Case Law Details
Inter Continental Hotels Group (India) Private Limited Vs ACIT (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, decided an appeal filed by the assessee against the final assessment order passed under Sections 143(3) read with 144C(13) of the Income-tax Act for Assessment Year 2018-19. The assessee was engaged in providing hotel management services to third-party-owned hotels in India, along with marketing support services and low-end IT-enabled accounting services to its associated enterprises. The Transfer Pricing Officer (TPO) proposed transfer pricing adjustments relating to the provision of support services and IT-enabled support services, which were partly modified after the Dispute Resolution Panel (DRP) proceedings and a subsequent rectification order. The Assessing Officer also retained a disallowance relating to delayed deposit of employees’ contributions to Provident Fund and Labour Welfare Fund.
The Tribunal noted that in its earlier order dated 26 March 2025, the appeal had been partly allowed, with general grounds disposed of, corporate tax grounds relating to PF/LWF disallowance not pressed, and consequential grounds requiring no separate discussion. Subsequently, by an order dated 14 January 2026 in the miscellaneous application, the Tribunal restored Grounds 6 to 8 concerning the marketing support services segment for fresh adjudication.
During the fresh hearing, the assessee sought exclusion of EDCIL (India) Ltd., Just Dial Ltd., Info Edge (India) Ltd., and India Exposition Mart Ltd. as comparables and sought inclusion of Cyber Media Research & Services Ltd., while not pressing inclusion of ICRA Management Consulting Services Ltd. and Netlink Solutions India Ltd.
Regarding EDCIL (India) Ltd., the assessee contended that it was a government company deriving revenue from government entities, had significant controlled transactions, performed functions such as online testing, advisory, educational infrastructure and consultancy services, generated revenue from products, and assumed inventory risk. The Tribunal accepted these submissions, holding that a government company earning revenue from government companies could not be considered comparable in view of settled legal principles and directed its exclusion.
With respect to Just Dial Ltd., the Tribunal observed that it operated a local search engine, functioned as a payment gateway through JD Pay, earned revenue from multiple software and search-related services, lacked segmental information, owned significant intangibles, incurred substantial brand-building expenditure, had a much higher turnover than the assessee, and engaged in high-end activities including big data analytics. Considering these functional differences, ownership of intangibles, absence of segmental data, and differing risk profile, the Tribunal directed its exclusion as a comparable.
The Tribunal similarly excluded Info Edge (India) Ltd. It found that the company owned and operated multiple internet-based platforms, including recruitment, matrimonial, real estate and education portals, had a different service profile and risk profile, lacked segment-wise information, possessed significant intangibles, and had substantially higher turnover than the assessee. These factors rendered it functionally dissimilar for benchmarking purposes.
India Exposition Mart Ltd. was also excluded. The Tribunal noted that the company was engaged in conducting exhibitions, fairs, conferences and maintenance services, had very low employee costs compared with the assessee, earned brand-related profits through promotional activities, and exhibited fluctuating margins. It held that these characteristics made the company functionally incomparable to the assessee.
As regards Cyber Media Research & Services Ltd., the assessee argued that it was not a persistent loss-making company and had earned profits during the relevant years. The Tribunal observed that different profit and loss statements placed on record reflected inconsistent figures, requiring verification. Since the TPO had rejected the company on the basis that it was incurring losses, the Tribunal set aside that action and restored the matter to the TPO for verification, examination and a fresh decision in accordance with law after providing the assessee a fair opportunity of hearing.
The Tribunal recorded that the assessee did not press inclusion of ICRA Management Consulting Services Ltd. and Netlink Solutions India Ltd. Grounds 6 to 8 were accepted, and the appeal filed by the assessee was allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal is preferred by the assessee against the final assessment order dated 28.06.2022 passed u/s 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the DC/ACIT, TP 1(3)(1), Delhi (hereinafter referred to as the Ld. AO).
2. The assessee is engaged in the business of providing hotel management services to hotels in India owned by third parties. The assessee offers back office support services in the nature of marketing support services (MSS) with respect to system fund, brand support, regional office support to its associated enterprises (AEs) and also provides low-end Information Technology enabled Services (ITeS) in the nature 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. Pursuant to the DRP directions, the following adjustments were incorporated in the final assessment order:-
| S. No. | International transactions | Amount of adjustment (INR) |
| 1 | Provision of IT enabled support services | 25,917,910 |
| 2 | Provision of support services | 39,510,408 |
| Total adjustment | 65,428,318 |
4. Thereafter, the assessee filed a rectification application requesting for rectification in the TPO order dated 30th July, 2021 r.w. effect giving order dated 31.05.2022 by rejecting the companies having significant related party transactions and rectified order dated 24th February, 2023 was passed wherein the revised adjustments stood as follows:-
| S. No. | International transactions | Amount of adjustment (INR) |
| 1 | Provision of IT enabled support services | 9,786,473 |
| 2 | Provision of support services | 39,510,408 |
| Total adjustment | 49,296,881 |
5. Further, a disallowance of employees contribution to PF and labour welfare fund amounting to Rs.11,19,770/- on account of delay in deposit beyond the due date was made by the CPC and the AO had taken the same while computing the income. After DRP directions, the addition has been maintained by the AO.
6. Being aggrieved the appellant/assessee, the assessee is in appeal before the Tribunal raising the following grounds:-
“The following grounds are independent of and without any prejudice to one another: General Grounds
1. On the facts and circumstances of the case and in law, the Ld. AO has erred in enhancing the income of the Appellant under section 143(3) read with section 144C(13) of the Act, for AY 2018-19 by INR 6,65,48,088.
2. On the facts and circumstances of the case and in law, the Ld. AO has erred in violating the provisions of section 144B of the Act and principles of natural justice by not providing an opportunity of being heard and failing to issue a show-cause notice for the proposed variation.
3. On facts and in law, the Ld. AO has erred in passing the order beyond the timeline given under section 144C of the Act. Thus, making the order passed by the Ld. AO bad in law and liable to be quashed.
IT enabled services (INR 2,59,17,910).
4. 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 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-
-
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- The company has actually earned operating profits in the AY 2017- 18 and AY 2018-19
- Loss/ profit cannot be the barometer of comparability under Rule 10B(2).
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8. On facts and in law, the Ld. TPO has erred in excluding ICRA Management Consulting Services Ltd. on the ground that the company is making persistent losses not appreciating that
-
-
- The company has actually earned operating profits in at least one out of three selected years and losses in other years are operating in nature
- Loss/profit cannot be the barometer of comparability under Rule 10B(2)
- The company has been accepted to be functionally comparable by the TPO himself on an year on year basis historically and the functionality of the company remains the same.
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Corporate tax grounds
9. On the facts and in law, the Id. AO and Centralized Processing Centre (‘CPC’) have erred in disallowing an amount of INR 11,19,770 under section 36(1)(va) of the Act on account of delay in deposit of employees’ contribution to Provident Fund (‘PF’) and Labour Welfare Fund (‘LWF’).
10. On the facts and in law, the Id. AO has erred in considering the income of INR 11,19,770 on the final assessment order, as per the intimation u/s 143(1) dated 19th March 2020 wherein disallowance of employee’s contribution to PF and LWF amounting to INR 11,19,770 on account of delay in deposit was made by CPC.
11. On the facts and in law, Id. AO, has erred in not complying with the directions of the Hon’ble DRP, wherein the Id. AO was directed to consider the submission of the Appellant and pass a speaking order in relation to disallowance of employee contribution to PF/LWF.
12. On the facts and in law, the Id. AO has erred in making a double disallowance of INR 262,518 out of total disallowance of INR 11,19,770, as the amount of INR 262,518 was suo-moto disallowed by the Appellant in its computation of income.
13. On the facts and in law, the Id. AO has erred in not following the favorable judicial precedents including the Delhi High Court judgment in case of CIT vs Aimil Ltd. & Ors. (321 ITR 508/188) wherein it has been held that employees’ contribution to Provident Fund will be an allowable expense if the same is deposited before the due date of filing of Income-tax return.
Other Grounds
14. On facts and in law, the 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/De1/2022 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/De1/2025 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 appellant/assessee synopsis of argument consisting of 1 to 16 pages.
10. Ld. Authorized Representative for the appellant/assessee submitted that grounds of appeal Nos. 6 to 8 were regarding exclusion of four comparables introduced by TPO and inclusion of three comparable wrongly excluded by TPO as under:-
“1. EDCIL (India) Ltd-Seeking Exclusion
2. Just Dial Ltd-Seeking Exclusion
3. Info Edge (India) Ltd.-Seeking Exclusion
4. India Exposition Mart ltd.- Seeking Exclusion
5. Cyber Media Research & Services Ltd.- Seeking Inclusion
6. ICRA Management Consulting Services Ltd.- Seeking Inclusion
7. Netlink Solutions India Ltd.- Seeking Inclusion
10.1 Ld. Authorized Representative for appellant/assessee submitted that appellant/assessee does not press inclusion of ICRA Management Consulting Services Ltd. and Netlink Solutions India Ltd.
10.2 EDCIL (India) Ltd. Seeking Exclusion
1. Government Company earning revenue from government companies cannot be considered comparable owing to significant dealings with controlled entities 100% government owned. It derives its entire revenue from government companies/organization/bodies which should be considered as controlled transaction, hence its profitability is not comparable as per Rule 10B(2).
Refer Page B682 to B696 of Volume 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
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 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
> Revenue from software subscription license
Refer Page B506, B540, B549, B557 of Volume 3 of Paper-book
Despite diversified functions by Just Dial, it does not have segmental information w.r.t above services.
Refer Page B547 of Volume 3 of Paper-book
2. Product company Earns revenue from sale of software licenses. It is also involved in product development innovation. Some of its product offerings are JD pay, JD Ratings, JD Social. Infact, the Ld. TPO himself has highlighted the same.
Refer Page B540 & B472 of Volume 3 of Paper-book
3. Owns intangibles & Product Company not comparable to ITeS provider – Owns intangibles in form of unique telephone numbers, application software, and application development. The Company has made huge investments in technology. It has launched an array of Search Plus services like Order Food Online, Order Wine Online, Book a Doctor’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
Reliance was placed on following judgements:-
i. In Corning Technologies India (P.) Ltd v. Ts DCIT {[2021] 132 com 72 (Delhi -Trib) – Just Dial held to be a search engine for multifarious activities using different platforms, dealing with multiple products and not comparable to a captive marketing service provider.
ii. In Nokia India (P.) Ltd v. ALIT {[2022] 136 com 85 (Delhi – Trib)} – Just Dial held to be functionally different i.e., operates 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-services break up/information provided in the annual report
4. Fails turnover range filter – Info Edge’s turnover is 30 times as that of Appellant. Fails sales more than 200 crore filter applied by the Appellant.
5. Earns Fluctuating margins – Huge hike in the revenue and corresponding expenditure which resulted in a significant increase in NCP to —44% from 24%.
6. Presence of significant amount of intangibles – Appellant does not own any intangible property.
Refer Page B944, B956 of Volume 3 of Paper-book
Reliance was placed on following cases:-
1. Mentor Graphics (Sale & Service) Pvt Ltd [T51021-ITAT-2019(DEL)-TP] — Info Edge held to be engaged in providing Internet based services through web portal for different services i.e., 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/De1/2016]
10.5 India Exposition Mart Ltd. Seeking Exclusion
1. 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
3. Brand Profits – Engaged in promotional activities
Refer Page B762 of Volume 3 of Paper-book
4. Earns Fluctuating margins – Huge gap in the revenue and corresponding margins resulted in —33% from 19%.
10.6 Cyber Media Research & Services Ltd Seeking Inclusion
1. Cosmic Global has been accepted as comparable by Ld. TPO under the ITeS segment – having profits in 2 out of 3 AYs.
Refer Page 25 of the appeal set
2. Not a persistent loss-making company – Cyber Media has earned sufficient profits in the current fmancial year as well as preceding financial year and is not incurring losses.
Calculation of operating margin:
| Particulars | 2015-16Amount INR | 2016-17Amount INR | 2017-18Amount 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
| Particulars | 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-2015 (DEL)-TP] —Held that the mere fact that an entity makes high/extremely high profits/losses does not, ipso facto, lead to its exclusion from the list of comparables for the purposes of determination of ALP.
2. Nokia Siemens Network India P Ltd. [TS-733-HC-2019(DEL)-TP] Case law on persistent loss making
1. Goldman Sachs (India) Securities (P.) Ltd. IT Appeal Nos. 2222 (HC BOMBAY) of 2013
Para 4.” The Revenue on the other hand contended that Capital Trust comparable for the purpose of determining the ALP. The Tribunal by the impugned order held on a finding of fact that for the Assessment Year 2005-06-Capital Trust Ltd. has made a profit although it made a loss for the subsequent two years namely Assessment Year 2006-07 and 2007-08. However, the impugned order of the Tribunal inter alia relies upon its order in the case of Brigade Global v/s. ITO, ITA No. 1494/Hyd/2010 rendered by the coordinate Bench at Hyderabad-wherein it is held that only persistently loss making unit cannot be said as comparable. In this case, the impugned order holds on facts that Capital Trust Ltd. it is not a persistent loss making unit.
Therefore, Capital Trust Ltd. is comparable; and (c) The view taken by the impugned order of the Tribunal is in the present fact is possible view. Thus question (a) does not give rise to any substantial question of law. Hence, not entertained.”
11. Ld. Departmental Representative submitted that ld. TPO and DRP had included EDCIL (India) Ltd., Just Dial Ltd., Info Edge (India) Ltd. and India Exposition Mart Ltd. Being similar profile, the comparables sought to be included were not accepted as the companies were incurring loss.
12. From examination of record, in light of aforesaid contentions, it is crystal clear that the appellant is seeking exclusion of EDCIL (India) Ltd.
EDCIL (India) Ltd. Seeking Exclusion
1. Government Company earning revenue from government companies cannot be considered comparable owing to significant dealings with controlled entities 100% government owned. It derives its entire revenue from government companies/organization/bodies which should be considered as controlled transaction, hence its profitability is not comparable as per Rule 10B(2).
Refer Page B682 to B696 of Volume 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 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).
In view of the glaring fact that EDCIL (India) Ltd is a Government company earning revenue from Government companies cannot be considered comparable owing to dealings with control entities as per well settled principle of law in case of WSP Consultants India Pvt. Ltd. (ITA 935/17-Del HC) (supra). Therefore, EDCIL (India) Ltd is liable to be excluded
13. Just Dial Ltd Seeking Exclusion Just Dial Ltd is sought to be excluded by the assessee because it is 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
> Revenue from software subscription license
Refer Page B506, B540, B549, B557 of Volume 3 of Paper-book
Despite diversified functions by Just Dial, it does not have segmental information w.r.t above services.
Refer Page B547 of Volume 3 of Paper-book
2. Product company Earns revenue from sale of software licenses. It is also involved in product development innovation. Some of its product offerings are JD pay, JD Ratings, JD Social. Infact, the Ld. TPO himself has highlighted the same.
Refer Page B540 & B472 of Volume 3 of Paper-book
3. Owns intangibles & Product Company not comparable to ITeS provider – Owns intangibles in form of unique telephone numbers, application software, and application development. The Company has made huge investments in technology. It has launched an array of Search Plus services like Order Food Online, Order Wine Online, Book a Doctor’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 products and not comparable to a captive marketing service provider.
Nokia India (P.) Ltd v. ACIT {[2022] 136 taxmann.com 85 (Delhi – Trib.)} – Just Dial held to be functionally different i.e., operates 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.
In view of above material facts especially Just Dial Ltd operating as a local search engine and works as a payment gateway through JD Pay app as difference functions and reasonable to be excluded.
14. Info Edge (India) Ltd. is sought to be excluded for 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-services break up/information provided in the annual report
Refer Page B966 of Volume 3 of Paper-book
4. Fails turnover range filter – Info Edge’s turnover is 30 times as that of Appellant. Fails sales more than 200 crore filter applied by the Appellant.
5. Earns Fluctuating margins – Huge hike in the revenue and corresponding expenditure which resulted in a significant increase in NCP to —44% from 24%.
6. Presence of significant amount of intangibles – Appellant does not own any intangible property.
Refer Page B944, B956 of Volume 3 of Paper-book
1. Mentor Graphics (Sale & Service) Pvt Ltd [TS1021-ITAT-2019(DEL)-TP] — Info Edge held to be engaged in providing Internet based services through web portal for different services i.e., 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/De1/2016]
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
3. Brand Profits – Engaged in promotional activities Refer Page B762 of Volume 3 of Paper-book
4. Earns Fluctuating margins – Huge gap in the revenue and corresponding margins resulted in —33% from 19%.
Therefore, it is reasonable to exclude India Exposition Mart Ltd. as comparable.
16. The appellant/assessee is seeking inclusion of Cyber Media Research & Services Ltd. as comparable. The appellant/assessee has submitted two different account statements of profit & loss which are at page Nos. B-171 and B-202. The statement of profit and loss for financial year from 01.04.2016 to 31.03.2017 page No. B-171, shows profit of Rs. 28.27 lacs. The statement of profit and loss for fmancial year ending on 31.03.2017 page No. B 202 shows losses of Rs. 41.51 lacs. The above said statements require verification and examination. The profit and loss accounts were filed before the Departmental Authorities which show that Cyber Media Research & Services Ltd. earned sufficient profits in current Financial Year as well as preceding Financial Years and is not incurring loss. Ld. TPO has incorrectly held the company as having losses. Therefore, the action of Ld. TPO in rejecting Cyber Media Research & Services Ltd. being illegal is set aside and the matter is restored to file Ld. TPO for verification, examination and decision afresh in accordance with law after affording fair opportunity of hearing to appellant/assessee.
17. The appellant/assessee has not pressed inclusion of ICRA Management Consulting Services Ltd and Netlink Solutions India Ltd. Accordingly, Grounds of appeal Nos. 6 to 8 are accepted.
18. In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 22.05.2026
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