NEWTIMES DEVELOPMENT INDIA PRIVATE LIMITED ,GURGAON vs. DCIT CIRCLE 3(1) , GURGAON

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “H”, NEW DELHI BEFORE SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SHRI VIMAL KUMAR, JUDICIAL MEMBER ITA No. 6233/Del/2025, A.Y. 2022-23 Newtimes Development India Vs. Office of the Deputy Private Limited Commissioner of Income Plot No. 11, Sector 44, Tax, Circle 3(1), Gurgaon 122001, Gurgaon Haryana India �थायीलेखासं./जीआइआरसं./PAN/GIR No: AADCN4318A Appellant .. Respondent

Appellant by : Ms. Ananya Kapoor, Advocate Sh. Utkarsa Gupta, Advocate Respondent by : Sh. Bhopal Singh, CIT-DR Date of Hearing 03.06.2026 Date of Pronouncement 24.08.2026

O R D E R PER VIMAL KUMAR, JM:

The appeal filed by the assessee are against the final assessment orders dated 16.09.2025 passed by Ld. Assessing officer/Assessment Unit (hereinafter referred to as ‘the AO’) u/s 143(3) r.w.s 144C(13) and Section 144(B) of the

P a g e | 2 ITA No. 6233/Del/2025 Newtimes Development India Pvt. Ltd. Income Tax Act, 1961 (hereinafter referred to as “the Act”) in pursuance to directions of Dispute Resolution Penal-1, New Delhi (hereinafter referred to as ‘the DRP’) dated 05.08.2025 u/s 144C of the Act for A.Y. 2022-23.

P a g e | 3 ITA No. 6233/Del/2025 Newtimes Development India Pvt. Ltd. of the Act before the Hon’ble Dispute Resolution panel against Draft Assessment Order dated 08.02.2025. Hon’ble DRP passed order dated 05.08.2025. The order giving effect u/s 144C of the Act dated 01.09.2025 proposing adjustment of Rs. 3,47,10,288/- was passed. The final assessment order dated 16.09.2025 u/s 143(3) r.w.s. 144C(13) r.w.s. 144B proposing adjustment of Rs. 3,47,10,288/-. 3. Being aggrieved appellant/assessee preferred present appeal on following grounds: - “1.1. Ground of Appeal 1 That, in view of the facts and circumstances of the case and in law, the learned AO/learned Transfer Pricing Officer ("learned TPO") and the Hon'ble DRP have erred in increasing the returned income of the Appellant by INR 3,47,10,288 by making an upward adjustment in respect of the Assessee's international transaction pertaining to provision of sourcing support services ("impugned transaction") and holding that the impugned transaction is not at arm's length. 1.2. Ground of Appeal 2 On the facts, circumstances of the case and in law, the learned AO/ learned TPO/ Hon'ble DRP have grossly erred by not accepting the economic analysis undertaken by the Assessee in accordance with the provisions of the Act read with the Income Tax Rues, 1962 (the "Rules") and conducting a fresh economic analysis in an arbitrary manner without adopting any scientific search process for determination of the Arm's Length Price ("ALP"). 1.3. Ground of Appeal 3 On the facts, circumstances of the case and in law, the learned AO/ learned TPO have grossly erred by not giving effect to the directions of Hon'ble DRP and thereby erred on account of following:  Inclusion of two companies viz., ERM India Private Limited and Mudra Online Technologies Private Limited having related party transactions (RPT) of more than 25% of the turnover which are liable to be excluded as they fail the RPT filter; and  Not allowing working capital adjustment to the margins of comparable companies. 1.4. Ground of Appeal 4 On the facts, circumstances of the case and in law, the learned AO/ learned TPO/ Hon'ble DRP have grossly erred by accepting a comparable company namely EdCil (India) Limited which is 100% Government of owned company and is liable to be

P a g e | 4 ITA No. 6233/Del/2025 Newtimes Development India Pvt. Ltd. excluded as it does not satisfy the functional, assets and risk (FAR) analysis test as mandated in Rule 108 of the Rules. 1.5. Ground of Appeal 5 On the facts, circumstances of the case and in law, the learned AO/ learned TPO/ Hon'ble DRP have grossly erred by accepting a comparable company namely Adbur Private Limited which operates on a commission-based model vis-à-vis taxpayer which is compensated on a cost plus basis. Thus, Adbur Private Limited is liable to be excluded in view of having a different business model and does not satisfy the FAR analysis test as mandated in Rule 10B of the Rules. 1.6. Ground of Appeal 6 On the facts, circumstances of the case and in law, the learned AO/ learned TPO/ Hon'ble DRP have grossly erred in selecting several other companies which are non- comparable to the impugned transaction ie., sourcing support services rendered by the Assessee viz., Artefacts Projects Limited, Infollion Research Services Private Limited, Method Apparel Consultancy India Private Limited, ERM India Private Limited and Mudra Online Technologies Private Limited or on account of failing quantitative filters viz., ERM India Private Limited and Mudra Online Technologies Private Limited. Thus, the said comparables are liable to be excluded and do not satisfy the FAR analysis test as mandated in Rule 10B of the Rules. 1.7. Ground of Appeal 7 On the facts, circumstances of the case and in law, the learned AO/ learned TPO/ Hon'ble DRP have grossly erred in disregarding the functionally similar comparable companies viz., Crystal Hues Limited and Kestone Integrated Marketing Services Private Limited. 1.8. Ground of Appeal 8 On the facts, circumstances of the case and in law, the learned AO/learned TPO have grossly erred by failing to make appropriate adjustments to account for differences in working capital employed by the Assessee vis-à-vis comparable companies while benchmarking the impugned transaction of the Assessee. 1.9. Ground of Appeal 9 On the facts, circumstances of the case and in law, the learned AO/ learned TPO/ Hon'ble DRP have grossly erred by not making suitable adjustments to account for differences in the risk profile of the Assessee vis-à-vis the comparable companies. 1.10. Ground of Appeal 10 On the facts, circumstances of the case and in law, the learned AO/ learned TPO/ Hon'ble DRP have erred by considering foreign-exchange gain as non-operating in nature. 1.11. Ground of Appeal 11 On the facts, circumstances of the case and in law, the learned AO/ learned TPO/ Hon'ble DRP have grossly erred in disregarding the principle of consistency and making an upward adjustment. 1.12. Ground of appeal 12 On the facts and in circumstance of the case and in law, the learned AO has erred by levying an interest under Section 234B of the Act. 1.13. Ground of appeal 13

P a g e | 5 ITA No. 6233/Del/2025 Newtimes Development India Pvt. Ltd. On the facts and in circumstance of the case and in law, the Learned AO has erred by initiating penalty proceedings under section 270A of the Act, in relation to the adjustment made to the income of the Appellant.” 4. Ld. Authorized Representative for appellant/assesseee submitted that ground of appeal No. 1 and 2 are general in nature, so separate adjudication is not called for. 5. Ld. Authorized Representative for appellant/assesseee submitted that ground of appeal No. 3 is regarding inclusion of two companies i.e. ERM India Private Limited and Mudra Online Technologies Private Limited having related party transactions(RPT) of more than 25 % of turn over which are liable to be excluded as they failed to RPT filter and not allowing working capital adjustment to the margins of comparable companies. In written submissions, it is mentioned as under:

P a g e | 6 ITA No. 6233/Del/2025 Newtimes Development India Pvt. Ltd. 6. Ld. Departmental Representative relied on impugned order.

P a g e | 7 ITA No. 6233/Del/2025 Newtimes Development India Pvt. Ltd.

P a g e | 8 ITA No. 6233/Del/2025 Newtimes Development India Pvt. Ltd. 10. From examination of record in light of aforesaid rival contention, it is crystal clear that Ld. AO/TPO and DRP accepted a comparable have namely EdCIL India Limited. As per annual report EdCIL India Limited is under control of Ministry of Education, Government of India pages 1401 to 1410 and 1454 to 1457 of paper book. A co-ordinate Bench in ITA No. 1448 & 1449/Del/2022 and 5618/Del/2024 in para No. 21, it is held as under: “21. Respectfully following the DRP's reasoning in the assessee's own case in the A.Y. 2016-17, as well placing reliance on their functional and business description we hold that the EDCIL (India) Ltd being a Government undertaking should be excluded from the comparable list. Further, the ICRA Ltd which is a credit rating agency is into completely different business and cannot be said to be a functionally similar entity with the MSS segment of the assessee and hence liable to be excluded. After exclusion of these companies, the assessee's margin of 15.28% is at arm's length compared to the average PLI of remaining comparables. Therefore, no adjustment is warranted to the international transaction in respect of provision of Management Support Services.” 11. In view of above material fact that the EdCIL (India) Limited is a 100% Government owned company by respectfully following the judicial precedent, it is held that the action of accepting a comparable company namely EdCIL (India) Limited being illegal is set aside. Accordingly, the ground of appeal No. 4 is allowed. 12. Ld. Authorized Representative for appellant/assessee submitted that ground of appeal No. 5 is regarding erroneous inclusion of company as comparable namely Adbur Private Limited company has a different business model and does not

P a g e | 9 ITA No. 6233/Del/2025 Newtimes Development India Pvt. Ltd. satisfy FAR Analysis Test mandated in Rule 10B. In written submissions, it was submitted as under:

P a g e | 10 ITA No. 6233/Del/2025 Newtimes Development India Pvt. Ltd. crore and Commission of Rs.1.52 crore. It is the Commission segment which has been adopted by the TPO for inclusion in the list of comparables. As against this, the assessee company is providing marketing support services on a cost plus 5% mark-up basis. There is an apparent difference in the business model of earning Commission on sales and getting remunerated at cost plus basis. Whereas in the case of commission business, no income is earned unless the efforts made by incurring expenses fructify into orders, in the case of Cost plus basis, a company gets remunerated on all the costs incurred with a particular mark-up irrespective of any actual sales made. These two business models, namely, of commission and cost plus basis, cannot, by any standard, be brought on a same pedestal. This basic difference in the two business models results in varying profit margins and distorts comparability. In view of the fact that Priya International Ltd. is following a business model of `commission', as against the assessee rendering marketing support services on cost plus basis', we hold that the two cannot be considered as comparable.”

P a g e | 11 ITA No. 6233/Del/2025 Newtimes Development India Pvt. Ltd.

P a g e | 12 ITA No. 6233/Del/2025 Newtimes Development India Pvt. Ltd. 18. From examination of record in light of aforesaid rival contention, it is crystal clear that Ld. AO/TPO/DRP/ selected companies Artefact Project Limited and in Infollion Research Services Private Limited. Artefact Projects Limited has 100% revenue from rendering project management and consultancy services for infrastructure projects. Annual report is at page No. 1714, 1732 and 1737 Volume III. The official Website shows company is engaged in rendering engineering, architectural and project management services especially for Highways. Therefore, the company has a dissimilar functionality the inclusion of the same being illegal is set aside. 19. Infollion Research Services Private Limited is a consultancy company catering to sectors such as consumer goods, foods & beverages, technology & communications and financial & banking and is not sought from the website of the Board report have been submitted so the functions of company are dissimiarl to the functions of the assessee company. Therefore, inclusion of Infollion Research Services Private Limited as a comparable to the impugned transaction of sourcing support services rendered of services being illegal is set aside. Accordingly, ground of appeal No. 6 is partly allowed. 20. In view of the decision of ground of appeal No. 3 to 6, it is held that the impugned account of Ld. AO/TPO/DRP in inclusion of ERM India Private Limited, Mudra Online Technologies Private limited. EdCIL (India) Limited,

P a g e | 13 ITA No. 6233/Del/2025 Newtimes Development India Pvt. Ltd. Abdur Private Limited, Artefact Projects Limited and Infollion Research Services Private Limited are set aside and the matter is restored to the file of Ld. TPO for a fresh decision in accordance with law after affording fair opportunity of hearing to the appellant/assessee. 21. Grounds of Appeal Nos. 7 to 13 are left open. 22. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on 24.08.2026

Sd/- Sd/- (S. RIFAUR RAHMAN) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 24.08.2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI