What did the High Court hold?

The High Court found that while a remit by the ITAT was justified, the lack of reasoning by all authorities on the inclusion of comparables meant the matter was open for the assessee. All contentions of the parties regarding the comparables were kept open.

The assessee appealed the ITAT's order regarding the inclusion of certain comparable companies in the transfer pricing analysis. The assessee argued that the ITAT's affirmation of lower authorities' orders was unreasoned.

What were the issues?

Whether the ITAT's affirmation of lower authorities' orders on the inclusion of comparable companies was reasoned. Whether the assessee's right to contend against the inclusion of comparables is preserved.

Aginity India Technologiers P. Ltd vs CIT | Delhi High Court 2017

$~32 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 99/2017 & CM Nos.4174-75/2017 AGINITY INDIA TECHNOLOGIERS P. LTD. ..... Appellant Through: Mr. Sanat Kapoor, Advocate. Versus COMMISSIONER OF INCOME TAX-1 ..... Respondent Through: Mr. Rahul Chaudhary, Advocate. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI O R D E R % 03.02.2017 1. Issue notice. Mr. Rahul Chaudhary, Advocate accepts notice on behalf of the respondent. 2. The assessee in this appeal against the order of the Income Tax Appellate Tribunal (ITAT) under Section 260A of the Income Tax Act, 1961 (for short ‘the Act’) questions the inclusion of three comparables i.e. E-Zest Solutions Ltd., Flextronics Software System Ltd. and Persistent Systems Ltd. These were introduced by the TPO and affirmed concurrently by the DRT and the ITAT. The assessee has also appealed inclusion of eight other comparables i.e. Avani Cincom Technologies Ltd., KALS Information System Ltd., I Gate Global Solutions Ltd., Tata ELXSI Limited (Seg), Thirdware Solutions Ltd. (Seg-), Softsol India Ltd., Infosys Technologies Ltd. and Wipro Ltd. (after excluding rental income etc.). The ground urged is that the ITAT’s affirmation of the DRT’s order and in turn

that Authorities’ orders are unreasoned as to the grounds urged before this Appellate Authority. 3. This Court has considered the submissions and materials on record and is of the opinion that even though the remit by the ITAT is justified, the lack of any reasoning by any Authority, as to the inclusion of the comparables, would mean that the matter is open for the assessee and that its right to contend that inclusion of such comparables is not in accordance with law, for the whatever grounds it chooses to urge are open. The ITAT’s order is accordingly partly allowed and all rights and contentions of the parties are kept open in respect of all the comparables mentioned in this order. 4. The appeal is disposed off accordingly. S. RAVINDRA BHAT, J. NAJMI WAZIRI, J. FEBRUARY 03, 2017 sb

AGINITY INDIA TECHNOLOGIERS P. LTD. vs. COMMISSIONER OF INCOME TAX-1

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