S.V. Mehrotra, Accountant Member - This appeal filed by the assessee is directed against the order of AO dated 10/10/2011 for AY 2007-08 passed in terms of directions of Dispute Resolution Panel (DRP) u/s 144C(5) dated 02/08/2010.

2. The assessee company was incorporated in the year 1999 as a joint venture between American Express International Inc. and Tata Group. However, in the year 2002, American Express International Inc. became the holding company by acquiring stake from Tata Group. Presently 99.99% of share capital of the company is owned by American Express International Inc. and remaining .01% is owned by Tata Group. The assessee company is providing following services: -

(1) Distribution of AEE charge, credit cards and other cards.

(2) Distribution of AEB personal loans and other retail lending products.

(3) Support for marketing and promotion of products, scheme etc. of AEB.

3. The assessee had filed its return of income declaring loss of Rs. 6,62,96,780/-. The AO noticed that assessee had undertaken International transactions with its associated enterprise to the tune of Rs. 7,03,224/-. Therefore, in accordance with the provisions of section 92CA of the Income Tax Act, the International transaction entered into by the assessee with the associate enterprise was referred to the Transfer Pricing Officer (in short "TPO") for determining the arm's length price. The TPO passed the order u/s 92CA(3) on 7th October, 2010 making an upward adjustment of Rs. 3,42,63,209/- to the income of the assessee, being the difference between arms length price and the price charged by the assessee. The AO passed the draft assessment order after considering the assessee's submissions and made the addition of Rs. 3,42,63,209/- to the income of the assessee. The assessee filed objections before Dispute Resolution Panel (in short "DRP") and the DRP issued directions u/s 144C(5) on 2nd August, 2011 confirming the TPO's action.

4. Being aggrieved, the assessee is in appeal before us and has taken following grounds of appeal on this issue: -

1. 'The order passed by the Additional Director of Income Tax, Transfer Pricisng-1(1) ("Learned TPO"), draft assessment order passed by Deputy Commissioner of Income Tax, Circle 1(1), New Delhi ("the Learned AO") and the final assessment order passed by the ld. AO on the directions of the Hon'ble Dispute Resolution Panel ("Hon'ble DRP"), are bad in law and void ab initio.

2. That on facts and in law, the ld. AO has erred in determining the total income of the Appellant at Rs. 109,122,855 as against NIL returned income.

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3. That on facts and in law, the ld. AO has erred in assuming jurisdiction to refer and in making the reference to the ld. TPO despite the absence of requisite preconditions being met in law.

4. That on facts and in law, the ld. TPO has erred in not discharging the statutory onus to establish that the Appellant's case is covered under any of (a) to (d) clause of section 92C(3) of the Income Tax Act, 1961 ("the Act").

5. That on facts and in law, the Hon'ble DRP has erred in confirming and accordingly, the ld. TPO/AO have erred in making/upholding an upward adjustment of Rs. 34,263,209/- in respect of the international transaction pertaining to marketing services in respect of credit cards and personal loans in the order of assessment.

5.1 That on facts and in law, the Hon'ble DRP has erred in confirming and accordingly, the ld. TPO/AO have erred in rejecting the economic analysis undertaken by the Appellant and conducting a fresh search for identifying the comparable companies to the Appellant.

5.2 That on facts and in law, the Hon'ble DRP has erred in confirming and accordingly, the ld. TPO/AO have erred in rejecting the Appellant's claim for use of multiple year data for computing the arm's length price and, instead used single year data of companies to conclude the arm's length price of the international transaction.

5.3 That on facts and in law, the Hon'ble DRP has erred in confirming and