IQVIA Analytics Services Pvt. Ltd. Vs ITO (ITAT Bangalore)
ITAT Bangalore held that notional cost on account of tangible/intangible and ESOP while computing PLI not justified since no such adjustment made by lower authorities in earlier years. Hence, adjustment directed to be deleted by applying principles of consistency.
Facts- The assessee is an Indian company and engaged in the business of sales & marketing analytics and business consulting services to the pharmaceutical & healthcare industry. The assessee company has two subsidiaries namely Pharma ARC Inc (USA) and Pharma ARC Consulting Services Gmbh (Switzerland). The company during the year has entered various international transactions with its AEs including the provision of IteS Services. The assessee to benchmark such international transaction (provision of ITES services) has adopted the TNMM method as most appropriate method to compute the ALP. The assessee by applying the TNMM method computed its PLI as OP/OC which comes 14.79% and based on TP study claims that the transaction of provision of ITES services is at ALP.
The TPO, however, was not satisfied with the process of computation of PLI made by the Assessee. Accordingly, the TPO has treated the expenses incurred by the foreign AE as part of the operating expenses. TPO worked the PLI of the assessee at 3.68% and 3.55% as OP/OC and OP/OR respectively. Being aggrieved, the present appeal is filed.
