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| The Tax Publishers2023 TaxPub(DT) 149 (Mum-Trib) INCOME TAX ACT, 1961
Section 92C
The foreign AE was admittedly least complex functions and did not know any intangible and further the assessee had used the Standard and Poor's CompStat and Merchant Database. The comparability analysis showed that total population of 285 companies was available with respect to market sales support and customer relationship services and 940 companies were available in provision of revenue cycle management services by using one source global business process database. Thus, foreign AE satisfied all the criteria for being taken as a tested party. TPO merely rejected the same as AE was located in different geographical locations. There was no proper justification by TPO to reject foreign AE as a tested party.
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Transfer pricing - Determination of ALP - TPO rejected foreign AE as tested party as AE was located in different geographical location -
Assessee entered into international transaction of availing of marketing sale support and customer relationship services and also provision of revenue cycle management services. Assessee benchmarked these transactions separately, adopting Transactional Net Margin Method as the most appropriate method selecting the wholly owned subsidiary in US as tested party. TPO rejected foreign Associated Enterprises as a tested party and after taking assessee as tested party proposed ALP adjustment.Held: The foreign AE was admittedly least complex functions and did not know any intangible and further the assessee had used the Standard and Poor's CompStat and Merchant Database. The comparability analysis showed that total population of 285 companies was available with respect to market sales support and customer relationship services and 940 companies were available in provision of revenue cycle management services by using one source global business process database. Thus, foreign AE satisfied all the criteria for being taken as a tested party. TPO merely rejected the same as AE was located in different geographical locations. There was no proper justification by TPO to reject foreign AE as a tested party.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2011-12
IN THE ITAT, MUMBAI 'K' BENCH
PRASHANT MAHARISHI, A.M. & KAVITHA RAJAGOPAL, J.M.
Dy. CIT v. Inventurus Knowledge Solutions (P.) Ltd.
IT Appeal No. 2403 (Mum) of 2018, CO No. 249 (Mum.) of 2019
A.Y. 2011-12
21 October, 2022
Appellant by: Samruddhi D. Hande, Sr. AR
Respondent by: SC Tiwari and Umamagswari M., AR's
Prashant Maharishi, A.M.
ITA No. 2403/Mum/2018 is filed by the learned Dy. Commissioner of Income Tax 15(2)(1), Mumbai (the learned assessing officer) for assessment year 2011-12 against the appellate order passed by the Commissioner (Appeals)-56, Mumbai [the learned CIT(A)] dated 31-1-2018. By this order the appeal filed by the assessee against the assessment order passed by the learned assessing officer under section 143(3) read with section 144C(3) of the Income Tax Act, 1961 (the Act) dated 5-5-2015 was partly allowed.
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