Genpact Services LLC v. ADIT [ITA No. 2024/Del/2014, dt. 12-4-2016] : 2016 TaxPub(DT) 2183 (Del-Trib)

Inclusion of irrelevant comparable in TP

Facts:

Assessee was the Indian branch of the US company. During the assessment year it had offered back office BPO support by executing the collections/call centre services from such contacts to its Hungarian AE. TNMM was the applied ALP method which was found alright by the TPO who however questioned the comparable and thus brought in one comparable from the public data base called E-Clerx services Ltd. which was into support services to leading global manufacturing, retail, travel and leisure companies and their e-commerce activities and made additions. DRP upheld the addition of TPO. On appeal:

Held in favour of the assessee that the selected entity was not an apt comparable as a KPO is not comparable to a BPO thus the case was remanded to TPO to recomputed the ALP excluding the irrelevant entity.