7th Floor, Building No. 9A Circle 13(1) DLF Cyber City, Sector 25A New Delhi Gurgaon Haryana PAN No: AACCN 3871 F [Appellant] [Respondent] Date of Hearing : 22.08.2019 Date of Pronouncement : 23.08.2019 Assessee by : Shri Deepak Chopra, Adv Shri Amit Srivastava, Adv Shri Ankul Goyal, Adv Revenue by : Shri Sanjay I Bara, CITDR ORDER PER N.K. BILLAIYA, AM: This appeal by the assessee is preferred against the order dated 14.02.2014 framed u/s 143(3) r.w.s 144C of the Incometax Act, 1961 [hereinafter referred to as 'the Act' for short] pertaining to assessment year 200910. 2 2. The substantive grievances of the assessee relates to the T.P. adjustment made on account of the following: i) Software Development Segment; ii) Marketing Support Services Segment; iii) Technical Support Services Segment; & iv) ITES Segment [remote network management services] 3. The representatives of both the sides were heard at length, the case records carefully perused and with the assistance of the ld. Counsel, we have considered the documentary evidences brought on record in the form of Paper Book in light of Rule 18(6) of ITAT Rules. Judicial decisions relied upon were carefully perused. BUSINESS PROFILE OF THE APPELLANT COMPANY 4. The appellant company is a company incorporated in India under the provisions of the Companies Act, 1956. For the subject assessment year under consideration, the assessee was engaged in the business of manufacturing and trading of telecommunication network equipment and provision of related services such as network design, installation and commissioning. The company also provided support services to 3 major telecom operators and IP service providers in India and to customers of its associated enterprises ("AEs"). 5. Further, the company also provided software development and certain network management support services. Further, NSN India rendered certain marketing support services to its AEs, such as, providing information on potential customers, providing assistance in marketing products of its AE. Other support services rendered by NSN India to its AEs include warranty support services. 6. During the course of assessment proceedings, the A.O referred the matter to the TPO. The TPO made the transfer pricing adjustment in relation to following international transactions entered into by the appellant vide order dated 30 January 2013: International transactions Amount (INR) Software development segment 92,51,77,900 Market support services segment 13,15,27,301 Technical support service 1,01,23,623 ITeS Segment ("Remote network 31,74,61,300 management services") Total 138,42,90,124 4 7. The AO passed the draft assessment order dated 22 March 2013. The appellant filed its objections under section 144C(2)(b) of the Act with the DRP against the transfer pricing adjustment proposed by the TPO/AO. The DRP provided certain relief (i.e. rejected certain non comparable companies selected by TPO, corrected computational errors committed by TPO and allowing the benefit of working capital adjustment) to the appellant which resulted in reduction of quantum of transfer pricing adjustment. The AO passed the final assessment order dated 14 February 2014 in conformity with the DRP directions wherein the transfer pricing adjustment was INR 129,47,16,038/. 8. Summary of the international transactions analyzed in the TP study report is as under: 5 6 7 9. We will first take up the Transfer Pricing adjustment in respect of Software Services Segment. 10. At the very outset, the ld. counsel for the assessee stated that similar comparables were used by the TPO in assessment year 200809 and the Tribunal excluded 7 comparables out of the bouquet