SC: Under Order XXI Rule 102 CPC, A Transferee Pendente Lite Cannot Obstruct Execution of a Decree  ||  SC: RTE Act promotes fraternity and equality by children of judges and vendors studying together  ||  MP High Court: Aadhaar and Voter ID Cards are Not Definitive Proof of Date of Birth  ||  Chhattisgarh HC: Second Marriage During Subsisting First Marriage Void Unless Custom Permits It  ||  Allahabad HC: Will in Favor of Someone Does Not Affect Compassionate Appointment Based on Dependency  ||  MP High Court: Mere Illness of a Family Member, If Improving, is Not Sufficient for Interim Bail  ||  Bombay HC: ?25K Fine for Flying Kites With Nylon Manjha; Parents Must Ensure Responsible Conduct  ||  Delhi High Court: Home State Must be the First Preference For Claiming Insider IFS Cadre Allocation  ||  SC: Hindu Daughter-In-Law Widowed After Her Father-In-Law’s Death is Entitled to Maintenance  ||  SC: Vendor Remains a Necessary Party in Specific Performance Suits Even After Transferring Property    

Pr. Commissioner Of Income Tax vs. Bechtel India Pvt. Ltd. - (High Court of Delhi) (09 Nov 2022)

High Court under Section 260-A of the IT Act would interfere only if it finds that the reasoning given by the authorities below is perverse

MANU/DE/4440/2022

Direct Taxation

Present Income Tax Appeal has been filed challenging the order passed by the Income Tax Appellate Tribunal ('ITAT'). The issue urged by the Revenue concerns the exclusion of three companies i.e. Certification Engineering International Ltd., HSCC India Ltd. and Mitcon Consultancy and 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.

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.

Learned counsel for the Revenue states that, the ITAT has erred in excluding Certification Engineering International Ltd. and HSCC India Ltd. on the ground that the same are government undertakings without considering that being a government undertaking does not ipso facto lead to enhanced profitability of a company. The ITAT has erred in excluding Mitcon Consultancy & Engineering Services Ltd. from the final list of comparables on the ground of functional dissimilarity without considering that TNMM is less sensitive to minor differences in functional profile and the assessee company and this company are broadly functionally similar.

The Karnataka High Court in the case of PCIT vs. Softbrands India Pvt. Ltd. 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 Income Tax Act, 1961 (IT Act) would interfere only if it finds that the reasoning given by the authorities below is perverse.

Consequently, the ITAT excluded Certification Engineering International Ltd. and HSCC India Ltd. not only on the ground that these companies were government undertaking, but also on ground of functional dissimilarities with the assessee company. The ITAT excluded the Mitcon Consultancy & Engineering Services Ltd. on the ground of functional dissimilarity with the assessee company as well on the ground that the same comparable was excluded by ITAT in assessee's own case for the Assessment Year 2011-12. Accordingly, no substantial question of law arises for consideration in the present appeal. Appeal dismissed.

Tags : COMPARABLE   COMPANIES   EXCLUSION  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved