Case Law Details
Brief of the Case
ITAT Delhi held in the case American Express (India) Private Limited vs. DCIT that even though the assessee in its TP study has included the turnover filter of less than Rs.1 crore, the assessee has given reasons for inclusion of these two companies in the list of comparables, primarily for the reason that these are not start-up companies and functional data for these companies are reliable. Also the Tribunal in the case of Techbook International Pvt. Ltd. ITA No.240 /Del/2015 order dated 06.07.2015 has held that low turnover per se cannot be reason to exclude a company from the comparable test. Hence the CIT (A) is not justified in excluding companies from the list of comparables purely on account of its low turnover. However, the issue needs to be examined by the AO/ TPO whether these companies are otherwise functionally similar to that of the assessee irrespective of having low turnover.
Facts of the Case
ITA NO.1700/Del./2010 (ASSESSEE’S APPEAL)
The assessee is a private limited company. It is a wholly owned subsidiary of America Express International Inc., USA. It is engaged in provided IT Enabled Services to its group companies i.e. transaction processing, data management, information analysis and control. For the work which assessee undertakes with its Associated Enterprises, assessee was remunerated at cost plus method.
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