American Express Services India Private Ltd. Vs DCIT (ITAT Delhi)
The assessee is aggrieved by the inclusion of the Accentia Technologies Ltd. in the final set of comparables. The plea of the assessee before us is that the said concern is engaged in diversified services which includes HRCM (using SaaS model), also is KPO and not BPO. Further it owns significant intangible assets to the extent of 67%. Another aspect pointed out was that during the year, there was extra-ordinary activity of amalgamation. The assessee also pointed out that the TPO had included the said concern on the ground that the concern was engaged in HCRM consisting of various closely related activities, but no revenue was generated from SaaS. It was also pointed out that the amalgamation did not affect the profitability of the company. The DRP had held such concern to be engaged in rendering ITeS services and thus was similar to the profile of the assessee. The Ld. AR for the assessee pointed out that the issue stands covered by the order of the Tribunal in the case of sister concern i.e. American Express (I) P. Ltd. in ITA No.1426/Del/2015, relating to Assessment Year 2010-11, vide order dated 17/07/2019. In the entirety of the submissions made by the Ld. AR for the assessee and in view of the services provided by the assessee, which are back office services, the concern Accentia Technologies Ltd. cannot be held to be comparable to the assessee on the ground of it being not functionally comparable. The said proposition is laid down in the case of sister concern (supra) vide para 28 at page 19 of the order. Another aspect to be kept in mind is the extraordinary event of amalgamation, which has occurred during the year and such concern with extraordinary event cannot be held to be comparable in the year of the amalgamation. Accordingly, we hold so. The AO/TPO is directed to exclude Accentia Technologies Ltd. from the final list of comparables.
