Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2018 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (2) TMI 2012 - DELHI HIGH COURTTP Adjustment - Comparable selection - order of ITAT with the inclusion of three comparables i.e TCS E-serve Ltd., Infosys BPO Ltd. and Excel Infoways Ltd. for the purpose of carrying out the Arms Length Price (ALP determination) mandated by Section 92CA of the Income Tax Act - assessee is engaged in information technology enabling services - HELD THAT:- So far as the exclusion of Infosys and inclusion of R Systems is concerned, this Court is of the opinion that no question of law arises. With respect to Infosys BPO, the rationale for exclusion by the ITAT is that the profitability of the concern is attributed to its brand value. Relevance of brand value was recognised by this Court in several orders. The Court is of the opinion that no question of law arises on this aspect; the ITAT also returned its finding that functionality of the assessee is similar to Infosys BPO. Likewise with respect to inclusion of R Systems the Court finds no infirmity in the approach and finding of the ITAT. The ground urged by the Revenue is that the data relating to the concern was not in respect of the relevant financial year as it followed the calendar year for reporting its profits and all other finances. This Court had in a like situation (Commissioner of Income Tax-II vs. Mckinsey Knowledge Centre Pvt. Ltd. [2015 (3) TMI 1226 - DELHI HIGH COURT] held that if from the available data on record, the results for financial year can reasonably be extrapolated then the comparable cannot be excluded. Following that logic, it is held that the reasonableness of inclusion of R Systems cannot be questioned. This Court is of the opinion that the following two questions of law arise: (i) Did the Income Tax Appellate Tribunal (ITAT) fall into error in its findings with respect to inclusion of M/s. Surya Pharmaceutical Ltd., given the assessee’s contention with respect to unavailability of segmented data for the purpose of transfer pricing analysis, in the circumstances of the case? (ii) Did the ITAT fell into error in directing the exclusion of M/s. Excel Infosys, having regard to the judgment of this Court in Chryscapital Investment Advisors (India) Pvt.Ltd vs. Deputy Commissioner of Income Tax, [2015 (4) TMI 949 - DELHI HIGH COURT]
|