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2018 (4) TMI 1536 - HC - Income TaxTPA - Comparable selection criteria - functional dissimilarity - Held that - Assessee is engaged in Business Process Outsourcing BPO services (transaction services) thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Issues:
Challenge to order of Income Tax Appellate Tribunal regarding exclusion of international comparables for Assessment Year 2009-10 in Business Process Outsourcing services. Analysis: The appeal under Section 260-A of the Income Tax Act, 1961 challenges the Tribunal's order dated 11 February 2015 regarding the exclusion of international comparables for the Assessment Year 2009-10. The Respondent-Assessee is engaged in Business Process Outsourcing (BPO) services, and the Revenue questions the exclusion of specific entities as comparables by the Tribunal. The impugned order held that certain entities are not comparable to the Respondent, following a decision of its Co-ordinate Bench in a previous case. The Revenue acknowledges a previous appeal to the High Court against a similar decision, which was dismissed, upholding the Tribunal's view. Consequently, the entities listed cannot be considered comparable based on the previous judgment. The Tribunal excluded one entity, Cross-domain Solutions Limited, as a comparable, based on a decision in another case. The Revenue, however, is uncertain about appealing the said decision. Since no appeal has been filed by the Revenue against the decision regarding Cross-domain Solutions Limited, and considering the nature of services provided by this entity as Knowledge Process Outsourcing (KPO), it is agreed that this entity is not comparable to the Respondent. The High Court also refers to a previous case where Cross-domain Solutions Ltd. was found engaged in distinct activities, making it incomparable with entities providing different services. Therefore, the exclusion of this entity as a comparable is upheld based on the previous judgment. It is established between the parties that the decisions in the previous cases regarding the exclusion of entities as comparables are based on factual findings and have been upheld by the High Court. Since the issues raised are essentially factual and have been conclusively decided against the Revenue in previous judgments, no substantial question of law arises in the present case. Consequently, the High Court does not entertain the challenge to the Tribunal's order, and the appeal is dismissed.
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