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2019 (7) TMI 1147 - HC - Income TaxTP adjustment - exclusion and inclusion of comparables for the purposes of determining the Arm s Length Price ( ALP ) of the international transactions involving the Assessee - HELD THAT - Having perused the charts, the Court finds that in respect of each of the comparables, the ITAT has given detailed reasons why the comparables should be rejected either because of failing the filter or because of functional dissimilarity. In some instances, the earlier decisions concerning this very Assessee have been followed. The Court is not persuaded that on the issue of exclusion and inclusion of comparables, particularly when the decisions of this Court on the topic including those concerning this very Assessee for AY 2010-2011 have been followed by the ITAT, the impugned order of the ITAT gives rise to a substantial question of law.
Issues:
1. Condonation of delay in re-filing the appeal. 2. Appeal by Revenue against ITAT order regarding Arm's Length Price (ALP) determination. 3. Exclusion and inclusion of comparables for international transactions. Analysis: 1. The judgment starts by addressing the delay in re-filing the appeal, which was condoned due to reasons stated in the application, and the application was disposed of. 2. The appeal was filed by the Revenue against an ITAT order concerning the determination of the Arm's Length Price (ALP) for international transactions in the Assessment Year 2011-2012. 3. The main issue raised by the Revenue was regarding the acceptance by ITAT of the Assessee's plea concerning the exclusion and inclusion of comparables for determining the ALP of international transactions. 4. The Assessee, a subsidiary of a US corporation, was engaged in providing Engineering Design Support Services (EDS), Financial Accounting Support Services (FAS), and IT Infrastructure Support Services (IT Infra) to its Associated Enterprises (AEs) during the relevant assessment year. 5. The Transfer Pricing Officer (TPO) rejected some comparables selected by the Assessee due to filters or functional dissimilarities. After a fresh search and challenge before the Dispute Resolution Panel (DRP), the final comparable set included different numbers of comparables for each segment. 6. The matter went through multiple rounds of appeals, with the ITAT eventually accepting the Assessee's case on the inclusion and exclusion of comparables, leading to the Revenue's appeal before the High Court. 7. Both parties presented detailed charts showing the TPO, DRP, and ITAT findings for each comparable, segment-wise, for the Court's perusal. 8. The Court examined the charts and found that the ITAT provided detailed reasons for rejecting comparables based on filters or functional dissimilarities, sometimes following earlier decisions concerning the same Assessee. 9. The Court concluded that the ITAT's order did not raise a substantial question of law, especially considering previous decisions involving the same Assessee for another assessment year. 10. As a result, the appeal by the Revenue was dismissed by the High Court.
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