DCIT Vs Zyme Solution Private Limited (ITAT Bangalore)
TP Adjustment Partly Set Aside: High-Turnover Giants Out, Mechanical Exclusion Disapproved – ITAT Bangalore
The Bangalore Bench of the ITAT, in DCIT vs. Zyme Solution Pvt. Ltd. along with Cross Objection by the Assessee (ITA No.1885/Bang/2024 & CO No.42/Bang/2024, AY 2013-14, order dated 19-12-2025), dealt with transfer-pricing adjustment relating to ITeS services rendered by the Assessee to its AE on a cost-plus 10% model.
The Tribunal found fault with the mechanical approach adopted by the CIT(A) in excluding certain comparables merely by relying on earlier Tribunal decisions without conducting a proper FAR (Functions–Assets–Risks) analysis. Such non-speaking exclusion, the ITAT held, is not in conformity with transfer-pricing law.
However, on merits, the Tribunal independently examined the record and held that large-scale companies such as Infosys BPO Ltd., Tech Mahindra Ltd. and Capgemini Business (India) Ltd.—having turnovers ranging from ₹500+ crores to ₹6,000+ crores, as against the Assessee’s turnover of about ₹35.60 crores—cannot be treated as valid comparables and directed their exclusion.
In respect of Harton Communications Ltd., the Tribunal noted that proper factual verification (including functional profile / income filters) was absent and therefore remanded the issue to CIT(A) for fresh adjudication. Similarly, since the Assessee’s objections to inclusion of certain comparables were not adjudicated at all, the Cross Objection was also restored to CIT(A).
Accordingly, both the Revenue’s appeal and the Assessee’s cross-objection were partly allowed for statistical purposes
FULL TEXT OF THE ORDER OF ITAT BANGALORE
