What did the High Court hold?

The Tribunal concurred with the DRP's finding of functional dissimilarity, noting the comparable's involvement in fund accounting, significant intangibles, and different employee profile leading to supernormal profits. As there were concurrent findings of fact, no substantial question of law arose.

The Revenue appealed against an ITAT order that upheld the DRP's deletion of M/s Basiz Fund Services Private Limited from the list of comparable enterprises. The DRP had found functional dissimilarity due to the nature of services, intangible assets, and employee profile of the comparable.

What were the issues?

Whether the ITAT erred in upholding the DRP's decision to exclude a comparable enterprise based on functional dissimilarity, and if a substantial question of law arises from concurrent findings of fact.

The Rp. Commissioner of Income… vs Microsoft Corporation India Pvt… | Delhi High Court 2019

$~42. * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 874/2019

THE RP. COMMISSIONER OF INCOME TAX -6..... Appellant

Through: Mr. Ruchir Bhatia, Advocate.

versus

MICROSOFT CORPORATION INDIA PVT. LTD...... Respondent

Through:

CORAM: HON'BLE MR. JUSTICE VIPIN SANGHI HON'BLE MR. JUSTICE SANJEEV NARULA

O R D E R % 27.09.2019

C.M. No. 43458/2019

By this application, the appellant seeks condonation of 287 days’ delay in re-filing the appeal. Since the delay relates for re-filing, we are inclined to condone the same. Accordingly, the same is condoned.

The application stands disposed of. ITA 874/2019

The appellant has preferred the present appeal to assail the order dated 22.06.2018 passed by the Tribunal, inter alia, in ITA No. 1206/Del/2014 preferred by the Revenue for assessment year 2009-10. The said appeal had been preferred to assail the order passed by the DRP, whereby the DRP had deleted M/s Basiz Fund Services Private Limited from the list of comparable enterprises. The order of the DRP was premised on its earlier order in

relation to the assessment year 2008-09. The DRP held that M/s Basiz Fund Services Private Limited was not appropriate for the purpose of comparison, on account of functional dissimilarity.

The Tribunal held the finding of the DRP – that the company M/s Basiz Fund Services Private Limited is functionally dissimilar to the assessee, is founded on the circumstances that the said company is involved in fund accounting services; it possesses significant intangible assets, and; it had different employees profile, which resulted in significant growth at 57.61% and earning of profits at 46.75% at supernormal level.

Even if the supernormal level of profit at 46.75% were not to be considered as a reason to treat the said enterprises as not comparable, the fact remains that the Tribunal concurred with the view of the DRP on functional dissimilarity.

Aforesaid being the position, in our view, no question of law arises in the present appeal since concurrent findings of fact have been returned by the DRP and the Tribunal. The same is, accordingly, dismissed.

VIPIN SANGHI, J

SANJEEV NARULA, J SEPTEMBER 27, 2019 B.S.Rohella

THE RP. COMMISSIONER OF INCOME TAX -6 vs. MICROSOFT CORPORATION INDIA PVT. LTD.

What did the High Court hold?

What were the facts?

What were the issues?

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