Case Law Details
Brief of the Case
ITAT Delhi held In the case of Xchanging Technology Services India Private Limited. vs, DCIT that the Hon’ble High Court affirmed the conclusion that a captive unit of a comparable company which assumed only a limited risk cannot be compared with a giant company in the area of development of software who assumes all types of risks leading to higher profits. The facts of the appellant are akin and the comparative chart of assessee vis –a-vis M/s Infosys clearly depicts the same and therefore, do not warrant any different conclusion. The appellant is also captive service provider to its AE and as such, M/s. Infosys Ltd. is not a valid comparable with the appellant and we direct it’s exclusion from the comparables.
Facts of the Case
Xchanging Technology Services India Private Limited ( Xchanging India) is a subsidiary of Xchanging Resourcing Services Limited, UK and engaged in the business of rendering contract software development as well as Information Technology Enabled Services (ITES) to Xchanging Group companies. The assessee is registered as a 100% export oriented unit under the Software Technology Parks of India (STPI) scheme. The assessee operates in two segments i.e. software development segment and ITES segment.
The assessee’s case was referred to the TPO for determination of the Arm’s Length Price (ALP) for the international transactions entered into by the assessee during the financial year 2009-10. Subsequently, the TPO passed an order dated 16.01.2014 making certain adjustment to the ALP of the international transactions of the assessee.
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