Case Law Details
CIT Vs Ut Starcom Inc. (India Branch) (Delhi High Court)- When we examine the profile of the assessee company vis-à-vis Infosys Technologies Limited in the light of the judgment in CIT vs. Agnity India Technologies Pvt. Ltd. (supra), there is no comparability for benchmarking the international transactions for the reasons inter alia that Infosys Technologies Limited is a giant risk taking company whereas, on the other hand, the assessee is a captive unit of its parent company and prone to minimum/ limited risk; that the Infosys Technologies Limited is having huge significant intangibles and having huge assets leading to the exorbitant turnover; that it is not in dispute that functional profile of assessee company and CIT vs. Agnity India Technologies Pvt. Ltd. is similar; that moreover, in the SDS segment, numerous companies are available for comparability. So, in the given circumstances, we are of the considered view that Infosys Technologies Limited is not a valid comparable in this case, hence ordered to be excluded.
Full Text of the High Court Judgment / Order is as follows:-
1. The Revenue is in appeal against an order dated 23rd December 2016 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 5848/Del/2011 for the Assessment Year 2007-08.
2. The following two questions have been urged by the Revenue for consideration:
“(i) Whether the Tribunal erred in law in directing exclusion of Infosys Technologies Ltd and Kals Information Systems Ltd in respect of Software Development Segment and exclusion of Vishal Information Technology Ltd (now Coral Hub Limited) in respect of IT Enabled Services Segment though all the aforesaid companies were functionally similar under Transaction Net Margin Method?
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