THYSSENKRUPP ELEVATOR (INDIA) PVT. LTD.,NEW DELHI V. DCIT, NEW DELHI

ITA 1996/DEL/2016

AI Insights

The case involves T.K. Elevators India Private Limited, which appealed against the order of the Commissioner of Income Tax (Appeals) that upheld various additions made by the Assessing Officer in the assessment for the year 2010-11. The main issues in the appeal included the treatment of advances received from customers, the disallowance of a security deposit written off, and adjustments made under Transfer Pricing for international transactions with associated enterprises. The Tribunal examined the legal and factual basis of these issues, referencing previous judgments and the principles laid down by the Supreme Court in Taparia Tools Ltd. The Tribunal's decision favored the assessee on all grounds, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31530 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Other Referred Cases: Taparia Tools Ltd (SC) (2015) 55 Taxmann.com361, PCIT v. Cashedge India Private Limited in ITA no. 279/2016 dated 04.05.2016, DE Shaw India Advisory Services (P) Ltd. [2017] 87 taxmann.com 15 (Del-Trib), Ericsson India (P) Ltd vs. Additional Commissioner of Income Tax in ITA No. 1672/Del/2014, Tech Micro India(Ltd) vs DCTT (2015) 64 taxmann.com462 (Del)(Trib), Kobelco Cranes India Ltd. vs. ITO [2016) 70 taxmann.com3 (Del-Trib), Addidas Technical Services (P.) Ltd. vs. DCIT [2016] 69 taxmann.com 401 (Delhi-Trib)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APPELLANT ASSESSEE; APPELLANT ASSESSEE; DHARM VEER SINGH
• Assessee Lawyers: SHASHI M. KAPILA
• Keywords: Set aside; Opportunity of being heard; Transfer pricing; International transaction; Depreciation; Principle of natural justice; Arm length price
• Section: 142(1); 143(2); 64; 37(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘H’ NEW DELHI BEFORE SHRIRAMIT KOCHAR, ACCOUNTANTMEMBERAND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No.1996/Del/2016 (Assessment Year :2010-11) T.K.Elevators India Private Limited (Formerly ThyssenKrupp Elevator (India) Pvt. Ltd.) 429, Functional Industrial Estate, Patparganj, New Delhi – 110 092 PAN : AABCT 6921 F Vs. DCIT Circle – 25(1) New Delhi – 110 002 (Appellant) (Respondent) Assessee by Ms. Shashi M. Kapila, Adv., Shri Parvesh Sharma, Adv. & Shri Sushil Kumar, Adv. Respondent by Shri Dharmveer Singh, CIT-D.R. Date of Hearing 20.02.2025 Date of Pronouncement 19.03.2025 O R D E R PER VIMAL KUMAR,JM: 1. The appeal filed by assessee is against the order dated 03.11.2015 of Learned Commissioner of Income Tax (Appeals)-44, New Delhi [hereinafter referred to as ‘Ld. CIT(A)’] arising out of assessment order dated 30.04.2014passed by the Dy. Commissioner of Income Tax, Circle – 16(1), New Delhi (hereinafter referred as ‘Ld. AO’) under section 143(3)/144C of the Income Tax -2-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 Act, 1961 [hereinafter referred to as ‘the Act’] for the Assessment Year 2010-11. 2. Brief facts of the care are that the appellant/assessee company filed return of income for A.Y. 2010-11 on 29.03.2012 declaring income of Rs.14,77,79,575/-. The case was taken up for scrutiny. Notice under section 143(2) of the Act dated 29.08.2011 was issued. Notice under section 142(1) of the Act dated 15.12.2011 along with a questionnaire was issued. Shri Jatinder Singh and Ms. Shweta Kapoor, C.A. & Authorized Representative for appellant/assessee attended proceedings. The company had entered into international transaction with associated enterprises. A reference was made to the Transfer Pricing Officer (TPO) to determine the Arm’s Length Price (ALP) of the International Transactions. The TPO passed order dated 29.01.2014 under section 92CA(3) of the Act relating to business support services at Rs.3,05,42,857/- by making addition of Rs.83,69,069/-. On completion of assessment proceedings learned AO made additions of Rs. 20,00,04,372/- on account of advance from customers, Rs.7,05,290/- on account of advance written off, Rs.83,69,069/- on account of transfer pricing and Rs.1,95,53,494/- on account of depreciation vide order dated 30.04.2014. -3-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 3. Against assessment order dated 30.04.2014, appellant/assessee preferred appeal before the learned CIT(A), which was partly allowed vide order dated 03.11.2015. 4. Being aggrieved, appellant/assessee preferred present appeal with the following grounds: 1. That the order of the learned Commissioner of Income-tax (Appeals)-44, New Delhi [\"CIT(A)\"] is bad both in law and on facts of the case. 2. That the learned CIT(A) has erred in making erroneous observations, assumptions, interpretations and conclusions, both on facts and in law. 3. That the learned CIT(A) has erred in upholding the additions of Rs. 20,00,04,372/- crore made by the learned assessing officer in respect of 'Advance received from Customers' under the contracts entered into by the assessee, which does not constitute revenue/income of the relevant assessment year, without appreciating the submissions made by the assessee and documents/details placed on record. 3.1 That the learned CIT(A) has failed to appreciate the system of accounting as followed, the terms of the contracts as entered into and the nature of business as carried on, while upholding the addition to the income of the amount received towards Advance under the contracts, based on irrelevant considerations and ignoring the audited financial statements. 3.2 That the learned CIT(A) has erred in mechanically following the order of CIT(A) for AY 2009-10 and thereby holding that the revenue has not been recognized as per accounting standard, contrary to the fact not disputed by the assessing officer, without giving an opportunity of being heard to the assessee. The addition as such is arbitrary and against the principles of natural justice and is untenable. -4-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 3.3 That the learned CIT(A) has erred in ignoring the orders of the CIT(A) for AY 2005-06 to AY 2008-09 in this regard and observations made therein as regards following of Accounting Standards by the assessee. 3.4 That the learned CIT(A) has erred in merely following the order passed in earlier years regarding addition in respect of advance received from customers under AMC contract, without appreciating that the observations made in the earlier year assessment orders and CIT(A)'s orders are factually erroneous. 4. That the learned CIT(A) has erred in upholding the disallowance of Security Deposit written off, amounting to Rs. 4,82,597 debited under the accounting head 'Advances written off in the books of account, without appreciating the facts of the case, nature of the expense, and without affording opportunity of being heard to the assessee. The order as such is vitiated in law. 5. That the learned CIT(A) has erred in upholding the addition of Rs 83,69,069 to the total income, on account of Transfer Pricing (\"TP\") adjustments in respect of international transactions of 'commission received with its Associated Enterprise viz. ThyssenKrupp Elevators (Shanghai) Co. Ltd. (\"the AE\"). 5.1 That the learned CIT(A) has failed to understand the functions performed by the assessee in respect of the transaction of 'commission received'. 5.2 That the learned CIT(A), based on irrelevant considerations, has erred in holding that the assessee has provided 'Technical/ Business Support Services' to the AE, as against 'Business/ Market Support Services' held by the AO on the same facts. 5.3 That the learned CIT(A) has erred in rejecting the comparables filed by the assessee, based on his erroneous observation that the functions performed by the assessee in respect of transaction of commission received are not similar to the functions performed by the comparable, without appreciating -5-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 that the learned AO had himself considered the terms of agreement with the comparable as of 'Business/ Market Support' provider. 5.4 That the learned CIT(A) has erred in not appreciating that the same comparable was accepted by the TPO in subsequent year for benchmarking the international transaction of 'commission received' on similar facts. 5.5 That, without prejudice to the other grounds, the learned CIT(A) has erred in wrongly observing that the comparables selected by the learned TPO has not been challenged by the assessee, and thereby upholding the comparison of the assessee with the enterprises engaged in 'Business/ Marketing Support Services', having different Functional, Assets and Risk profile of their activities, without appreciating that: a. the basis and criteria for considering the aforesaid entities as comparable under the category 'Business/ Marketing Support Services' was neither provided to the assessee nor was stated in the assessment order. As such, the comparison as made was vitiated in law. b. the filters/ process applied by the learned TPO for selecting the comparables and computing their operating profit margin is erroneous. 5.6 That, without prejudice to the other grounds, the learned CIT(A) has erred in upholding the application of Transaction Net Margin Method (\"TNMM\") at entity level i.e. on aggregate profits of the assessee, to determine arm's length price of the subject transaction which is only a small fraction of the total revenue. 5.7 That, without prejudice to the other grounds, the learned CIT(A) has erred in not considering segmental profits of the assessee for the subject transaction, for the purpose of application of TNMM. 5.8 That, without prejudice to the other grounds, the learned CIT(A) has erred in upholding the computation of the operating profit -6-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 margin of the assessee as 7.5% on sales instead of 11.94%, without providing any reasons therefor. 5.9 That, without prejudice to the other grounds, the learned CIT(A) has failed to appreciate that the revenue earned by the assessee from the subject transaction was pure profit margin, as the transaction did not require separate investment and cost, and as such, the relevant profit margin from the subject transaction was more than the profits earned by the comparable companies. 5.10 That, without prejudice to the other grounds, the learned CIT(A) has erred in not approving entity level comparison of profits of the assessee with the entities engaged in the business of elevators, escalators, etc. in which the assessee is engaged. 6. That the learned CIT(A) has erred in confirming levy of interest u/s 234B, 234C & 234D.” 5. Learned Authorized Representative for appellant/assessee submitted that Ground of appeal Nos.1 & 2 are general in nature. 6. Learned Authorized Representative for appellant/assessee regarding ground of appeal nos.3 & 3.1 & 3.2 submitted that learned CIT(A) failed to appreciate that the issue of “advance received from customers’ was decided in favour of the assessed for A.Υ. 2005-06, Α.Υ.2006-07, Α.Υ. 2007-08 by the Tribunal. 6.1 This issue is covered in favour of the TKEI by order of Delhi High Court for A.Υ. 2005-06 (Annexed as annexure -1 at Pg. 9-10) and A.Υ. 2006-07 (Annexed as annexure -2 at Pg. 11-12) and A.Υ. 2007-08 (Annexed as annexure -3 at Pg. 13-14). -7-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 6.2 This is also covered by ITAT in Assessee’s own case for A.Y 2009-10. Copy of Order annexed as Annexure -4 at Pg. 15-34) 6.3 The Hon'ble High Court in assessee's own case for A.Y 2005- 06, 2006-07 and 2007-08 has accepted the accounting treatment given by the assessee to “Advances received from the customers relying upon the principle laid down in Taparia Tools Ltd (SC) (2015) 55 Taxmann.com361”. 7. Learned Authorized Representative for the assessee/appellant regarding ground no.4 submitted that advances given to MTNL and BTPS by M/s. ECE as security deposit for obtaining tenders. The Appellant had requested M/s. ECE to provide documents in relation to the same for getting the deposit back. However, no documents could be traced by ECE and MTNL/BTPS being Govt. Corporations. These Govt. bodies did not release these advances. As such, these advances amounting to Rs.4,82,597/-had to be written off as irrecoverable of business. These arose out of carrying out business in normal course. As these arose out of normal business operations and wholly and exclusively in relation to carrying on of business those have been claimed as allowable under section 37(1) of the Act. (Ref pages: 134-135 of IT Volume-I) Details of advances written during the year at page 368 of IT Vol-I. (See Page 534 of Vol-II.) -8-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 8. Learned Authorized Representative for the assessee/appellant regarding ground no.5 submitted that the major international transactions undertaken by assessee with its Associated Enterprise (AE), during the assessment year with the most appropriate method for benchmarking. 9. Learned Authorized Representative for the assessee/appellant submitted regarding ground no.6 that this ground is consequential in nature therefore left open. 10. Learned Departmental Representative for the Department of Revenue submitted that learned CIT(A) in para no.4 has rightly dealt with the issue of advances received from customers under the contract entered into by the assessee. 10.1 Learned Departmental Representative for the Department of Revenue submitted that the assessee had failed to submit any documents regarding advances given to MTNL and BRPS by M/s. ECE as security deposit for availing benefit of section 37(1) of the Act filing of advances is necessary. 10.2 Learned Departmental Representative for the Department of Revenue submitted that learned CIT(A) had dealt with the issue of Transfer Pricing Adjustment properly. Reference to TP study was made. At the most, the matter may be referred to TPO/AO. -9-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 11. From examination of record in light of aforesaid rival contentions, it is crystal clear that the Ground No. 3pertains to “advance received from customers”under the contracts entered into by the assessee, which does not constitute revenue/income of the relevant assessment years. Ground No.3.1relates to “advances from Customers”represents initial advance received on signing the contract (Reflected as ‘Current Liabilities’ in B/S ) Rs. 17.07 crores.Ground No.3.2 pertains to “deferred revenue”represents unadjusted advance received through Progress Billing in the case of new installation and significant modernization jobs, in respect of which revenue is yet to be recognized the basis of on percentage completion method in terms with Accounting Standard(AS-7) (Reflected as deferred revenue in B/S) Rs. 2.9 crores and Ground No.3.3relates to “Deferred Revenue (Maintenance Contracts)”represents unadjusted advance received through Progress Billing in respect of maintenance contracts, the term of which has yet to expire at the end of the relevant financial year. (Reflected as deferred revenue in B/s) Rs. 21.99 crores. 11.1 Learned CIT(A) in para no.4 failed to appreciate that the subject matter of adjudication was decided in favour of the assessee for A.Ys. 2005-06 & 2007-08. Moreover, the issues are covered byorder dated 27.09.2024 in ITA Nos.4043 & 3805/Del/2015 for A.Y. 2009-10 in assessee’s own case. The judgments were based on -10-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 principle laid down by Hon’ble Supreme Court in Taparia Tools Ltd (SC) (2015) 55 Taxmann.com 361 as under: “(20) At the most, an inference can be drawn that by showing this expenditure in a spread over manner in the books of accounts, the assessee had initially intended to make such an option. However, it abandoned the same before reaching the crucial stage, inasmuch as, in the income tax return filed by the assessee, it chose to claim the entire expenditure in the year in which it was spent/paid by invoking the provisions of Section 36(1)(iii) of the Act. Once a return in that manner was filed, the AO was bound to carry out the assessment by applying the 3 (1972) 3 SCC 252 4 (1997) 6 SCC 117 5 (1978) 4 SCC 358 6 (1999) 8 SCC 338 Civil Appeal Nos. 6366-6368 of 2003 and provisions of that Act and not to go beyond the said return. There is no estoppel against the Statute and the Act enables and entitles the assessee to claim the entire expenditure in the manner it is claimed. (21) In view of the aforesaid discussion, we are of the opinion that the judgment and the orders of the High Court and the authorities below do not lay down correct position in law. The assessee would be entitled to deduction of the entire expenditure of ₹2,72,25,000 and ₹55,00,000 respectively in the year in which the amount was actually paid. The appeals are allowed in the aforesaid terms with no orders as to costs.” 12. Accordingly, Ground Nos.3, 3.1 & 3.2 of the assessee’s appeal are allowed. 13. Ground No.4 regarding disallowance of Rs.4,82,597/- security deposit written off, debited under the accounting head advances written off. The advances given to MTNL and BTPS by ECE as security deposit for obtaining tenders. In para no.6.2(e), it is mentioned that the appellant as requested M/s. ECE to provide documents in relation to the same for getting the deposit back -11-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 however, no documents could be traced by ECE and MTNL/BTPS and could not realized and advances were written off. The assesse failed to submit documents in support of non realization for claiming benefit of Section 37(1) of the Act. The appellant assesse had no means to recover and were written off under the head. However , in view smallness of the amount vis-à-vis income of Rs. 14,77,79,575/- of the assesse, the assesse claim for disallowance to be allowed as business loss as it pertains to revenue field on account of security deposit for participating in tenders. 14. Accordingly, Ground No .4 of the assessee’s appeal is allowed. 15. Ground No.5 pertaining to addition of Rs.83,69,069/- on account of Transfer Pricing Adjustment. Appellant had undertaken International Transactions with its associate enterprises during the financial year as under: International Transactions during A.Y. 2010-11 International Transaction Method Amount (in INR) Import of Components and spares TNMM 32,541,569/- Export of Components and spares TNMM 128,064/- Import of elevators / escalators CUP, 154,723,184/- Provision of services TNMM 23,970,222/- Agreement with Thyseen Krupp Elevator Australia Pty. Ltd. for installation, testing and commissioning of elevators, escalators & travelators CUP 179,053,589/- Other Transaction CPM 8,332,630/- -12-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 15.1 TPO in para no.6 selected 7 comparables companies as comparable for bench marking the transactions as under: Sr. No. Company Name OP/OC 1. Apitco Ltd. 40.09 2. Cyber Media Research Ltd. 14.85 3. Global Procurement Consultants Ltd. 37.19 4. HCCA Business Services 20.05 5. Quadrant Communications Ltd. 13.11 6. Quipoo Valuers 25.49 7. TSR Darashaw Ltd. 41.15 Average 27.42 15.2 TPO has erred in not including foreign exchange fluctuation as a integral part of operating profit/loss. The amendment to Income- tax Rules, 1962 by incorporating safe harbor rules vide Rule 10TA was subsequent to the impugned assessment year. Reference is drawn to the judgment and order of Hon’ble Delhi High Court in the case of PCIT v. Cashedge India Private Limited in ITA no. 279/2016 dated 04.05.2016. Hon’ble Delhi Tribunal inDE Shaw India Advisory Services (P) Ltd. [2017] 87 taxmann.com 15 (Del-Trib)in para 10.11 has observed as under: “10.11 The only effective ground remaining to be adjudicated is on the plea of the assessee to treat foreign exchange gain/loss as operating in nature. This issue is squarely covered in favour of the assessee by the order of ITAT Delhi Bench in the case of Ericsson India (P) Ltd vs. Additional Commissioner of Income Tax in ITA No. 1672/Del/2014 reported in 185 TTJ (Del) 738 wherein the ITAT Delhi Bench in Para 17 of the said order, while ruling in favour of the assessee, directed the TPO to treat the foreign exchange gain/loss as operating in nature in calculating the operating margin of the assessee as well as final comparable companies. Respectfully -13-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 following the same, we set aside this issue to the file of TPO/AO to treat the foreign exchange gain/loss as operating in nature in calculating the operating margin of the assessee as well as final comparable companies. Accordingly, this ground stands allowed for statistical purposes in all the three years before us.” 15.3 TPO had selected 7 following companies as comparables with dissimilar functions/assets/risk without confronting the assessee, which is gross in violation of principle of natural justice : 1. Aptico Limited. (AR at Pgs. 319-322 of TP Vol-II) Aptico provides micro enterprises development, skill development, entrepreneurship development, tourism development &research. (see page 319 of TP Vol-II). As the functions are entirely dis-similar & incomparable with the functions of the assessee this should be excluded as a comparable on this ground alone. This company was excluded as a comparable by Hon'ble ITAT from the list of comparables as functionally dissimilar in A.Y. 2010-11 to the companies providing market support services to it's AE in the following cases. Reliance is placed on: i) Tech Micro India(Ltd) vs DCTT (2015) 64 taxmann.com462 (Del)(Trib) (Para 7 at pages 46-47 of DPB) ii) Kobelco Cranes India Ltd. vs. ITO [2016) 70 taxmann.com3 (Del-Trib) (Para 8.3 atpgs. 69-70 of DPB) ii) Addidas Technical Services (P.) Ltd. vs. DCIT [2016] 69 taxmann.com 401 (Delhi-Trib) (Para 8.3(a) at pg. 73J of DPB) 2. Global Procurement Consultants Ltd (A.R Pgs. 377-430 of TP Vol-II) -14-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 This company is also not a fit comparable as its functions are totally dissimilar. Attention is invited to Pg. 384 of TP Vol-11 wherein it is clear that this company is engaged in providing consultancy services and procurement processes in the area of health which is funded by World Bank. This company for same A.Y 2010-11 was excluded by Hon'ble ITAT from the list of comparables as functionally dissimilar to the companies providing market support services to it's AE in the following cases: i) Tech Micro India (Lad) vs DCIT [2015] 64 taxmann.com462 (Del) (Trib)(Para 8 at pages 47-48 of DPB) ii) Hyundai Rotem Company Vs. ACIT [2016] 73taxman.com42 (Del-trib) Para 8 at pg 59 DPB. ii) Kobelco Cranes India Ltd. vs ITO [2016] 70 taxmann.com3 (Del- Trib) (Para 8.3 at pg 70-71 of DPB) iv) Addidas Technical Services (P.) Ltd vs DCIT [2016] 69 taxmann.com401 (Delhi-Trib) (Para 8.3(b) at pg. 73J of DPB) 3. HCCA Business Services HPCCA Business services are engaged in services of payroll processing and compensation structure management of labor and legal compliances. This comparable is entirely dissimilar to services provided by the assessee. This company for same A.Y 2010-11 was excluded by Hon'ble ITAT from the list of comparables as functionally dissimilar to the companies providing market support services to it's AE. Reliance is placed on: i) Hyundai Rotem Company Vs. ACIT [2016] 73taxman.com42 (Del-Trib) Para 9 at pg. 59 4. Quipo Valuers and Auctioneers Pvt Ltd. (A.R Pgs. 465-501 of TP Vol-II) -15-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 This company does services as an auctioneer and is also valuation of construction equipment, earth moving machineries etc. (Please see pg. 465 of TP Vol-II) Hence this company cannot be taken as a proper comparable. Reliance is placed on: Addidas Technical Services (P.) Lad vs DCIT (2016) 65 taxman com401 (Delhi-Trib) (Para 8.3(c) at pg 73k of DPIB) 5. TSR Darashaw Lid (A.R Pgs. 502-530 of TP Vol-11) TSR Darashaw Ltd. is a broking and investment banking house and as 57.4% of its income is from the share registry services segment. This comparable is engaged in payroll process outsourcing. It is a leading Business Process Outsourcing (BPO) and rendering HR Services. Hence Ex-facie this cannot be taken as a proper comparable. 1) Tech Micro India(Ltd) vs DCIT [2015] 64 taxmann com462 (Del)(Trib) (Para 9 at pages 48-49 of DPB) ii) Hyundai Rotem Company Vs. ACIT [2016] 73taxman.com42 (Del-Trib) Para 10 at pg. 39 DPB iii) Kobelco Cranes India Ltd. vs ITO [2016] 70 saxmann.com) (Del- Trib)(Para 8.3 at pg 71-72 of DPB) iv) Addidas Technical Services (P.) Lad vs DCIT (2016) 69 taxmann.com401 (Delhi-Trib) Para 8.3(d) at pg. 73k of DPB) Conclusion: Once these dissimilar comparable are excluded then the Operating profit /Sales margin works out to 13.98 as per table below which is within the +-5% range with assessee. Company Name OP/OC Cyber Media Research Ltd 14.85 Quadrant Communications Ltd 13.11 -16-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 Average 13.98 It is to be noted that in the subsequent year the TPO has accepted commission as arm length price and has not made any addition there under. (Annexed as Annexure – 5 at pg.35-42) 16. In view of above, once the companies selected were dissimilar comparable are excluded then the operating profit/sales margin works out to 13.98. Moreover in subsequent years the TPO has accepted commission as Arm’s Length and has not made any addition vide order dated 29.01.2015. 17. Accordingly, Ground No.5 of assessee’s appeal is allowed. 18. In view of fact of allowing of Ground of appeal nos.3 to 5 having been allowed Ground of appeal no.6 is allowed. 19. In the result, appeal filed by assessee is allowed. Order pronounced on this day 19th March, 2025. Sd/- Sd/- (RAMIT KOCHAR) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 19.03.2025 Pr i ti Y adav, S r. PS * -17-ITA No.1996/Del/2016 T.K.Elevator India Private Limited (Formerly Thyseen Krupp Elevator (India) Pvt. Ltd.) vs. DCIT A.Y. 2010-11 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "