AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (5) TMI 1560
X X X X Extracts X X X X
X X X X Extracts X X X X
....ature of accounting services to its AEs. During the financial year 2017-18, the assessee entered into several international transactions which were considered to be at arm's length by the ld. Transfer Pricing Officer (ld. TPO) except the international transactions mentioned below:- S. No. Nature of international transactions Value in INR Adjustment proposed Method applied 1 Provision of support services 307,582,804 40,327,453 Transactional Net margin (TNMM) 2 Provision of IT enabled support services 1,024,075,535 39,510,408 3. The assessee approached DRP challenging the proposed enhancement in the income of the assessee by rejecting the economic analysis adopted by the assessee in its TP documentation relating to the afore-referred two international transactions. The assessee had also alleged that TPO had erred in modifying/adoption of filters and rejecting functionally comparable companies selected by the assessee. It was alleged that new comparable companies are either not comparable to the assessee in terms of the functions performed, assets employed and risk assumed was based on quantitative filters proposed by the ld. TPO himself. P....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... by selecting non-comparable companies as well as rejecting comparable companies selected by the Assessee, thereby contravening the provisions of Rule 10B(2) of the Income Tax Rules, 1962 ('the Rules'). 5. On facts and in law, the Ld. TPO has erred in continuing to include companies which clearly fail the related party transaction to revenue filter as applied by the Ld. TPO himself- The action of the TPO is in contravention of Rule 10B(1)(e) read with Rule 10A of the Rules as various companies have related party transactions higher than 90% of value of their revenue. Marketing support services (INR 3,95,10,408) 6. On facts and in law, the Hon'ble DRP/Ld. TPO erred in rejecting the economic analysis adopted by the Assessee in its TP Documentation, by selecting non-comparable companies as well as rejecting comparable companies selected by the Assessee, thereby contravening the provisions of Rule 10B(2) of the Rules. 7. On facts and in law, the Ld. TPO has erred in excluding Cyber Media Research & Services Ltd. on the ground that the company is making persistent losses not appreciating that- * The company has actually earned ope....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Ld. AO has erred in computing interest under section 234B of the Act for computation of tax liability. 15. On the facts and circumstances of the case and in law, the Ld. AO has erred in initiating penalty proceedings under section 270 A of the Act. The Appellant craves leave to alter, amend, or withdraw all or any of the Grounds of Appeal herein or add any further grounds as may be considered necessary and to submit such statements, documents and papers as may be considered necessary either before or during the appeal hearing. The Appellant prays for appropriate relief based on the said grounds of appeal and the facts and circumstances of the case." 7. After hearing ITA No. 2013/Del/2022 vide order dated 26.03.2025 was allowed partly. Grounds of appeal Nos. 1 to 3 were held to be general in nature, grounds of appeal Nos. 9 to 13 were not pressed and grounds of appeal Nos. 14 to 15 were held to be consequential requiring no separate discussion. 8. In MA No. 135/Del/2025 vide order dated 14.01.2026 allowed afresh adjudication of ground of appeal Nos. 6 to 8 relating to marketing support services segment. 9. Ld. Authorized Representative for the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity deriving income from government entity is a reasonable basis for the exclusion. "With respect to M/s Kitco Ltd. The Tribunal held that it was a substantial government undertaking and prominent business was from government entity.....and likewise M/s Kitco Ltd. Deriving income from government entity is a reasonable basis for their exclusion." Hon'ble Mumbai High Court in the case of Thyssen Krupp Industries India Pvt Ltd (ITA No. 2218 of 2013). 10.3 Just Dial Ltd Seeking Exclusion 1. Functionally not comparable - Operates as a Local search engine and works as a payment gateway through JD Pay app. Follows different revenue recognition policy, not comparable to Appellant: - Revenue from hosting and related service fee of software over the expected tenure of customer churn period of one and half years -Income from sale of search related services > Revenues from tenure based contracts > Revenue from lead based contracts > Activation fee from customers - Income from sale of software service > Revenue from sale of software licenses > Revenue from hosting and related services fees ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....perates a local search engine which assists general public in finding information pertaining to nearby area. Further, no segmental data is available and the company owns significant intangible assets in the form of goodwill, application development and unique phone numbers. 10.4 Info Edge (India) Ltd. Seeking Exclusion 1. Dissimilar service profile Owns several sites like Naukri.com, Jeevansaathi.com, 99Acres.com & Shiksha.com and FAR cannot be considered to be comparable (Recruitment solutions, Matrimonial websites, Placement search, Resume fast forward services). Its services includes: * Recruitment solutions * Matrimonial websites * Placement search * Resume fast forward services Refer Page B948, B949 of Volume 3 of Paper-book 2. Different risk profile subject to various risk such as operation risk, regulatory risk, strategic risks financial risks, regulatory Risks etc. Refer Page B868 of Volume 3 of Paper-book 3. Lack of segmental information - Operates in the segment of Information Technology, Recruitment solutions, Matrimonia. website and Placement search division however there is no sub-servi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ceding financial year and is not incurring losses. Calculation of operating margin: Particulars 2015-16 2016-17 2017-18 Amount INR Amount INR Amount INR Operating Revenue ('OR') 80,793,001 193,910,462 158,902,000 Operating Cost ('OC') 94,054,834 189,834,102 152,587,000 Operating Profit ('OP') (13,261,833) 4,076,360 6,315,000 OP/OC -14.10% 2.15% 4.14% Profit before tax as per annual report: FY 2015-16 FY 2016-17 FY 2017-18 PBT -15,693,625 2,827,732 2,946,000 Page ref. Page B78 of Paper- book Page B171 of Paper- book Page B202 of Paper- book Thereby, the Ld. TPO has incorrectly held that the Company is having losses in FY 2015-16 and FY 2016-17. 3. Fundamental principal of benchmarking is functional comparability not profitability 4. Loss/ profit is not the barometer of comparability under Rule 10B(2) 5. Passes all the filters applied by Ld. TPO Loss/Profit is not the barometer of comparability under Rule 10B(2) 1. Chryscapital Investment Advisors (India) Pvt. Ltd. [ITS-173-HC- 2....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3 of Paper-book 2. Functionally not comparable - Provides Online Testing and Assessment Services, advisory services, educational infrastructure services, etc. Provides consultancy services in the domain of Education and Human resource for educational institution Refer Page B655 to B660 of Volume 3 of Paper-book 3. Product company EDCIL. generates revenue from its product's i.e., Digital education system, educational procurement and educational infrastructure services. EDCIL trades in certain tangible goods and assumes significant inventory risk as well, which is not similar to the case of the Appellant. The inventory to sales% of EDCIL during the is 1.74%. Refer Page B722 & B724 of Volume 3 of Paper-book Government Company earning revenue from government companies cannot be considered comparable owing to to significant dealings with controlled entities WSP Consultants India Pvt. Ltd (ITA 935/17-DelHC) where in Hon'ble Delhi High court held that government entity deriving income from government entity is a reasonable basis for the exclusion. "With respect to M/s Kitco Ltd. The Tribunal held that it was a substant....
X X X X Extracts X X X X
X X X X Extracts X X X X
....'s Appointment online, Book Movie Tickets Online, among others. Refer Page B543 & B551 of Volume 3 of Paper-book 4. Brand Owner not comparable to captive service provider -Incurred significant expenses w.r.t. brand building activities; Mr. Amitabh Bachchan is the brand ambassador Refer Page B444, B445, B456 of Volume 3 of Paper-book 5. Economies of scale owing to giant structure - Just Dial's turnover is 25 times as that of Appellant's. Fails sales more than 200 crore filter applied by the Appellant. 6. Engaged in high-end activities/Big data analytics -Company is engaged in providing niche and high-end services like big data analytics. Refer Page B467 of Volume 3 of Paper-book 7. Different risk profile - Company is subject to various risk such as Market Risk, Operational Risk, Financial Risk, IT Risk, Reputational and other Risks etc. Refer Page B478 of Volume 3 of Paper-book In Corning Technologies India (P.) Ltd v. Ts DCIT {[2021] 132 taxmann.com 72 (Delhi -Trib.) - Just Dial held to be a search engine for multifarious activities using ed different platforms, dealing with multiple ag pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....recruitment / matrimony related services, estate services, education related services, and functionally not comparable to a marketing and sale support service provider. 2. Kobelco Cranes India Pvt. Ltd. [ITA No. 802/Del/2016] In view of above material facts especially Info Edge (India) Ltd dissimilar service profile owns several sites like Naukri.com, Jeevansaathi.com, 99Acres.com & Shiksha.com and FAR cannot be considered and is excluded. 15. India Exposition Mart Ltd. is sought to be excluded. Since, it is functionally not comparable Involved in the business of conducting exhibitions, fairs and conferences as well as providing maintenance services, which are dissimilar to the functions performed by the Appellant. Refer Page B761, B789 & B828 of Volume 3 of Paper-book 2. Extremely low employee cost (6%) as compared to the Appellant having employee cost of 40% - Companies that are engaged in services will require a minimum level of expenditure on personnel expense and expense on personnel that is extremely low may lead to the conclusion that the company is not engaged in provision of services. Refer Page B829 of Volume 3 of Paper-book ....