DEPUTY COMMISSIONER OF INCOME TAX vs. EXL SERVICES.COM INDIA PVT. LTD.

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ITA/329/2017HC DelhiDLHC01152868201715 May 2017Bench: HON'BLE DR. JUSTICE S.MURALIDHAR,HON'BLE MR. JUSTICE CHANDER SHEKHAR2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the order of the ITAT did not give rise to any substantial question of law concerning the two issues raised by the Revenue. The Court, after hearing the learned counsel for the parties and examining the ITAT's order, concluded that the ITAT's findings on the exclusion of Vishal Information Technology Limited and the comparability of KPO with BPO companies were not amenable to further appeal on the grounds of substantial question of law. Therefore, the appeal filed by the Revenue was dismissed. The specific reasoning of the ITAT for its decision on these points is not detailed in this High Court judgment.

What were the facts?

The Revenue, represented by the Deputy Commissioner of Income Tax, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated July 25, 2016, passed by the Income Tax Appellate Tribunal (ITAT). The ITAT's order pertained to ITA No. 4504/Del/2013 for the Assessment Year 2006-07. The Revenue's appeal was filed with a delay of 80 days, which was condoned by the High Court. The appeal challenged the ITAT's decision regarding the determination of the arm's length price for the assessee, EXL Services.com India Pvt. Ltd.

What were the issues?

The High Court was to decide the following substantial questions of law: 1. Whether the ITAT erred in excluding Vishal Information Technology Limited from the list of comparables for the determination of arm's length price. 2. Whether a company engaged in the business of Knowledge Process Outsourcing (KPO) could be considered a comparable for benchmarking the international transaction of an Assessee engaged in Business Process Outsourcing (BPO). Assessee's Contentions: The judgment does not record any specific contentions made by the assessee. Revenue's Contentions: The Revenue argued that the ITAT erred on facts and in law concerning the exclusion of Vishal Information Technology Limited and the comparability of KPO companies with BPO companies.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

ITA 329/2017

Page 1 of 2

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 5 +

ITA 329/2017

DEPUTY COMMISSIONER OF INCOME TAX ..... Appellant

Through: Mr. Rahul Chaudhary, Senior standing

counsel with Ms. Lakshmi Gurung, Junior

standing counsel.

versus

EXL SERVICES.COM INDIA PVT. LTD ..... Respondent

Through: Mr. Himanshu Sinha with Ms. Vrinda

Tulshan, Advocates.

CORAM:

JUSTICE S.MURALIDHAR JUSTICE CHANDER SHEKHAR

O R D E R %

15.05.2017

CM APPL 16641/2017 (For delay) 1. For the reasons stated therein, this application is allowed. The delay of 80 days in filing the present appeal is condoned.

ITA 329/2017 2. This appeal under Section 260A of the Income Tax Act, 1961 (‘Act’) by the Revenue is directed against the impugned order dated 25th July 2016 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No. 4504/Del/2013 for the Assessment Year 2006-07.

The questions sought to be urged by the Revenue in this appeal are

ITA 329/2017

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whether the ITAT erred on facts and in law (a) in excluding Vishal Information Technology Limited from the list of comparables for determination of arm’s length price and (b) whether the company engaged in the business of Knowledge Process Outsourcing (KPO) could be considered as comparable for the purpose of benchmarking the international transaction of an Assessee which is engaged in the business of Business Process Outsourcing (BPO).

Having heard learned counsel for the parties and having examined the impugned order of the ITAT, the Court is of the view that in view of the order of the ITAT it does not give rise to any substantial question of law which concerns either of the above issues.

The appeal is dismissed.

S.MURALIDHAR, J

CHANDER SHEKHAR, J MAY 15, 2017 Rm

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