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Facts
The assessee, IRDETO Technology India Private Limited, provides contract development and support services to its parent company, IRDETO Group. For AY 2021-22, the TPO made an adjustment of Rs. 1,30,25,598/- to the support service segment. The DRP directed the TPO to consider certain filters for selecting comparables, but the final assessment order included Madhya Pradesh Today Media Company as a comparable.
Held
The Tribunal found that Madhya Pradesh Today Media Company is not functionally similar to the assessee as it is engaged in the newspaper business. Therefore, the Tribunal directed the TPO to exclude this company from the list of comparables and recompute the Arm's Length Price. If the assessee's margin falls within the range after recomputation, no adjustment should be made.
Key Issues
Whether Madhya Pradesh Today Media Company is a suitable comparable for benchmarking the assessee's international transaction for Arm's Length Price computation.
Sections Cited
143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘H’: NEW DELHI
(ASSESSMENT YEAR 2021-22) IRDETO Technology India Assessment Unit, Private Limited, Income Tax Department, 171, Somdutt Chambers-II, Vs. (Ld. AO). Bhikaji Cama Place, New Delhi-110066, India PAN-AABCI3564M (Appellant) (Respondent) Assessee by Ms. Parul Girdhar, CA Department by Shri S. K. Jadhav, CIT-DR Date of Hearing 22/07/2025 Date of Pronouncement 30/07/2025 O R D E R
PER PRAKASH CHAND YADAV, JM:
The present appeal of the assessee is arising out from the order of Ld. Assessing Officer dated 25th September, 2024 having DIN No. ITBA/AST/S/143(3)/2024-25/1069101879(1) and relates to Assessment Year 2021-22.
The assessee has raised five grounds of appeal, out of which Ground No.3,4,5 are consequential and hence, does not require adjudication.
3. Ground No.1 is general in nature and, hence, not require any specific adjudication.
4. In so far as Ground No.2 and its sub-grounds are concern. The solitary issue involved is regarding the adjustment made by the TPO in respect to support service segment to the tune of Rs.1,30,25,598/-.
/Del/2022 Irdeto Technology India Private Limited vs. Assessment Unit 5. Brief facts of the case as coming out from the orders of authorities below are that the assessee is a company and engaged in providing contract development services and supports services to the related entities of the parent company namely IRDETO Group. In the impugned year, the assessee has entered into an agreement with its parent company for providing support services to the customers of parent company. In this background, the assessee filed its return of income declaring total income of Rs.4,63,89,216/. The case of the assesse was selected for scrutiny. Thereafter, for determining the ALP of the supports services rendered by assessee to its AE, a reference was made by the Assessing Officer to the TPO. Accordingly, the TPO computed the ALP and sent the order to the Ld. AO. The Assessing Officer passed draft assessment order, against which the assessee filed its objections before the DRP and the Ld. DRP vide its order dated 29th August, 2024 has directed the TPO to consider certain filters, while selecting comparable for bench marking the international transaction. Thereafter, the TPO passed the order giving effect and thus, the AO passed the final assessment order, impugned before us.
At the outset, the Ld. Counsel for the assessee appearing virtually contended that the assessee want an exclusion of only one comparable from the list of comparable selected by the TPO.
6.1 The Ld. DR relied upon the orders of authorities below and reiterated the observations of DRP.
We have heard the rival submissions and perused the material available on record. The assessee has filed synopsis before the Hon’ble Bench. The assessee only want to exclude Madhya Pradesh Today Media Company from the list of comparable. Perusal of the financials of Madhaya Pradesh Today Media Company would so that this company is engaged in business and selling of newspaper and not carrying on any business similar to the assessee. On the other hand, the nature of business conducted by the assessee altogether different, therefore, we conclude that this comparable is not functionally similar to the assessee. We direct the TPO to exclude this /Del/2022 Irdeto Technology India Private Limited vs. Assessment Unit comparable from the list of comparable and then compute the Arm’s Length price once again and if the margin of the assessee are within the range then no adjustment is called for.
In the result, the appeal of the assessee is allowed as indicated above. Order pronounced in the open court on 30/07/2025.