PCIT Vs Esys Information Technologies Ltd (Delhi High Court)
Delhi High Court held that appeal filed by the revenue is liable to be dismissed in absence of any substantial question of law. Thus, appeal is, accordingly, dismissed.
Facts- The assessee is a subsidiary of eSys Technologies Pvt. Ltd, Singapore (ESYS Singapore) and is engaged in the business of manufacturing and trading of computer hardware and peripherals and distribution of mobiles. Notably, the assessee had purchased computer hardware components and peripherals from its associated enterprise (AE) for a value of ₹4,13,31,00,539/-. The assessee had also exported certain houseware products for a value of ₹1,47,65,697/- as well as computer hardware components for a value of ₹1,79,00,172/-. Additionally, the assessee had also entered into transaction for IT support services for a value of ₹1,61,29,274/- in respect of purchase of computer hardware components. AO made a reference to the TPO for determining/verifying the ALP.
TPO did not accept RPM as the most appropriate method to benchmark the international transaction and proposed TNMM as the most appropriate method for benchmarking those transactions. The TPO also selected operating profit/sales as the PLI. The operating profit being the gross profit less selling, administrative and financial expenses. The TPO calculated the assessee’s PLI at 0.479% and on the said basis made an upward ALP adjustment of ₹14,29,21,585/-.
