BY THE CIT(A), THAT THE TPO INSTEAD OF COMPARING THE SIMILARITIES AND DIFFERENCES BETWEEN THE SERVICES RENDERED BY THE ASSESSEE FOR PROCESSING THE U.K VISA APPLICATIONS AND U .S VISA APPLICATIONS UNDER THE CUP METHOD, EVEN THOUGH INTERNAL ONE, HAD HOWEVER COMPARED THE QUANTUM OF REVENUES CHARGED AND RETAINED BY EACH ONE WITHOUT EXAMINING THE ENTIRE GAMUT OF SERVICES RENDERED BY THE ASSESSEE AND ITS AE . ALSO, THE CIT(A) WAS OF T HE VIEW, THAT THE TPO HAD UNDER THE PSM METHOD ARBITRARILY USED THE RATIO OF RETENTION OF REVENUE OF 85:15 BETWEEN THE ASSESSEE AND ITS AE VIZ. VFS MAURITIUS. ACCORDINGLY, THE CIT(A) AFTER CONSIDERING THE ORDER PASSED BY THE ITAT, MUMBAI, IN THE ASSESSES OWN CASE FOR A.Y 2009 - 10, I.E ITA NO. 1847/MUM/2014, DATED 27/04/2016, CONCLUDED THAT THE TPO WAS NOT JUSTIFIED IN REJECTING THE INTERNAL CUP OF US CONSULATE VISA FEES CHARGED BY THE ASSESSEE , AND HAD ERRED IN CARRYING OUT AN ADHOC ALLOCATION OF THE REVENUES IN THE RATIO OF 85:15 BETWEEN THE ASSESSEE AND ITS AE ON THE BASIS OF PSM THAT WAS ADOPTED BY HIM. ACCORDINGLY, THE CIT(A) WAS OF THE VIEW, THAT THE RATE OF RS. 500/ - CHARGED BY THE ASSESSEE FROM ITS AE VIZ. VFS MAURITIUS P ER APPLICATION WAS FAIR AND REASONABLE IN VIEW OF THE FACTS OF THE P A G E | 7 ITA NO.2109/MUM/2017 A.Y. 2011 - 12 DCIT - 1(3)(2) VS. M/S VFS GLOBAL SERVICES PVT. LTD. CASE AND THE JUDICIAL PRONOUNCEMENTS ON THE SUBJECT. RESULTANTLY, THE APPEAL OF THE ASSESSEE ON THE ISSUE UNDER CONSIDERATION WAS ALLOWED. 7. THE REVENUE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORISED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE, AT THE VERY OUTSET OF THE HEARING OF THE APPEAL TOOK US THROUGH THE FACTS OF THE CASE. IT WAS SUBMITTED BY THE LD. A.R , THAT THE IS SUE INVOLVED IN THE PRESENT APPEAL WAS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN THE ASSESSES OWN CASE FOR A.Y 2009 - 10 I.E VFS GLOBAL SERVICES PVT. LTD. VS. DY. CIT (ITA NO. 1847/MUM/2014, DATED 27.04.2016) (COPY PLACED ON RECORD). IT WAS SUBMITTE D BY THE LD. A.R, THAT THE TRIBUNAL WHILE RESTORING THE MATTER TO THE FILE OF THE A.O/TPO, HAD OBSERVED, THAT THE SERVICES WHICH WERE RENDERED BY THE ASSESSEE TO ITS AE VIZ. VFS MAURITIUS WERE MORE OR LESS SIMILAR TO THE SERVICES RENDERED TO THE U.S.A VISA AUTHORITIES, EXCEPT FOR THE BIOMETRIC SERVICES WHICH WERE BEING RENDERED TO THE AE WHILE PROCESSING THE U.K VISA APPLICATIONS. ACCORDINGLY, THE TRIBUNAL WHILE RESTORING THE MATTER TO THE FILE OF THE A.O/TPO , HAD DIRECTED THEM TO CONSIDER AS TO WHETHER ANY ADJUSTMENT AT ALL WAS REQUIRED TO BE MADE TO THE PRICE ON ACCOUNT OF BIOMETRIC RECORDING SERVICES AND IF SO, WHAT WOULD BE THE QUANTUM OF ADJUSTMENT ATTRIBUTABLE TO THE SAME. IT WAS SUBMITTED BY THE LD. A.R, THAT THE TPO IN THE COURSE OF THE SET ASIDE P ROCEEDINGS HAD VIDE HIS ORDER PASSED U/S 92CA(3), DATED 12.10.2018 (COPY PLACED ON RECORD), HAD HELD, THAT THE VALUE OF THE INTERNATIONAL TRANSACTIONS REPORTED BY THE ASSESSEE WITH ITS AE WERE FOUND TO BE AT ARMS LENGTH. ALSO, SUPPORT WAS DRAWN BY THE LD. A.R FROM THE ORDER OF THE TPO PASSED U/S 92CA(3) R.W.S 254, DATED 22.07.2016, GIVING EFFECT TO THE ORDER OF THE TRIBUNAL FOR A.Y 2010 - 11, WHEREIN THE MATTER WAS RESTORED TO THE FILE OF THE TPO/A.O TO DECIDE THE SAME AFRESH IN LINE OF THE DIRECTIONS WHICH WERE EARLIER GIVEN WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE FOR A.Y 2008 - 09. IT WAS SUBMITTED BY THE LD. A.R, THAT THE TPO VIDE HIS ORDER PASSED U/S 92CA(3) R.W.S 254, DATED 22.07.2016, FOR A.Y 2010 - 11, HAD CONCLUDED , THAT THE CUP USED BY THE ASSESSE E WAS APPROPRIATE, AS THE SERVICES WHICH WERE DIRECTLY RENDERED BY IT TO U.K AND U.S.A CONSULATES WERE COMPARABLE. IN THE BACKDROP OF THE AFORESAID FA C TS, P A G E | 8 ITA NO.2109/MUM/2017 A.Y. 2011 - 12 DCIT - 1(3)(2) VS. M/S VFS GLOBAL SERVICES PVT. LTD. IT WAS AVERRED BY THE LD. A.R, THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL FOR A.Y 2011 - 12, PURSUAN T TO THE AFORESAID SET ASIDE ORDERS PASSED BY THE TPO WAS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. AS SUCH, IT WAS THE CLAIM OF THE LD. A.R, THAT AS NO INFIRMITY DID EMERGE FROM THE ORDER OF THE CIT(A) FOR THE YEAR UNDER CONSIDERATION, THEREFORE, THE APPEAL FILED BY THE REVENUE DID NOT MERIT ACCEPTANCE AND WAS LIABLE TO BE DISMISSED. 8. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) RELIED ON THE ORDER OF THE A.O. ALTHOUGH, THE LD. D.R COULD NOT CONTROVERT THE FACT THAT THE ISSUE IN VOLVED IN THE PRESENT APPEAL WAS COVERED BY THE ORDERS PASSED BY THE A.O/TPO PURSUANT TO THE DIRECTIONS OF THE TRIBUNAL IN THE ASSES S ES OWN CASE FOR A.Y 2009 - 10 AND A.Y 2010 - 11, HOWEVER, IT WAS AVERRED BY HIM THAT THE MATTER IN THE SAME TERMS MAY BE RESTOR ED TO THE FILE OF THE A.O/TPO. ON THE CONTRARY, IT WAS SUBMITTED BY THE LD. A.R, THAT AS THE ISSUES INVOLVING IDENTICAL FACTS HAD BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE A.O/TPO IN THE COURSE OF THE SET ASIDE PROCEEDINGS IN A.Y 2009 - 10 AND A.Y 2010 - 11, THEREFORE, NO USEFUL PURPOSE WOULD BE SERVED BY RESTORING THE CASE TO THE FILE OF THE LOWER AUTHORITIES. 9. WE HAVE HEARD THE AUTHORISED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RE CORD, AND ALSO THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THEM. AS OBSERVED BY US HEREINABOVE, THERE IS NOT MUCH OF DIFFERENCE IN THE NATURE OF SERVICES WHICH WERE RENDERED BY THE ASSESSEE TO ITS AE VIZ. VFS MAURITIUS FOR PROCESSING OF VISA APPLICATIONS OF U.K, AS IN COMPARISON TO THE SERVICES WHICH WERE PROVIDED TO THE US CONSULATE FOR PROCESSING OF U.S VISA APPLICATIONS. ON A PERUSAL OF THE ORDERS OF THE LOWER AUTHORITIES, WE FIND, THAT THE ASSESSEE WAS RENDERING ALL THE SERVICES LIKE INFORMATION, APPLICATION RECEIPT AND VALIDATION, DATA ENTRY, STATUS TRACKING, INTERVIEW BOOKING, RETURN DOCUMENT, APPLICATION STREAMING AND APPLICATION DELIVERY SERVICES TO BOTH US CONSULATE AS WELL AS TO IT S AE VIZ. VFS MAURITIUS FOR PROCESSING OF THEIR RESPECTIVE VISA APPLICATIONS. ADMITTEDLY, THE ASSESSEE IN ADDITION TO THE AFORESAID COMMON SERVICES WAS ALSO RENDERING ADDITIONAL P A G E | 9 ITA NO.2109/MUM/2017 A.Y. 2011 - 12 DCIT - 1(3)(2) VS. M/S VFS GLOBAL SERVICES PVT. LTD. FEE HANDLING SERVICES AND BIOMETRIC SERVICES TO ITS AE FOR PROCESSING THE U.K VISA APPLICATIONS, WHICH HOWEVER WERE NOT BEING PROVIDED BY IT TO THE US CONSULATE. BUT THEN, THE ADDITIONAL SERVICES RENDERED BY THE ASSESSEE TO ITS AE FOR PROCESSING THE U.K VISAS, HAD TO BE CONSIDERED IN THE LIGHT OF THE FACT THAT THE ASSESS E E WAS P ROVIDED THE BIOMETRIC HARDWARE AND SOFTWARE FOR EXCLUSIVE USE BY ITS AE (WHICH IN TURN HAD RECEIVED THE SAME FROM UKBA MISSION). WE ARE OF THE CONSIDERED VIEW, THAT AS THE ASSESSEE WAS RECEIVING AN AMOUNT OF RS. 500/ - PER APPLICATION FOR PROCESSING OF TH E U.K VISA APPLICATIONS FROM ITS AE, AS IN COMPARISON TO THE SUM OF RS. 350/ - PER APPLICATION WHICH IT WAS RECEIVING FROM A THIRD PARTY I.E U.S CONSULATE, THEREFORE, IT CAN SAFELY BE CONCLUDED THAT IT WAS SUFFICIENTLY BEING COMPENSATED FOR THE ADDITIONAL S ERVICES WHICH WERE BEING RENDERED BY IT TO ITS AE. IN FACT, WE ARE PERSUADED TO SUBSCRIBE TO THE VIEW TAKEN BY THE CIT(A) , THAT THE QUANTUM OF DIFFERENCE OF RS. 150/ - THAT WAS BEING CHARGED BY THE ASSESSEE FROM ITS AE VIZ. VFS MAURITIUS FOR RENDERING ADDIT IONAL SERVICES I.E FEE HANDLING SERVICES AND BIOMETRIC RECORDING SERVICES , COULD SAFELY BE HELD TO BE FAIR AND REASONABLE IN LIGHT OF THE FACT THAT AS THE BRITISH HIGH COMMISSION, NEW D ELHI HAD PROVIDED THE ASSESSEE WITH THE INFRASTRUCTURE FACILITIES L IKE BIOMETRIC EQUIPMENTS FOR EXCLUSIVE PROCESSING OF U.K VISA APPLICATIONS , THEREFORE, THE ASSESSEE WAS NOT REQUIRED TO INCUR ANY CAPITAL EXPENDITURE FOR RENDERING THE BIOMETRIC RECORDING SERVICES. APART THERE FROM, WE FIND THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDER PASSED BY THE TRIBUNAL IN THE ASSESSES OWN CASE FOR A.Y 2009 - 10 IN VFS GLOBAL SERVICES PVT. LTD. VS. DY. CIT (ITA NO. 1847/MUM/2014, DATED 27.04.2016). IN THE CASE OF THE ASSESSEE FOR A.Y 2009 - 10, THE TPO WHILE REJECTING THE TRANSFER PRICING ANALYSIS OF THE ASSESSEE RELATING TO VISA PROCESSING SERVICES , HAD TAKEN THE VISA APPLICATION SERVICES PROVIDED BY THE ASSESSEE TO ITS AE AT NEPAL AS THE INTERNAL CUP . ON APPEAL, IT WAS OBSERVED BY THE TRIBUNAL, THAT A SIMILAR APPROACH ADOPTED BY THE A.O WAS NOT ACCEPTED BY IT IN A.Y 2008 - 09, FOR THE REASON, THAT A PRICE CHARGED TO A RELATED PARTY COULD NOT CONSIDERED FOR DETERMIN IN G THE ALP OF AN INTERNATIONAL TRANSACTION . ACCORDINGLY, THE PRICE CHARGED BY THE ASSESSEE FROM ITS AE AT NEPAL WAS REJECTED AS A COMPARABLE IN RESPECT OF THE INTERNATIONAL TRANSACTION OF THE ASSESSEE WITH ITS AE AT P A G E | 10 ITA NO.2109/MUM/2017 A.Y. 2011 - 12 DCIT - 1(3)(2) VS. M/S VFS GLOBAL SERVICES PVT. LTD. MAURITIUS. IN THE BACKDROP OF THE AFORESAID FACTS, THE MATTER WAS RESTORED BY THE TRIBUNAL TO THE FILE OF THE A.O/TPO, FOR AFRESH ADJUDICATION. AT THE TIME OF SETTING ASIDE THE MATTER TO THE FILE OF THE A.O/TPO, THE TRIBUNAL TAKING COGNIZANCE OF TWO INTERNAL CUP BY WAY OF PROVISION OF SERVICES BY THE ASSESSEE DIRECTLY TO THE U.K AND U.S.A VISA AUTHORITIES AT RS. 400/ - AND RS. 350/ - P ER APPLICATION, HAD THUS DIRECTED THE A.O/TPO TO CONSIDER THE SAME IN THE COURSE OF RE - ADJUDICAT ING THE ISSUE. AS OBSERVED BY US HEREINABOVE, THE TPO IN THE COURSE OF THE SET ASIDE PROCEEDINGS , VIDE HIS ORDER PASSED U/S 92CA(3), DATED 12.10.2018 , HAD OBS ERVED , THAT THE INTERNATIONAL TRANSACTIONS OF THE ASSESSEE WITH ITS AE WERE FOUND TO BE AT ARMS LENGTH. IN THE BACKDROP OF THE AFORESAID FACTS, WE ARE OF THE CONSIDERED VIEW, THAT THE REVENUE HAD ACCEPTED PROVISION OF VISA SERVICES BY THE ASSES S EE DIRECTLY TO THE U.S.A VISA AUTHORITIES AT THE RATE OF RS. 350/ - PER APPLICATION, IN A.Y 2009 - 10 AS A VALID CUP, AND HAD CONCLUDED THAT THE SERVICES RENDERED BY THE ASSESSEE TO ITS AE VIZ. VFS MAURITIUS FOR PROCESSING OF U.K VISAS AT A CHARGE OF RS. 500/ - PER VISA APPLICATION TO BE AT ARMS LENGTH. ALSO, IN THE COURSE OF THE SET ASIDE PROCEEDINGS FOR A.Y 2010 - 11, THE TPO VIDE HIS ORDER PASSED U/S 92CA(3) R.W.S 254, DATED 22.07.2016, WHILE GIVING EFFECT TO THE ORDER OF THE TRIBUNAL, HAD ACCEPTED THE CUP METHOD, FOR THE REASON, THAT THE SERVICES BEING PROVIDED BY THE ASSESSEE TO ITS AE VIZ. VFS, MAURITIUS, WERE COMPARABLE TO THOSE WHICH WERE DIRECTLY PROVIDED TO U.K AND U.S CONSULATES. AT THIS STAGE, WE MAY HEREIN OBSERVE, THAT IN A.Y 2010 - 11 ALSO THE ASSE SSEE WAS CHARGING ITS AE VIZ. VFS MAURITIUS AN AMOUNT OF RS. 500/ - PER VISA APPLICATION AND THE U.S CONSULATE AN AMOUNT OF RS. 350/ - PER VISA APPLICATION. ACCORDINGLY, ON THE BASIS OF THE AFORESAID FACTS AND THE ADMITTED POSITION OF THE REVENUE IN THE PREC EDING YEARS, WE ARE OF THE CONSIDERED VIEW THAT NO INFIRMITY EMERGES FROM THE ORDER OF THE CIT(A), WHO WE FIND HAD RIGHTLY CONCLUDED THAT THE RATE OF RS. 500/ - PER APPLICATION CHARGED BY THE ASSESSEE FROM ITS AE VIZ. VFS MAURITIUS WAS FAIR AND REASONABLE. BEFORE PARTING, WE MAY HEREIN OBSERVE, THAT AS THE PROVISION OF VISA SERVICES BY THE ASSES S EE DIRECTLY TO THE U.S.A V ISA AUTHORITIES AT THE RATE OF RS. 350/ - PER APPLICATION , H A D BEEN ACCEPTED BY THE REVENUE IN THE COURSE OF THE SET ASIDE PROCEEDINGS FOR THE AFORESAID PRECEDING YEARS I.E A.Y 2009 - 10 AND A.Y 2010 - 11 AS A P A G E | 11 ITA NO.2109/MUM/2017 A.Y. 2011 - 12 DCIT - 1(3)(2) VS. M/S VFS GLOBAL SERVICES PVT. LTD. VALID CUP FOR BENCHMARKING OF THE SERVICES RENDERED BY THE ASSESSE TO ITS AE VIZ. VFS MAURITIUS FOR PROCESSING U.K VISA APPLICATIONS , THEREFORE, NO USEFUL PURPOSE WOULD BE SERVED BY RESTOR ING THE MATTER TO THE FILE OF THE A.O/TPO, AS HAD BEEN SOUGHT BY THE LD. D.R. ACCORDINGLY, FINDING NO MERIT IN THE APPEAL OF THE REVENUE, WE DISMISS THE SAME. THE GROUNDS OF APPEAL NO. 1 TO 4 ARE DISMISSED IN TERMS OF OUR AFORESAID OBSERVATIONS. 10. THE AP PEAL OF THE REVENUE IS DISMISSED. ORDER PRON OUNCED IN THE OPEN COURT ON 1 6 /10/2019. S D / - S D / - ( RAJESH KUMAR) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 16 .10.2019 *** PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI. P A G E | 12 ITA NO.2109/MUM/2017 A.Y. 2011 - 12 DCIT - 1(3)(2) VS. M/S VFS GLOBAL SERVICES PVT. LTD.