| The Tax Publishers2020 TaxPub(DT) 3550 (Mum-Trib) INCOME TAX ACT, 1961
Section 92C
Mahindra Consulting Engineers Ltd. was engaged in providing a variety of services, only one of which was engineering services could not in the absence of segmental information of engineering services be considered as comparable to assessee engaged in design and engineering services only.
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Transfer pricing - Determination of ALP - Selection of comparables - Functional diversity and lack of segmental information
Assessee engaged in Design & Engineering Services in the field of refineries, petro-chemicals, cements, fertilizers and power plants, rendered such services to its AE abroad. TPO considered Mahindra Consulting Engineers Ltd. as comparable to assessee's case. Held: Mahindra Consulting Engineers Ltd. (MCEL) was engaged in diversified services, such as project management, portfolio management and consultancy services. Further, the company manages various portfolio companies which include various industries, sectors like cleantech, Steel, Logistics, etc. It was also engaged in Provisions of consultancy services in Special Economic Zones, water supply and sewerage and solid waste management, urban infrastructure, Agri-and-Horti infrastructure, Social infrastructure, Marine infrastructure, industrial infrastructure and Renewable energy. Although the company provided sector development to various types of industries, but no segmental data had been provided in financials. Further, it failed export filter, because, assessee had generated revenue in foreign exchange, which was at 67 of total revenue, while MCEL had merely 0.93% revenue in foreign exchange. Further, more MCEL carried intangibles worth of Rs. 40,69,438, whereas assessee did not possess any intangibles. Hence, there could be no comparability analysis.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 92C
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