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Dcit 15(2)(1), Mumbai vs Nomura Structured Finance Services ... on 3 March, 2022 cites

Dcit, New Delhi vs M/S. Chryscapital Investment Advisors ... on 19 September, 2017

14. By way of additional ground of appeal, the Revenue has sought exclusion of M/s CG VAK Software & Exports Ltd. on the basis that its turnover is less than Rs. 1 Crore and thus is much less than the assessee‟s turnover. From the entire order passed by the TPO, it is evident that the functional similarity of relevant segment of M/s CG VAK Software & Exports Ltd. with the assessee has not been doubted. The Revenue now seeks exclusion of the comparable on quantitative basis. While reckoning the comparability analysis under TNMM, the main emphasis is on net margin 7 M/s. Nomura Structured Finance Services Private Limited ITA No. 1711/Mum./2015 and C.O. No. 69/Mum./2015 realized on the transactions undertaken and not the price of the product or services. The transfer pricing rules under Rule 10B and Rule 10C also contemplate for eliminating the material effects and to make reasonably accurate adjustment for eliminating the differences on account of such material effects. Mere circumstance of a company, which otherwise confirm to the comparability analysis in terms of Rule 10B(2) and (3), having huge profit or huge turnover ipso facto does not lead to its exclusion unless and of course it is shown that turnover or huge profit is on account of factor leading to a different results in function, asset and risk analysis. We find that Hon‟ble Delhi High Court in Chrys Capital Investment Advisors India Pvt. Ltd. Vs. DCIT: [2015] 376 ITR 183 held that if the company is functionally comparable then same cannot be rejected on the basis of turnover. Thus, respectfully following the ratio laid down by the Hon‟ble Delhi High Court, we hold that M/s CG VAK Software & Exports Ltd. cannot be held to be incomparable simply on the ground of low turnover, unless it is demonstrated that the functions, assets and risk are completely different and are incomparable. Accordingly, the additional grounds raised by the Revenue are dismissed.
Income Tax Appellate Tribunal - Delhi Cites 9 - Cited by 89 - Full Document
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