PR COMMSIONER OF INCOEM TAX vs. B.C. MANAGEMENT SERVICES PRIVATE LIMITED.

PDF · subscribers
ITA/1117/2017HC DelhiDLHC01455073201705 December 2017Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE SANJEEV SACHDEVA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the Revenue's appeal. It noted that identical questions of law had been urged by the Revenue in a previous appeal concerning AY 2011-2012 (Pr. Commissioner of Income Tax vs. B.C. Management Services Pvt. Ltd., ITA 1064/2017 & ITA 1083/2017), which was decided on 28.11.2017 and dismissed. The High Court stated that for the same reasons, no substantial question of law arose in the present appeal. Therefore, the arguments of the Revenue concerning the exclusion of comparables, foreign exchange gain, and notional interest were rejected, mirroring the decision in the prior appeal. The operative direction was the dismissal of the appeal.

What were the facts?

The Revenue has filed an appeal before the High Court of Delhi challenging an order of the Income Tax Appellate Tribunal (ITAT) for the Assessment Year (AY) 2013. The appeal concerns the determination of Arm's Length Price (ALP) for international transactions. The specific issues raised by the Revenue relate to the exclusion of certain comparable companies by the ITAT, the treatment of foreign exchange gains as part of operating income for ALP determination, and the exclusion of a Transfer Pricing Officer's (TPO) adjustment for notional interest on delayed payments from Associated Enterprises (AEs). The Revenue is the appellant, and B.C. Management Services Private Limited is the respondent. The respondent was not represented before the High Court.

What were the issues?

The High Court was asked to decide three questions of law: 1. Whether the exclusion of four comparable companies, namely e-Clerx Pvt. Ltd., M/s ICRA Techno Analytics Ltd., M/s TCS E-Serve Ltd., and M/s Accentia Technologies Pvt. Ltd., by the ITAT is sustainable and not erroneous, as per Section 92CA of the Income Tax Act, 1961. 2. Whether the ITAT's findings regarding foreign exchange gain and its treatment as part of operating income for ALP determination are correct and justified, under Section 92C of the Income Tax Act, 1961. 3. Whether the exclusion of the Transfer Pricing adjustment made by the TPO, which included notional interest on the delay in receipt of payment from Associated Enterprises (AEs), was justified, under Section 92CA of the Income Tax Act, 1961. The Revenue contended that the ITAT's exclusions and treatments were erroneous. The judgment does not record any arguments made by the respondent (assessee).

Which sections of the Income-tax Act were involved?

Section 92C,Section 92CA

AI-generated summary — verify with the full judgment below

ITA 1117/2017 Page 1 $~52 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1117/2017 C.M. No.44230/2017. PR COMMSIONER OF INCOEM TAX ..... Appellant Through: Mr. Zoheb Hossain, Advocate. versus B.C. MANAGEMENT SERVICES PRIVATE LIMITED. ..... Respondent Through: None. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE SANJEEV SACHDEVA O R D E R % 05.12.2017 1. The Revenue in its appeal in AY 2013 urges the following questions of law:- “1. Whether the exclusion of four comparables i.e. e- Clerx Pvt. Ltd., M/s ICRA Techno Analytics Ltd., M/s TCS E-Serve Ltd. and M/s Accentia Technologies Pvt. Ltd., are sustainable and not erroneous?” 2. Whether the findings of the ITAT with respect to foreign exchange gain and the manner of its treatment as part of Operating Income for ALP determination, is correct and is justified? 3. Whether the exclusion of the Transfer Pricing adjustment made by the TPO, added notional interest on delay in receipt of payment of Associated Enterprises (AE) was justified?”

ITA 1117/2017 Page 2 2. This Court notices that identical questions were urged for AY 2011-2012, by the Revenue in Pr. Commissioner of Income Tax vs. B.C. Management Services Pvt. Ltd. (ITA 1064/2017 & ITA 1083/2017) decided on 28.11.2017, when those appeals were dismissed; the exclusion of the comparables and revenue in respect of foreign exchange gain and on the issue of notional interest the arguments of the Revenue were rejected. 3. No substantial question of law arises in this appeal as well for those reasons. The appeal is, consequently, dismissed. S. RAVINDRA BHAT, J SANJEEV SACHDEVA, J DECEMBER 05, 2017 st

More judgments on Section 92C

All 1,769 judgments and leading authorities on Section 92C →

Recent GST High Court judgments

Search GST case law →