2023 (2) TMI 1118

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.... of three companies i.e. Certification Engineering International Ltd., HSCC India Ltd. and Mitcon Consultancy & Engineering Services Ltd. from the list of comparable companies for the purpose of determining Arm's Length Price of the international transactions between the assessee and its associated enterprises. 3. The assessee company incorporated on 21st April, 1994, is a wholly owned subsidiary of Bechtel Corporation USA. During the year under consideration, the assessee company was engaged in the business of export of customized electronic data to its overseas group companies. 4. Learned counsel for the Revenue states that the ITAT has erred in excluding Certification Engineering International Ltd. and HSCC India Ltd. on the ground....

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.... comparable HSCC India Ltd., the ITAT upon perusing profit and loss statement for the year under consideration, observed that the main revenue of the comparable company is of Rs.33.79 crores which has been shown in the directors report as consultancy income from designing and engineering, project management and procurement of medical equipment, drugs and pharmaceutical etc. The ITAT observed that the activity of providing consultancy cannot be held functionally similar to the activity of preparing engineering design and drawings and therefore, the company is functionally dissimilar with the assessee. 10. The ITAT further observed that HSCC India Ltd. is also a government undertaking and earns revenue from government contracts, and accord....

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....y dissimilar with the assessee company. 14. This Court, in Revenue's appeal being ITA 655/2019 in assessee's own case for the Assessment Year 2011-12, vide the order dated 19th July, 2019 confirmed the order of the ITAT in ITA No. 6779/Del./2015. 15. Further, the Karnataka High Court in the case of PCIT vs. Softbrands India Pvt. Ltd. [2018 SCC OnLine Kar 2330] has held that the issue of comparables is a question of fact and not the question of law. Further, the High Court under Section 260-A of the Act would interfere only if it finds that the reasoning given by the authorities below is perverse. The relevant portion of the said judgment is reproduced hereinbelow:- "43. The contention raised before us that in view of some dif....

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....lication of mind by the Tribunal to the relevant facts of the case and evidence before the Tribunal. 45. Otherwise if the High Court takes the path of making such a comparative analysis and pronounces upon the questions as to which Filter is good and which comparable is really comparable case or not, it will drag the High Courts into a whirlpool of such Data analysis defeating the very purpose and purport of the provisions of Section 260-A of the Act. Therefore what we observed above appears to us to be the sustainable view that the key to the lock for entering into the jurisdiction of High Court under Section 260-A of the Act is the existence of a substantial question of law involved in the matter. The key of exfacie perversity of....