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Pr. Commissioner of Income Tax Versus B.C. Management Services Pvt. Ltd.

2017 (12) TMI 255 - DELHI HIGH COURT

TPA - comparable selection criteria - Held that:- Assessee provides IT abled services in infrastructure development and testing, system and performance operations management and support etc. ,thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable. - ITA 1064/2017 & CM No. 43177/2017 & ITA 1083/2017 & CM No. 43280/2017 - Dated:- 28-11-2017 - MR. S. RAVINDRA BHAT & MR. SANJEEV SACHDEVA JJ. Advocates who appeared in this case: For the Ap .....

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T with respect to foreign exchange gain and the manner of its treatment as part of Operating Income for ALP determination, is correct and is justified? 3. Whether the exclusion of the Transfer Pricing adjustment made by the TPO, added notional interest on delay in receipt of payment of Associated Enterprises (AE) was justified? 2. The Assessee company was incorporated on 12.05.2010, which provides IT enabled services i.e. Application and infrastructure development and testing, system and perform .....

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ssee preferred its objections to the Dispute Resolutions Panel (DRP); which granted partial relief in the sense of direction to delete the comparable i.e. Accentia was made. The AO then completed the assessment under Section 143(3). The Assessee preferred appeal to the ITAT. 5. The ITAT granted relief with respect to the assessee s appeals by directing the exclusion of all four comparables and rejected the Revenue s appeals. Likewise, the additions made by the AO on the ground of foreign exchang .....

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s Court had held that foreign exchange gains earned by the assessee which is in relation to trading items and emanating from international transactions, direct value derived from it cannot be treated as Non-Operating losses and gains. 8. This Court notices that Revenue seeks to rely on the Safe Harbour Rules which were notified by the Revenue authority and came into force in 2013. In these circumstances, given that the present assessment period covers AY 2011-12, the treatment cannot be in accor .....

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of delayed payment made by the AO cannot be treated as part of the income and made the subject matter of the adjustments. The question no. 2 and 3 therefore does not arise for consideration. 10. So far as question no. 1 with respect to exclusion of four comparables is concerned, we notice that E-clerx was excluded on two grounds i.e. no segmental data was available, and it was functionally different as it was providing high end/BPO services. 11. This Court further notes that E-clerx is to provi .....

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