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Facts
The assessee's appeal is against the order of the Ld. ACIT for AY 2018-19. The primary grievance is the inclusion of certain companies as comparables and the exclusion of comparables proposed by the assessee.
Held
The Tribunal held that the authorities below did not consider the settled position of law in including certain companies and also did not consider the 28 comparables proposed by the assessee. The matter is remanded to the AO/TPO for fresh consideration.
Key Issues
Inclusion of comparable companies and exclusion of assessee's proposed comparables.
Sections Cited
Section 3.6 of Income Tax Act
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Income Tax Appellate Tribunal, DELHI
ORDER
PER YOGESH KUMAR, U.S. JM:
The present appeal is filed by the Assessee against the order of Ld. Assistant Commissioner of Income Tax (Appeals), Gurgaon (‘Ld.
ACIT’ for short), dated 19/07/2022 pertaining to Assessment Year 2018-19.
The first grievance of the Assessee is against the inclusion of comparable companies namely: Info Edge (India) Ltd.,Majestic Research Services and solutions Ltd. and AXS Online Private Limited.
The Ld. Counsel has relied on following judicial precedents and submitted that the inclusion of the above Companies are contrary to the principal laid down by the Tribunal. a) Ravsoft Solutions Private Limited IT (TP)A No. 109/Chny/2024) (Excludes comparables citing significant turnover). b) Xoriant Solutions P. Ltd. (ITA No. 539/Mum/2024) & IITA No. 540/Mum/2024) (upholds Ld. CIT(A)’s exclusion of comparables for failing turnover filter, etc.). c) Genesys Telecom Labs India Pvt. .Ltd. (ITA No. IT (TP)A No. 38/CHNY/2024 (Excluded comparables failing upper turnover filter). d)Brigade Global Services Pvt. Ltd. (ITA No. 988/Hyd/2011) (Employee cost to Total cost). e) BP India Services P. Ltd. (ITA No. 6977/Mum/2012) (employee cost to Total Sales).
Further, the Ld. Assessee's Representative also contended that A.O/TPO has not considered the 28 comparables proposed by the Assessee. Thus, sought for allowing the Appeal.
Per contra, the Ld. Department's Representative relying on the orders of the Lower authorities, sought for dismissal of the appeal.
We have heard both the parties and perused the material available on record. It is evident from the record, the Assessee has proposed following 28 new comparable companies and also provided the Business description of those companies during the Assessment proceedings.
However, the TPO has not considered the companies proposed by the Assessee forbenchmarking the transaction.
Further, the authorities below have not considered the settled position of law while including the comparable companies namely Info Edge (India) Ltd., Majestic Research Services and solutions Ltd. and AXS Online Private Limited. Considering the above facts and circumstances, we find appropriate to remand the matter to the file of the A.O./TPO with a direction to consider all the judicial precedents mentioned supra while including the comparable companies namely Info Edge (India) Ltd., Majestic Research Services and solutions Ltd. and AXS Online Private Limited. Further we hereby direct to consider above mentioned 28 new comparable companies selected by the Assessee for benchmarking the transaction and decide the issue in hand. Accordingly, the Appeal of the Assessee is partly allowed for statistical purpose.
Order pronounced in the open court on 4th February, 2026.