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The present appeal has been preferred by the assessee against the order dated 08.08.2011 of the Dispute Resolution Panel (hereinafter referred to as the DRP) relevant to assessment year 2007-08.

2. The brief facts of the case are that the assessee namely 'Capgemini Business Services (India) Limited' [Formerly known as 'Unilever India Shared Services Limited'] (hereinafter referred to as the assessee or assessee company) for a part of A.Y 2007-08 was a subsidiary of Hindustan Unilever Limited (HUL), which is in turn a subsidiary of Unilever Plc. CBSIL, has its registered office in Mumbai and corporate office in Bangalore. Cape Gemini SA., France acquired 51% shareholding in CBSIL from HUL on 11 October 2006 (during the relevant AY 2007-08). Pursuant to the acquisition, the name M/s. Capgemini Business Services (India) Ltd.

of the company has been changed from 'Unilever India Shared Services Limited' to 'Capgemini Business Services (India) Limited' with effect from 14 May 2007. During A.Y 2007-08, the assessee had primarily provided business process management services in the areas of finance accounts, operational control assessment, administration of foreign exchange, one off consultancy projects and competitors' intellectual study to Unilever group companies. The services rendered by the assessee have been in the nature of 'Information Technology Enabled Services' (ITES) / 'Back Office Support Services'. Considering that the Unilever Group had an indirect equity stake in excess of 26% in the assessee for the period from 1 April 2006 to 11 October 2006, the transactions between the assessee and Unilever group entities came under the purview of 'Indian Transfer Pricing (TP) Regulations'. The assessee had selected the Transactional Net Margin Method (TNMM) as the most appropriate method to determine the arm's length price for the provision of ITES to group entities and had selected comparable companies rendering ITES for determination of arm's length price. Based on the analysis carried out by the assessee, the international transactions were determined as meeting with the arm's length price. The assessee's case was referred to the Transfer Pricing Officer (TPO) for AY 2007-08. The TPO proposed an adjustment to the transfer prices with respect to the provision of ITES to the tune of Rs.33,070,534/-. The Assessing Officer (hereinafter referred to as the AO) relied on the TPOs Order and issued a draft assessment order under Section 144C(1) of the Act proposing the above TP adjustment. The assessee filed objections against the draft assessment order before the DRP. However, the DRP rejected the assessee's objections not only in relation to transfer pricing adjustments but also in relation to disallowances proposed by the AO in relation to club entrance fee, credit of 'branch profit tax' paid by the assessee in USA and the expenditure incurred towards purchase of 'software'. Being aggrieved by the order of the Ld. DRP, the assessee has come in appeal before us with the following grounds of appeal:

M/s. Capgemini Business Services (India) Ltd.

"Ground No.1 - Transfer Pricing ('TP') adjustment of Rs.3,30,70,534 On the facts, in law and in the circumstances of the present case, the learned Additional Commissioner of Income-tax 1(2) (hereinafter referred as 'AO') and the Dispute Resolution Panel ('DRP') erred in concluding the assessment by upholding the action of the Additional Commissioner of Income-tax Transfer Pricing Officer

- 1(2) (hereinafter referred as 'TPO') in determining the arm's length price of the international transaction of business process management services rendered to Associated Enterprises ('AEs') at Rs. 50,99,80,530 instead of Rs.47,69,09,996 as determined by Capgemini Business Services (India) Limited ('the Appellant') by:

a. considering the Appellant's transactions with overseas Unilever group entities, post transfer of the Appellant's shareholding to Capgemini Group from Unilever Group on 11 October 2006, as international transaction, having failed to appreciate that Unilever Plc's shareholding (indirect) in Appellant post 11 October 2006 fell below the 26% limit under Section 92A(2)(a) of the Act for the purpose of constituting AE;