DCIT, New Delhi V. M/s Teijin Indai Pvt. Ltd., New Delhi

ITA 6625/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6217 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2011-2012
• Appeal Filed On: 14-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Keywords: Transfer pricing; International transaction; Wholly owned subsidiary
• Section: 92D

Judgement Text

1 ITA NO. 6625/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: I-2 NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 6625/DEL/20 15 (A.Y 2011-12) DCIT CIRCLE 25(1), NEW DELHI (APPELLANT) VS TEIJIN INDIA PVT. LTD. 601, 6 TH FLOOR, NEHRU PLACE NEW DELHI AACCT7234Q (RESPONDENT) APPELLANT BY MS. JAI SHREE SHARMA, SR. DR RESPONDENT BY SH. ROHIT TIWARI, ADV ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ASS ESSMENT ORDER DATED 20.10.2015 PASSED BY THE ASSESSING OFFICER U/S 143 (3) READ WITH SECTION 144C OF THE INCOME TAX ACT, 1961. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE DRP-2 ERRED IN DIRECTING AO TO COMPLETE THE ASSESSMENT AS PER OBSE RVATION MADE BY DRP IN THE ORDER WHICH RESULTING IN REDUCTION OF THE ADDIT ION OF RS.1,19,41,815/- ON ACCOUNT OF PROPOSED ADDITION OF ARMS LENGTH PRICE OF THE INTERNATIONAL TRANSACTION WITH ITS ASSOCIATED ENTERPRISES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE DRP-2 ERRED IN DATE OF HEARING 21.01.2019 DATE OF PRONOUNCEMENT 25.01.2019 2 ITA NO. 6625/DEL/2015 DIRECTING TPO TO EXCLUDE 5 MENTIONED BELOW COMPANIE S FROM THE FINAL SET OF COMPARABLES : I) INFO EDGE (INDIA) LTD. II) MEDIA RESERARCHUSERSCOUNCIL III) MMTV LTD IV) POWER SYSTEMS OPERATION CORPN. LTD. V) TSR DARASHAW. 3. THE APPELLANT CRAVES, LEAVE OR RESERVING THE RIGH T TO AMEND MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME B EFORE OR DURING THE HEARING OF THIS APPEAL. 3. TEIJIN INDIA WAS INCORPORATED IN JULY 2006 AS A WHOLLY OWNED SUBSIDIARY OF TEIJIN LIMITED, JAPAN (TEIJIN JAPAN). TEIJIN I NDIA IS ENGAGED IN THE PROVISION OF MARKETING SUPPORT SERVICES TO TEIJIN JAPAN AND O THER TEIJIN GROUP COMPANIES, AS REQUIRED. THE ASSESSEE FILED THE RETU RN OF INCOME ON 28 NOVEMBER 2011 DECLARING AN INCOME OF RS. 15,844,165 FOR THE AY 2011-12. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, TH E LD. AO MADE A REFERENCE UNDER SECTION 92CA(3) TO THE LD. TPO AND IN RESPONS E TO THE NOTICE ISSUED BY THE LD. TPO UNDER SECTION 92CA(2) OF THE ACT, THE I NFORMATION AND DOCUMENTS (AS PRESCRIBED UNDER SECTION 92D OF THE ACT READ WI TH RULE 10D OF THE RULES) MAINTAINED BY THE ASSESSEE WERE SUBMITTED TO THE LD . TPO. TPO PROPOSED ADJUSTMENT VIDE ORDER DATED 28/01/2015 AND THE DRAF T ORDER DATED 20/02/2015 WAS SERVED ON THE ASSESSEE PROPOSING UPW ARD ADJUSTMENTS IN THE INCOME OF THE ASSESSEE. THE ASSESSEE FILED OBJECTIO NS BEFORE THE DRP AND DRP VIDE DIRECTION DATED 10/9/2015 GIVEN RELIEF TO THE ASSESSEE. 4. THE REVENUE IS IN APPEAL BEFORE US. 5. THE LD. DR SUBMITTED THAT THE TRANSFER PRICING OFFICER I.E. TPO HAS GIVEN A DETAILED DISCUSSION AS REGARDS TO THE COMPARABLE SELECTED BY THE ASSESSEE IN HIS ORDER AT PARA 40 AS UNDER:- 3 ITA NO. 6625/DEL/2015 S.NO. COMPANY NAME CONTENTIONS OF THE ASSESSEE COMMENTS ON THE CONTENTIONS OF THE ASSESSEE 1 MEDIA RESEARCH USERS COUNCIL (MRUC) FUNCTIONALLY NOT COMPARABLE - REGISTERED NOT-FOR- PROFIT BODY OF MEMBERS AND ENGAGED IN CONDUCTING RESEARCHES ON ALL FORMS OF MEDIA, WHICH ARE USED BY ADVERTISERS, MEDIA HOUSES, AGENCIES AND VARIOUS GOVERNMENT ORGANIZATION. FAILS EXPORT INCOME FILTER OF GREATER THAN 75% OF TOTAL SERVICE INCOME I.E. 18.02%. ABNORMAL PROFIT MARGIN OF 40.53% MARKET SURVEY AND RESEARCH IS A PART AND PARCEL OF PROVIDING MARKET SUPPORT SERVICES. UNDER TNMM THE STANDARDS OF COMPARABILITY ARE RELATIVELY RELAXED AND ONLY BROAD SIMILARITY OF FUNCTIONS IS REQUIRED. ACCORDINGLY, IT CANNOT BE REJECTED ON ACCOUNT OF FUNCTIONAL COMPARABILITY. EXPORT TURNOVER FILTER HAS ALREADY BEEN REMOVED BY THIS OFFICE. SUPERNORMAL PROFIT COMPANIES ARE ALSO PART AND PARCEL OF INDUSTRY AND CANNOT BE REJECTED MERELY BECAUSE THEY HAVE EARNED HIGH MARGINS, UNLESS PECULIAR ECONOMIC CIRCUMSTANCES ARE POINTED OUT. IN ORDER TO EXCLUDE THE EXTREME RESULT CASES, THERE SHOULD EITHER BE A DEFECT IN COMPARABILITY OR 4 ITA NO. 6625/DEL/2015 EXCEPTIONAL CONDITIONS FACED BY SUCH COMPARABLES. IN THE PRESENT CASE, THE COMPANY IS COMPARABLE TO THE ASSESSEE AND THUS CANNOT BE REJECTED MERELY ON ACCOUNT OF EARNING SUPERNORMAL PROFITS. 2 INFO EDGE INDIA LTD. FUNCTIONALLY NOT COMPARABLE AND HIGH- END DIVERSIFIED SERVICES AN INDIAN E- COMMERCE/ ONLINE CLASSIFIEDS COMPANY WHICH IS ENGAGED IN RENDERING OF HIGH END DIVERSIFIED SERVICES IN THE AREA OF RECRUITMENT, MATRIMONY, REAL ESTATE, EDUCATION AND RELATED SERVICES. FAILS EXPORT INCOME FILTER OF GREATER THAN 75% OF TOTAL SERVICE INCOME I.E. 9.86% HIGH TURNOVER OF RS. 294 CRORES I.E. 22.6 TIMES ABNORMAL PROFIT THE COMPANY IS INVOLVED IN THE BUSINESS OF PROVIDING ADVERTISEMENT, RECRUITMENT, PROMOTION AND OTHER MARKET SUPPORT SERVICES TO VARIOUS CLIENTS, AGENCIES AND COMPANIES THROUGH WEB BASED PORTALS WHICH ARE FURTHER SUPPORTED BY ITS RETAIL SUPPORT SERVICE STATIONS FOR THE SAME ACTIVITY SPREAD THROUGHOUT THE VARIOUS GEOGRAPHICAL LOCATIONS. THE RELEVANT EXTRACT FROM THE ANNUAL REPORT OF THE COMPANY IS GIVEN BELOW:- 'INFO EDGE (INDIA) INCORPORATED IN 1995, OWNS ONE OF THE LEADING JOB PORTALS NAUKRI.COM. THE COMPANY IS A LEADING PROVIDER OF VARIOUS PORTALS RELATED TO ONLINE RECRUITMENT, MATRIMONIAL, REAL 5 ITA NO. 6625/DEL/2015 MARGIN OF 45.53% ESTATE AND EDUCATION CLASSIFIEDS AND RELATED SERVICES IN INDIA.' 'COMPANY HAS A NETWORK OF 67 OFFICES SPREAD ACROSS IN 41 CITIES IN INDIA. COMPANY ALSO OPERATES INTERNATIONALLY THROUGH 2 OFFICES IN DUBAI, 1 IN BAHRAIN AND 1 IN RIYADH. THESE INTERNATIONAL OFFICES ARE ENGAGED IN BUSINESS OF SALES, MARKETING AND PAYMENT COLLECTION ACTIVITIES OF COMPANY'S BUSINESS DIVISION. THE COMPANY HAS EMPLOYEE STRENGTH OF 1,798 PEOPLE. INFO EDGE (INDIA) OWNS FOUR SUBSIDIARIES NAMELY NAUKRI INTERNET SERVICES, JEEVANSATHI INTERNET SERVICES, INFO EDGE (INDIA) MAURITIUS AND ALLCHECKDEALS INDIA. BUSINESS RECRUITMENT- THIS DIVISION OF COMPANY IS INVOLVED IN PROVIDING RECRUITMENT THROUGH PORTALS NAMELY NAUKRI.COM, 6 ITA NO. 6625/DEL/2015 FIRSTNAUKRI.COM, NAUKRIGULF.COM, BRIJJ.COM AND QUADRANGLE-AN EXECUTIVE SEARCH AGENCY. HENCE THE COMPARABLE IS A GOOD COMPARABLE AS ITS FUNCTIONS ARE SIMILAR TO THAT OF THE FUNCTION OF THE ASSESSEE FOR BENCHMARKING OF PROVISION OF MARKET SUPPORT SERVICES TO ITS CLIENTS. EXPORT TURNOVER FILTER HAS ALREADY BEEN REMOVED BY THIS OFFICE. HIGH TURNOVER - THE APPLICABILITY OF TURNOVER FILTER HAS ALREADY BEEN DISCUSSED EARLIER IN PARA 14 OF THIS ORDER. SUPERNORMAL PROFIT COMPANIES ARE ALSO PART AND PARCEL OF INDUSTRY AND CANNOT BE REJECTED MERELY BECAUSE THEY HAVE EARNED HIGH 7 ITA NO. 6625/DEL/2015 MARGINS, UNLESS PECULIAR ECONOMIC CIRCUMSTANCES ARE POINTED OUT. IN ORDER TO EXCLUDE THE EXTREME RESULT CASES, THERE SHOULD EITHER BE A DEFECT IN COMPARABILITY OR EXCEPTIONAL CONDITIONS FACED BY SUCH COMPARABLES. IN THE PRESENT CASE, THE COMPANY IS COMPARABLE TO THE ASSESSEE AND THUS CANNOT BE REJECTED MERELY ON ACCOUNT OF EARNING SUPERNORMAL PROFITS. 3 MMTV FUNCTIONALLY NOT COMPARABLE - ENGAGED IN THE TELEVISION BROADCASTING BUSINESS AND RELATED OPERATIONS, WITHIN AND OUTSIDE INDIA FAILS EXPORT INCOME FILTER ABNORMAL PROFIT MARGIN OF 32.94% EXPORT TURNOVER FILTER HAS ALREADY BEEN REMOVED BY THIS OFFICE. SUPERNORMAL PROFIT COMPANIES ARE ALSO PART AND PARCEL OF INDUSTRY AND CANNOT BE REJECTED MERELY BECAUSE THEY HAVE EARNED HIGH MARGINS, UNLESS PECULIAR ECONOMIC 8 ITA NO. 6625/DEL/2015 CIRCUMSTANCES ARE POINTED OUT. IN ORDER TO EXCLUDE THE EXTREME RESULT CASES, THERE SHOULD EITHER BE A DEFECT IN COMPARABILITY OR EXCEPTIONAL CONDITIONS FACED BY SUCH COMPARABLES. IN THE PRESENT CASE, THE COMPANY IS COMPARABLE TO THE ASSESSEE AND THUS CANNOT BE REJECTED MERELY ON ACCOUNT OF EARNING SUPERNORMAL PROFITS. 4 GLOBAL PROCUREMENT CONSULTANTS LTD. FUNCTIONALLY NOT COMPARABLE - ENGAGED IN PROVIDING PROCUREMENT RELATED SERVICES FAILS EXPORT INCOME FILTER ABNORMAL PROFIT MARGIN OF 30.86% AS PER PAGE 3 OF AR, GPCL SYNTHESIZES INDIAN CONSULTANCY EXPERTISE IN PROJECT MANAGEMENT AND PROCUREMENT ACROSS VARIED SECTORS OF THE ECONOMY INCLUDING FINANCE, INFRASTRUCTURE, ENERGY, TRANSPORTATION, COMMUNICATION, INFORMATION TECHNOLOGY, INDUSTRY, AGRICULTURE, MINING, WATER RESOURCES, HEALTH AND EDUCATION. 9 ITA NO. 6625/DEL/2015 THE SKILL SET OF THE EMPLOYEES IS IN RELEVANT FOR MARKETING SUPPORT SERVICES AS DIFFERENT COMPANIES MAY USE DIFFERENT STRATEGIES, POLICIES, ACTION, MODE AND MEDIUM, ACTIVITY AND OUTREACH FOR MARKETING SERVICES, HENCE THE FACTOR WHICH IS RELAVANT IS THE PROPORTION OF THE ACTIVITY AND THE REVENUE GENERATES. IT IS A GOOD COMPARABLE EXPORT TURNOVER FILTER HAS ALREADY BEEN REMOVED BY THIS OFFICE. SUPERNORMAL PROFIT COMPANIES ARE ALSO PART AND PARCEL OF INDUSTRY AND CANNOT BE REJECTED MERELY BECAUSE THEY HAVE EARNED HIGH MARGINS, UNLESS PECULIAR ECONOMIC CIRCUMSTANCES ARE POINTED OUT. IN ORDER TO EXCLUDE THE EXTREME RESULT CASES, THERE SHOULD EITHER BE A 10 ITA NO. 6625/DEL/2015 DEFECT IN COMPARABILITY OR EXCEPTIONAL CONDITIONS FACED BY SUCH COMPARABLES. IN THE PRESENT CASE, THE COMPANY IS COMPARABLE TO THE ASSESSEE AND THUS CANNOT BE REJECTED MERELY ON ACCOUNT OF EARNING SUPERNORMAL PROFITS 5 APTICO LTD. FUNCTIONALLY NOT COMPARABLE - ENGAGED IN MAINLY PROVIDING ENVIRONMENT MANAGEMENT, TECHNICAL CONSULTANCY, INDUSTRIAL AND ENTREPRENEURSHIP DEVELOPMENT, TRAINING PROGRAMMES, MICRO ENTERPRISE DEVELOPMENT, WASTE MINIMIZATION AND ENERGY MANAGEMENT SERVICES AS PER PAGE 27 OF AR, MAIN OPERATIONS OF APITCO LTD. ARE MICRO ENTERPRISES DEVELOPMENT, SKILL DEVELOPMENT, ENTREPRENEURSHIP DEVELOPMENT, TOURISM & RESEARCH STUDIES, PROJECT RELATED SERVICES, INFRASTRUCTURE, PLANNING & DEVELOPMENT, ENVIRONMENT MANAGEMENT, ENERGY RELATED SERVICES, CLUSTER DEVELOPMENT, ASSET RECONSTRUCTION & MANAGEMENT SERVICES. IT IS A GOOD COMPARABLE. EXPORT TURNOVER FILTER HAS ALREADY BEEN REMOVED BY THIS OFFICE. 11 ITA NO. 6625/DEL/2015 6 TSR DARASHAW PVT. FUNCTIONALLY NOT COMPARABLE-BUSINESS TSR DARASHAW PRIVATE LIMITED IS ONE OF INDIA'S LEADING BUSINESS PROCESS OUTSOURCING (BP)) ORGANIZATION CERTIFIED UNDER THE IS) 9001:2008 GUIDELINES HAVING A TOTAL INDUSTRY EXPERIENCE OF OVER 35 YEARS. TSRDL HAS STATE-OF-THE-ART IT CAPABILITIES AND WELL TRAINED HR WHICH ARE THE KEY REQUIREMENTS FOR HANDLING BPO ACTIVITIES. TSRDLS STRENGTH, CAPABILITIES AND INFRASTRUCTURE ENABLES IT TO HANDLE ANY LARGE, VOLUMINOUS, TIME BOUND PROCESSING ACTIVITIES REQUIRING MEETING OF STRINGENT QUALITY AND SERVICE STANDARDS IN A REGULATORY ENVIRONMENT. PRESENTLY TSRDL 12 ITA NO. 6625/DEL/2015 SERVICES OVER 5 MILLION CUSTOMERS- END USERS ON BEHALF OF THEIR ESTEEMED CLIENTS, MOST OF WHOM ARE LEADERS IN THEIR RESPECTIVE INDUSTRIES. IT IS A GOOD COMPARABLE. EXPORT TURNOVER FILTER HAS ALREADY BEEN REMOVED BY THIS OFFICE. 7. POWER SYSTEM OPERATION CORPORATION LTD. FUNCTIONALLY NOT COMPARABLE - ENGAGED IN POWER SYSTEM AND MARKET OPERATIONS. GOVERNMENT COMPANY- WHOLLY OWNED SUBSIDIARY OF THE POWER GRID CORPORATION OF INDIA LIMITED WHICH IS A GOVERNMENT OF INDIA ENTERPRISE. GRANTS IN AID RECEIVED FROM GOVERNMENT DURING FINANCIAL YEAR 2010-11. FAILS TO EXPORT INCOME FILTER OF GREATER THAN 75% OF TOTAL SERVICE INCOME I.E NIL AS PER PAGE 35 OF AR, THE COMPANYS PRINCIPLE BUSINESS IS POWER SYSTEM AND MARKET OPERATION. THE COMPANY OPERATES WITHIN INDIA AND DOES NOT HAVE OPERATIONS IN ECONOMIC ENVIRONMENTS WITH DIFFERENT RISKS AND RETURNS. THE COMPANY HAS ENTERED INTO BUSINESS TRANSACTIONS WITH ITS RELATED PARTY POWER GRID CORPORATION OF INDIA LTD. DURING THE YEAR, WHICH IS ONLY 11.76% OF THE TOTAL TURNOVER OF THE COMPANY. IT IS A GOOD COMPARABLE. EXPORT TURNOVER FILTER HAS ALREADY BEEN REMOVED BY THIS OFFICE. 13 ITA NO. 6625/DEL/2015 8. APAR CHEMATEK LUBRICANTS LTD. FAILS RPT FILTER THE CONTENTION OF THE ASSESSEE EXAMINED AND ACCEPTED AFTER VERIFYING THE FACTS. THE COMPANY IS REJECTED FROM THE LIST OF COMPARABLE. THUS, THE LD. DR RELIED UPON THE ORDER OF THE TPO AND SUBMITTED THAT THE DRP HAS GIVEN A PROPER FINDING WHILE DIRECTING TPO TO EXCLUDE 5 COMPANIES FROM THE FINAL SET OF COMPARABLES WHICH ARE AS FOLL OWS:- 6. THE LD. AR RELIED UPON THE ORDER/DIRECTIONS OF T HE DRP AND SUBMITTED A DETAILED SYNOPSIS WHEREBY GIVING EACH COMPARABLES W HICH WERE EXCLUDED AS BEING THE FUNCTIONALLY NOT COMPARABLE TO THE ASSESS EE COMPANY. THE LD. AR RELIED UPON THE DECISION OF THE TRIBUNAL IN CASE OF ADOBE SYSTEMS INDIA PVT. LTD. VS. ACIT (2015) ITA NO. 6165 & 6287/DEL/2015 O RDER DATED 6/7/2018. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. FROM THE ANNUAL REPORTS OF EACH OF THE CO MPARABLES CONTESTED BY THE REVENUE IT CAN BE SEEN THAT COMPARABLES ARE FUNCTIO NALLY DISSIMILAR TO THE ASSESSEE COMPANY. THESE COMPARABLES ARE CONSIDERED IN CASE OF ADOBE SYSTEMS INDIA PVT. LTD. (SUPRA) FOR THE SAME ASSESS MENT YEAR 2011-12 AND FROM THE PERUSAL OF THE TRIBUNALS ORDER IT CAN BE SEEN THAT THESE COMPARABLES ARE FUNCTIONAL DIFFERENT THAN ASSESSEES COMPANY. THE TRIBUNAL HELD AS UNDER FOR EACH OF THE COMPARABLES FOR A.Y. 2011-12 REGARD ING MARKETING SUPPORT SERVICES: 25. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE B Y BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SO F AR AS MMTV LTD. IS CONCERNED, THE DRP EXCLUDED THIS COMPANY FROM THE L IST OF COMPARABLES ON THE 14 ITA NO. 6625/DEL/2015 GROUND THAT THIS IS FUNCTIONALLY DIFFERENT ENTITY AND DOES NOT MAKE A GOOD COMPARABLE TO THE ASSESSEE IN MSS FUNCTION. FURTHE R, THE SUBMISSION OF THE ASSESSEE THAT IT HAS SIGNIFICANT INTANGIBLES COULD NOT BE CONVERTED BY THE LD. DR . SINCE THE ABOVE COMPANY IS ENGAGED IN THE BUS INESS OF TELEVISIONS BROADCASTING AND RELATED OPERATIONS AND IT HAS GOT SIGNIFICANT INTANGIBLES, THEREFORE, WE HOLD THAT THIS COMPANY CANNOT BE COM PARED WITH THAT OF THE ASSESSEE COMPANY. THE ORDER OF THE DRP IS ACCORDIN GLY UPHELD. 26. SO FAR AS MEDIA RESEARCH USERS COUNCIL IS CONCE RNED, WE FIND THIS COMPANY IS A COUNCIL OF MEDIA COMPANIES WITH MEMBER S COMPRISING ADVERTISERS, PUBLISHERS, ADVERTISING AGENCIES AND C OMPANIES FROM BROADCAST AND OTHER MEDIA AND ENGAGED IN UNDERTAKING SURVEYS, RESEARCH INTO THE READERSHIP, VIEWERSHIP, LISTENERSHIP OF VARIOUS MED IA FOR ADVERTISING. WE, THEREFORE, UPHOLD THE ORDER OF THE DRP ON THIS COUN T IN HOLDING THAT MEDIA RESEARCH USERS COUNCIL IS A FUNCTIONALLY DIFFERENT ENTITY AND HENCE DOES NOT MAKE A GOOD COMPARABLE TO THE ASSESSEE IN MSS FUNCT ION. THE ORDER OF THE DRP IS ACCORDINGLY UPHELD. 27. SO FAR AS POWER SYSTEMS OPERATION CORPORATION L TD IS CONCERNED, WE FIND THIS IS A GOVERNMENT OF INDIA UNDERTAKING AND HAVING RPT FILTER 48.20%. THIS COMPANY IS ALSO FUNCTIONALLY DIFFERENT AND SEG MENTAL DETAILS ARE NOT AVAILABLE. FURTHER, IT FAILS EXPORT TURNOVER FILTE R BEGIN 14.16%. WE, THEREFORE, UPHOLD THE ORDER OF THE DRP IN EXCLUDING THIS COMPA NY FROM THE LIST OF COMPARABLES. .. 31. SO FAR AS TSR DARASHAW LTD IS CONCERNED, WE FIN D THIS COMPANY IS ENGAGED IN SHARE REGISTRY AND TRANSFER SERVICES, DE POSITORY SERVICES, RECORD MANAGEMENT, PAYROLL AND PROVIDENT FUND MANAGEMENT A ND CORPORATE FIXED DEPOSIT MANAGEMENT WHICH ARE IN THE NATURE OF IT EN ABLED SERVICES AS EVIDENT FROM PAGE 21 OF THE ANNUAL REPORT. WE, THEREFORE, UPHOLD THE ORDER OF THE DRP 15 ITA NO. 6625/DEL/2015 IN HOLDING THAT THIS IS FUNCTIONALLY DIFFERENT ENTI TY. FURTHER, THIS COMPANY WAS REJECTED BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10 AND THE DRP IN ASSESSEES OWN CASE FOR ASSESSMENT Y EAR 2010-11 AND NO APPEAL WAS FILED BY THE REVENUE BEFORE THE TRIBUNAL . WE, THEREFORE, UPHOLD THE ORDER OF THE DRP IN EXCLUDING THE COMPANY FROM LIST OF COMPARABLES. THE GROUND NO.2 BY THE REVENUE IS ACCORDINGLY DISMISSED . 40. AFTER HEARING BOTH THE SIDES, WE FIND THE INFO EDGE (INDIA) LTD. WAS INCLUDED BY THE TPO HOLDING THAT IT IS FUNCTIONALLY COMPARABLES WHICH HAS BEEN UPHELD BY THE DRP. WE FIND THE TRIBUNAL IN TH E CASE OF ROLLS-ROYCE INDIA PVT. LTD. (SUPRA) WHILE DIRECTING THE TPO TO EXCLUDE THIS COMPANY AS COMPARABLE FROM THE MARKET SUPPORT SERVICES SEGMENT HAS OBSERVED AS UNDER:- 21. REGARDING INFOEDGE INDIA PVT. LTD WE ARE OF T HE VIEW THAT THIS COMPANY HAS BEEN INCLUDED BY THE TPO HOLDING THAT I T IS FUNCTIONALLY COMPARABLE. ASSESSEE CONTENDED BEFORE THE LD. TPO AS WELL AS DRP THAT THIS COMPANY IS FUNCTIONALLY NOT COMPARABLE IN VIEW OF IT ENGAGED IN MANAGEMENT OF ONLINE PORTALS AND ALSO HAS MAJOR SOU RCES OF REVENUE AS ADVERTISEMENT INCOME. BOTH THE LOWER AUTHORITIES R EJECTED THE CONTENTION OF THE ASSESSEE. WE HAVE CAREFULLY CONSIDERED THE RIV AL CONTENTIONS. IT IS APPARENT THAT THE COMPARABLE SELECTED BY TPO IS EN GAGED IN ONLINE PORTAL ACTIVITIES SUCH AS EMPLOYMENT WEBSITE, MATRIMONIAL WEBSITE AND ITS MAJOR REVENUE IS ADVERTISEMENT AND SUBSCRIPTIONS. IT HAS DIVERSIFIED SERVICES SUCH AS RECRUITMENT RELATED, REAL ESTATE RELATED, M ATRIMONIAL RELATED SERVICES AND OWNS SIGNIFICANT ROLLS ROYCE INDIA PV T. LTD. VS. DCIT ITA NO. 6636/DEL/2015 ASSESSMENT YEAR 2011-12 INTANGIBLES/W EBSITES SUCH A NAUKRI.COM, 99 ACRE.COM ETC. THEREFORE, THIS COMPA NY IS FUNCTIONALLY DIFFERENT AS IT IS PROVIDING AN ADVERTISEMENT SPACE AS WELL AS ONLINE PORTAL BASED ON SUBSCRIPTION BY THE BUYER AND SELLER OF TH E SERVICES COMPARED TO 16 ITA NO. 6625/DEL/2015 SERVICES PROVIDED BY THE ASSESSEE OF MARKETING SUPP ORT SERVICES. IN VIEW OF THIS WE DIRECT LD. TPO FOR EXCLUSION OF THIS COM PARABLE. 41. SIMILARLY, THE TRIBUNAL IN THE CASE OF LINKEDIN TECHNOLOGY INFORMATION PVT. LTD. (SUPRA) HAS DIRECTED THE TPO TO EXCLUDE THIS COMPANY FROM THE LIST OF COMPARABLE. 42. FOLLOWING THE ABOVE TWO DECISIONS AND CONSIDERI NG THE FACT THAT THE FUNCTIONS OF INFO EDGE (INDIA) LTD IS DIFFERENT FRO M THAT OF THE CASE OF THE ASSESSEE, WE HOLD THAT THE ABOVE COMPANY IS NOT A COMPARABLE. WE ACCORDINGLY DIRECT THE ASSESSING OFFICER /TPO TO EX CLUDE THIS COMPANY FROM THE LIST OF COMPARABLES. THE ASSESSEE COMPANY IS ENGAGED IN PROVISIONS OF MA RKETING SUPPORT SERVICES TO TEIJIN-JAPAN AND OTHER GROUP COMPANIES, WHILE TH E COMPARABLES ARE FUNCTIONALLY DIFFERENT FROM THE ASSESSEE COMPANIES WHICH CAN BE SEEN FROM THE ANNUAL REPORTS OF EACH OF THE COMPARABLES. THE DRP HAS GIVEN PROPER DIRECTION FOR EXCLUDING THESE COMPARABLES CONTESTED BY THE RE VENUE. THE LD. DR ALSO WAS NOT ABLE TO DEMONSTRATE THAT THE FUNCTIONAL PRO FILE OF THESE COMPARABLES IS SIMILAR TO THAT OF ASSESSEE COMPANY. THEREFORE, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 9. IN RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2019 . (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 25/01/2019 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 17 ITA NO. 6625/DEL/2015 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 21.01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 21.01.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 25 .01.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 25.01.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 25.01.2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK