SYNCHRONY INTERNATIONAL SERVICES PRIVATE LIMITED,HYDERABAD vs. ACIT, CIRCLE -3(2), HYDERABAD

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ DB-A ‘ Bench, Hyderabad �ी रिवश सूद,�ाियक सद� एवं �ी मधुसूदन साविड़या लेखा सद� सम� | Before Shri Ravish Sood, Judicial Member A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA Nos.2071 to 2073 /Hyd/2025 (िनधा�रण वष�/Assessment Years: 2016-17 to 2018-19) Synchrony International Vs. Assistant Commissioner Services Private Limited of Income Tax Hyderabad Circle 3 (2) PAN: AADCR9682D Hyderabad (Appellant) (Respondent) िनधा��रती �ारा/Assessee by: Shri Aliasgar Rampurwala, CA राज� व �ारा/Revenue by:: Shri AVES Madhukar, Sr. AR सुनवाई की तारीख/Date of hearing: 16/03/2026 घोषणा की तारीख/Pronouncement: 30/03/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.:

These 3 appeals are filed by Synchrony International Services Private Limited (“assessee”) feeling aggrieved by the separate orders of the Learned Commissioner of Income Tax (Appeals)-10, Hyderabad (“Ld. CIT (A)”), all dated 20.09.2025 and 18.09.2025. Since identical issues are raised by the assessee in all these three appeals, for the sake of convenience, these were heard together and are being disposed of by this common consolidated order. ITA No. 2071/Hyd/2025 For A.Y. 2016-17 2. The assessee has raised the following grounds of appeal:

4 The case of the assessee was selected for scrutiny through CASS and accordingly notice under section 143(2) of the Income Tax Act, 1961 (“the Act”) was issued by the Learned Assessing Officer (“Ld. AO”) to the assessee. Since the assessee had entered into international transactions with AEs during the year under consideration, a reference was made by the Ld. AO to the Learned Transfer Pricing Officer (“Ld. TPO”) for determination of the arm’s length price of such transactions. The Ld. TPO, vide order passed under section 92CA(3) of the Act dated 30.10.2019, proposed a transfer pricing adjustment of Rs.26,24,06,156/-. Accordingly, the Ld. AO passed a draft assessment order under section 144C of the Act on 10.12.2019 proposing the transfer pricing adjustment of Rs.26,24,06,156/- and also disallowance of Rs.4,46,617/- under section 43B of the Act on account of delayed payment of provident fund. The assessee, vide letter dated 06.01.2020, submitted a no objection letter and requested for passing of the final assessment order. Accordingly, the Ld. AO passed the final assessment order under section 143(3) of the Act on 09.01.2020, determining the total income of the assessee at Rs.73,63,08,663/-. 4. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). During the appellate proceedings, the assessee submitted that it had entered into a Bilateral Advance Pricing Agreement (“BAPA”) with the Central Board of Direct Taxes and that the Assessment Year 2016–17 was also covered under the said BAPA. It was submitted that approximately 95.75% of the revenue of the assessee was from US-based AEs which were covered under the BAPA, and only about 4.25% of the revenue was from non-US based AEs which were not covered under the BAPA. The assessee further submitted that the transactions with non-US based AEs constituted a very small portion of the total turnover and that the Ld. TPO had also not applied separate benchmarking for

5 such transactions. Accordingly, the assessee relied upon the decisions of the coordinate benches of the Tribunal and requested that the margin agreed under the BAPA be applied to the transactions with non-US based AEs as well. However, the Ld. CIT(A) did not accept the contention of the assessee on the ground that the decisions relied upon by the assessee were rendered in the context of MAP resolutions and not in the context of BAPA. Accordingly, the claim of the assessee was rejected. 5. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before this Tribunal. At the outset, the Learned Authorized Representative (“Ld. AR”) submitted that the solitary issue involved in the present appeal is the rejection by the Ld. CIT(A) of the assessee’s request for application of BAPA margin to the transactions with non-US based AEs. The Ld. AR submitted that the Ld. CIT(A) rejected the claim only on the ground that the case laws relied upon by the assessee were in the context of MAP resolutions, which is not correct. The Ld. AR invited our attention to para nos. 26 to 30 of the decision of the coordinate bench of the Tribunal in the case of Texas Instruments (India) Pvt. Ltd. v. ACIT (2022) 141 Taxmann.com 159 (Bangalore – Trib.) and para nos. 25 and 26 of the decision of Delhi Benches of the Tribunal in the case of JCB India Ltd. v. ACIT (2025) 172 Taxmann.com 196 (Delhi-Trib.) and submitted that in both the cases, under identical facts, the Tribunal has allowed application of BAPA margin to transactions not covered under the agreement. Accordingly, the Ld. AR requested that necessary directions be issued to the Ld. AO to apply the BAPA margin to the transactions with non-US based AEs as well. 6. Per contra, the Learned Departmental Representative (“Ld. DR”) submitted that as per the statutory mandate, BAPA is applicable only to the transactions with AEs specifically covered in the agreement. Therefore, the margin agreed under BAPA cannot be

6 extended to transactions with other AEs not covered under the agreement. Accordingly, the Ld. DR strongly objected to the contention of the assessee. 7. We have considered the rival submissions and perused the material available on record. There is no dispute about the fact that the assessee has entered into a BAPA with the Central Board of Direct Taxes and that the Assessment Year under consideration is covered under the said BAPA. There is also no dispute about the fact that the transactions not covered under the BAPA constitute only about 4.25% of the total revenue of the assessee. In this regard, we have also gone through the para nos. 26 to 30 of the order of the coordinate bench of the Tribunal in the case of Texas Instruments (India) Pvt. Ltd. v. ACIT (Supra), which is to the following effect:

“25. On the basis of aforesaid, we are of the considered view, that facts and circumstances of the case required the learned TPO to be more objective in his approach to counter the compensation of 4 to 5% accepted in the case of assessee in the MAP proceedings for A.Y. 2013-14 or APA for A.Y. 2018-19 to 2022-23 and the treatment in A.Y. 201-11, 2011-12 and 2012-13 when no addition was made in respect of Germany entities for royalty payment of 4-5%. The MAP proceedings or APA may not have a precedent effect on different assessees but in case of same assessee they at least have far reaching persuasive value and without countering anything on the basis of facts coupled with evidence, the ends of justice require giving assessee benefit of principles of consistency, which are recognized principles for determination of income and adjudication in tax

8 matters. Reliance in this regard can be placed on the judgment of Hon'ble Supreme Court in Radhasoami Satsang (supra). However, the ld. Tax authorities seems to have artificially distinguished the transaction of assessee with Non-UK and UK AEs, to apply a different rate in case of non-UK AE. 26. As a consequence of aforesaid discussion, we are inclined to allow ground nos. 4 to 6 and the additional ground, as raised. The learned TPO is directed to accept the parameters of determination of compensation as accepted in APA and accordingly benefit the assessee in determination of ALP of disputed transaction with non- UK AE, too. Consequently, the appeal is allowed with consequences to follow the directions above.” 9. On going through the above 2 decisions of the Coordinate Bench of the Tribunal, we find that under similar facts, the Benches of the Tribunal have allowed application of BAPA margin to transactions with AEs not covered under the agreement, where the FAR profile was found to be identical and no separate benchmarking was carried out. In the present case also, it is an undisputed fact that the Ld. TPO has not carried out any separate benchmarking for the transactions with non-US based AEs and has applied a uniform approach for all the international transactions. Further, no material has been brought on record by the Revenue to demonstrate that the FAR profile of the transactions with non-US- based AEs is different from that of the transactions covered under the BAPA. In such circumstances, though the BAPA is not strictly binding in respect of transactions with AEs not covered under the agreement, the margin agreed under the BAPA, being the outcome of a detailed and accepted transfer pricing analysis between the assessee and the tax authorities, constitutes a reliable and persuasive benchmark for determination of arm’s length price. Accordingly, considering the principle of consistency and in the absence of any distinguishing feature, we find merit in the contention of the assessee. We, therefore, direct the Ld. AO / Ld. TPO to adopt the margin as agreed under the BAPA for the purpose of determining the arm’s length price of the transactions of the assessee with non-US based AEs as well.

9 10. In the result, the appeal of the assessee is allowed. ITA Nos. 2072 & 2073/Hyde/2025 For A.Ys 2017-18 & 2018-19 11. We observe that the facts and issues involved in these appeals are identical to the facts and issues involved in ITA No.2071/Hyd/2025 for the Assessment Year 2016-17 in the assessee’s own case. Therefore, our observations and findings in ITA No.2071/Hyd/2025 shall mutatis mutandis apply to these two appeals for the A.Ys 2017-18 & 2018-19 also. Accordingly, these two appeals of the assessee are also allowed. 12. In the result, these two appeals filed by the assessees are allowed. 13. To sum up, all the three appeals of the assessees are allowed. Order pronounced in the Open Court on 30th March, 2026. Sd/- Sd/- (RAVISH SOOD) (MADHUSUDAN SAWDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, dated 30th March, 2026. Vinodan/sps Copy to: S.No Addresses 1 Synchrony International Services (P) Ltd Floor 2-5, Building Parcel-3, Knowledge City, Unit 2-3 Plot No.2, Survey No.83/1, Phase-I Raidurg Village, Serilingampally Hyderabad 500081 2 Assistant Commissioner of Income Tax Circle 3(2) Signature Towers, Kondapur, Hyderabad 500084 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order VADREVU Digitally signed by VADREVU PRASADA PRASADA RAO Date: 2026.03.30 RAO 12:27:56 +05'30'