Income Tax Appellate Tribunal – Mumbai on 21 February, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL
“K” BENCH, MUMBAI
BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND
SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER
(Assessment Year : 2007-08)
ExxonMobil Company India Pvt. Ltd.
Kalpataru Point, Plot no.107
Road no.8, Sion (East)
Mumbai 400 022 - AACE3157H
Addl. Commissioner of Income Tax
Assessee by : Shri Girish Dave a/w
Ms. Kadambari Dave
Revenue by : Shri Saurabh Deshpande a/w
Shri Jayant Kumar
Date of Hearing - 06.12.2017 Date of Order - 21.02.2018
PER SAKTIJIT DEY, J.M.
Captioned appeal by the assessee is against the order passed under section 143(3) r/w section 144C(13) of the Income-tax Act, 1961 (for short “the Act”) for the assessment year 2007-08, in pursuance to the directions of the Dispute Resolution Panel (DRP).
2. In ground no.2 with its sub-grounds, the assessee has raised number of issues relating to transfer pricing adjustment made by the ExxonMobil Company India Pvt. Ltd.
Transfer Pricing Officer and sustained by the DRP. However, at the time of hearing, learned counsel for the assessee, Shri Girish Dave, has restricted his argument to the following issues:-
(i) Rejection of comparables under technical services segment;
(ii) Selection / rejection of comparables in back office support service segment; and
(iii) Benefit of working capital and risk adjustment.
3. Brief facts are, the assessee an Indian company is a subsidiary of ExxonMobil Corporation Group of USA. The assessee is basically involved in providing services of information dissemination, maintaining customer relationship and market development to its overseas Associated Enterprise (A.E) ExxonMobil Chemical Co., USA. It also provides application research and technical services as well as back office support services to its A.E. Though, as per the transfer pricing order, the assessee has entered into various international transactions with its A.E., however, in the present appeal, we are concerned with the international transaction relating to provisions of technical services and back office support services. As far as the provision of technical services to A.E. is concerned, the assessee bench marked such transaction by applying Transaction Net Margin Method (TNMM) as the most appropriate method. In the search process conducted by the assessee, ten companies stated to be functionallyExxonMobil Company India Pvt. Ltd. similar to the assessee were selected as comparable.