Sequential Technology International India Pvt Ltd Vs ACIT (Delhi High Court)
Delhi High Court held that passing of order without considering the contention of the assessee that entity that is functionally dissimilar could not be included as a comparable not justified. Accordingly, matter restored back to TPO.
Facts- The assessee has filed the present appeal u/s. 260A of the Income Tax Act, 1961 impugning an order dated 15.10.2018 passed by the learned Income Tax Appellate Tribunal in respect of the assessment year (AY) 2013-14. The assessee had filed the said appeal impugning the final assessment order dated 16.10.2017, passed by AO u/s. 143(3) of the Act r.w.s. 144C of the Act.
The controversy in the present appeal relates to inclusion of an entity named E4e Healthcare Business Services Private Limited, as a comparable entity for benchmarking the international transaction of provision of IT-enabled services.
Conclusion- Held that a bare reading of the said order indicates that none of the objections of the Assessee with regard to the inclusion of E4e Healthcare were adjudicated. However, the assessee did not agitate the matter further, because the learned TPO had determined the ALP adjustment for the AY 2012-13 as NIL. It is thus, clear that the Assessee’s contention that E4e Healthcare is functionally dissimilar to the assessee and therefore, could not be included as a comparable, has not been considered by any authority. As noted above, the orders passed by the learned DRP, the learned TPO and the learned ITAT proceeded on an assumption which are ex- facie incorrect.
