INCOME TAX ACT, 1961

Section 92C

Transfer pricing - Computation of arm's length price - Selection of comparables -

Assessee rendered information technology enabled services (ITES) to its AE abroad. Issue arose under consideration as to whether Tribunal fell into error in excluding M/s Infosys BPO Ltd. from the list of comparables which had been taken into account by AO in the facts of this case Held: Assessee had placed before the Court a detailed chart which showed dissimilarities between Infosys BPO and assessee on several counts. Infosys provides business process management services to organizations over a wide range of industries, whereas assessee was a routine captive service provider. Mainly assessee provides IT services only to its US based AEs, whereas Infosys is among top 10 third party BPO companies in India. Even the risk profile was different while Infosys BPO is a full-fledged risk taking enterprise, assessee undertakes minimal risks of 100% services provided to its AEs. The Court held that Infosys BPO Ltd. could not be a suitable comparable.

REFERRED : Pr. CIT v. Symphony Marketing Solutions India Pvt. Ltd. [ITA 717/2018, dt. 23-7-2018] Pr. CIT v. Symphony Marketing Solutions India Pvt. Ltd. [ITA 413/2018 & CM APPL. 13875/2018 With ITA 414/2018, dt. 11-4-2018] ITO v. Symphony Marketing Solutions India Pvt. Ltd. [IT(TP)A No.233/Bang/2015 (Assessment year: 2010-11) And IT(TP)A No.809/Bang/2015 (Assessment year : 2010-11), dt. 4-4-2017] : 2017 TaxPub(DT) 1339 (Bang-Trib) Business Solutions India (P.) Ltd v. Dy. CIT [IT (TP).A No.1397/Bang/2016, dt. 13-1-2017]

FAVOUR : In assessee's favour

A.Y. :

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