Comparable Need Selection As Per Correct Market Segment: Delhi ITAT Remits Matter Following Earlier Order

Relying on Co-ordinate bench ruling in assessee's own case for AY 2004-05 wherein assessee's additional evidences were admitted and matter was remanded back to TPO for fresh adjudication, the Delhi ITAT admitted the assessee's additional evidence application qua comparables selection for AY 2005-06 and 2006-07.

The ITAT Coram comprising Shamim Yahya (Accountant Member) and Anubhav Sharma (Judicial Member) observed that “either both TPO and the assessee or the TPO only hand failed to take comparables of correct segment. Thus, there is force in the contention of the counsel for the assessee that both the assessee and TPO were mistaken on facts of the functional profile of the assessee to consider comparables engaged in 'financial and leasing services' instead of business support services”. (Para 6.10')

As per the brief facts of the case, the assessee was engaged in rendering services for marketing of credit cards and personal loans to Indian branches or foreign entity. However, in its TP Study, the assessee erroneously considered comparables engaged in financial & leasing services to benchmark the subject international transaction. The assessee highlighted that that TPO also committed the same error in these years instead of considering comparable engaged in providing marketing support services.

The Coram found that the assessee had pleaded for admission of additional evidence for benchmarking the transactions with reference to correct segment of market support services as accepted by TPO in all subsequent years, the issue being identical,

The Coram also observed that neither assessee nor Revenue could completely justify the comparable accepted by them and that the evidence was from the contemporary data of relevant AY only.

So, there was no question of assessee taking advantage of subsequent facts or something created ex post facto, added the Coram.

Therefore, relying on Co-ordinate bench ruling in assessee's own case for AY 2004-05 wherein assessee's additional evidences were admitted and matter was remanded back to TPO for fresh adjudication, the ITAT directed the TPO to accept fresh evidences and report of the assessee for purpose of Sec.92C read with Rule 10B.

Counsel for Appellant/ Taxpayer: Advocates Nageshwar Rao and Viyushti Rawat

Counsel for Respondent/ Department: Rajesh Kumar & Manu Chaurasia

Case Title: American Express Services India Ltd verses DCIT

Case Number: ITA No. 3525/Del/2014

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