“captive service provider”

Asst.CIT, Bangalore vs. M/S Xerox Business Services of India Pvt. Ltd., Bangalore

In the result, the appeal filed by the assessee is partly allowed for statistical purposes and the appeal filed by the Revenue is partly allowed

Bench: Shri Chandra Poojari, Am & Smt. Beena Pillai, Jm

final assessment order. 6. The learned AO/DRP/TPO has erred, in law and on facts by not appreciating that the Appellant is a captive service provider, carrying out limited functions and assuming limited risks and therefore needs to be compared with appropriate comparable set. 7. The learned AO/DRP/TPO have erred ... making negative working capital adjustment In relation to the services provided by the Appellant without appreciating the fact that the Appellant Is a captive service provider and does not bear any working capital risk.” 3. The assessee filed petition for admission of additional grounds stating that inadvertently these additional grounds

M/S. Infineon Technologies India Pvt Ltd, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bengaluru

In the result the appeal filed by assessee stands allowed partly

Bench: Shri B. R. Baskaran & Smt. Beena Pillaiit(Tp)A No.2870/Bang/2017 Assessment Year: 2013-14 M/S. Infineon Technologies India Pvt. Ltd. Deputy Commissioner 9Th Floor Prestige Of Income-Tax Thirulakshmi Vs. Circle-3(1)(1) No.11 M.G. Road Bengaluru Bengaluru 560 001 Pan No : Aabcs6967N Appellant Respondent Appellant By : Shri K.R. Vasudevan, A.R. Shri Sumer Singh Meena, Respondent By : D.R. Date Of Hearing : 13.01.2022 Date Of Pronouncement : 31.03.2022 O R D E R Per Beena Pillai: Present Appeal Is Filed By Assessee Against The Order Dated 16/10/2017 Passed By The Ld.Dcit Under Section 143(3) R.W. Section 144C(13) For Assessment Year 2013-14 On Following Grounds Of Appeal: “The Grounds Mentioned Hereinafter Are Without Prejudice To One Another.

purposes of inter-company transfer pricing. Based on facts presented in the above FAR analysis, the assessee can be characterised as a captive service provider that assumes lower than the normal risks associated with the business of providing software development. Based on the above we undertake the exclusion/inclusion ... note that, assessee before Hon'ble Karnataka High Court as well as in the decision by coordinate bench of this Tribunal hereinabove, were captive service provider like assessee before us. Respectfully following the same we direct the Ld.TPO to exclude the comparable's alleged hereinabove for exclusion Accordingly Ground No.9

M/S Verifone India Technology Pvt Ltd, Bangalore vs. Deputy Commissioner of Income Tax Circle-7(1)(2), Bangalore

In the result, appeals filed by assessee stands allowed

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2011-12 M/S. Verifone India Technology Pvt. Ltd., A 101, 1St Floor, Cyber The Income Tax Park, Plot No. 76, 77 & 78, Officer, Doddathogur Village, Ward – 7 (1) (3), Begur Hobli, Bangalore. Bangalore South Taluk, Vs. Bangalore – 560 100. Pan: Aaccv1683K Appellant Respondent & Assessment Year : 2012-13 M/S. Verifone India Technology Pvt. Ltd., A 101, 1St Floor, Cyber The Deputy Park, Plot No. 76, 77 & 78, Commissioner Of Doddathogur Village, Income Tax, Begur Hobli, Circle – 7 (1)(2), Bangalore South Taluk, Vs. Bangalore. Bangalore – 560 100. Pan: Aaccv1683K Appellant Respondent Assessee By : Shri K.R. Vasudevan, Advocate : Shri Priyadarshi Mishra, Addl. Revenue By Cit (Dr) Date Of Hearing : 22-02-2022 Date Of Pronouncement : 25-03-2022

additional grounds raised by assessee for both years under consideration. 2. Brief facts of the case are as under: The assessee is a captive service provider, rendering Software Development Services to its parent company Verifone Singapore Pte. Ltd. Assessment Year 2011-12 During the year, the assessee reported the following ... that there is no change on the functions of the assessee for the year under consideration. Assessee has been catagorised to be a captive service provider Page 18 ITA Nos. 3088 & 3089/Bang/2018 who provides services to its AE only. Assessee is also compensated at Cost plus markup for the services

M/S Verifone India Technology Pvt Ltd, Bangalore vs. Income Tax Officer Ward-7(1)(3), Bangalore

In the result, appeals filed by assessee stands allowed

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2011-12 M/S. Verifone India Technology Pvt. Ltd., A 101, 1St Floor, Cyber The Income Tax Park, Plot No. 76, 77 & 78, Officer, Doddathogur Village, Ward – 7 (1) (3), Begur Hobli, Bangalore. Bangalore South Taluk, Vs. Bangalore – 560 100. Pan: Aaccv1683K Appellant Respondent & Assessment Year : 2012-13 M/S. Verifone India Technology Pvt. Ltd., A 101, 1St Floor, Cyber The Deputy Park, Plot No. 76, 77 & 78, Commissioner Of Doddathogur Village, Income Tax, Begur Hobli, Circle – 7 (1)(2), Bangalore South Taluk, Vs. Bangalore. Bangalore – 560 100. Pan: Aaccv1683K Appellant Respondent Assessee By : Shri K.R. Vasudevan, Advocate : Shri Priyadarshi Mishra, Addl. Revenue By Cit (Dr) Date Of Hearing : 22-02-2022 Date Of Pronouncement : 25-03-2022

additional grounds raised by assessee for both years under consideration. 2. Brief facts of the case are as under: The assessee is a captive service provider, rendering Software Development Services to its parent company Verifone Singapore Pte. Ltd. Assessment Year 2011-12 During the year, the assessee reported the following ... that there is no change on the functions of the assessee for the year under consideration. Assessee has been catagorised to be a captive service provider Page 18 ITA Nos. 3088 & 3089/Bang/2018 who provides services to its AE only. Assessee is also compensated at Cost plus markup for the services

M/S Quest Global Engineering Services Pvt Ltd, Bangalore vs. Assistant Commissioner of Income Tax Circle-5(1)(1), Bangalore

In the result, the appeal filed by the assessee is treated as allowed

Bench: Shri N.V. Vasudevan & Shri B.R. Baskaranit(Tp)A No.978/Bang/2018 Assessment Year : 2013-14

sought relief on following items:- (a) Exclusion of three comparables (b) Deletion of Negative working capital adjustment, as the assessee is a captive service provider. Accordingly, we confine ourselves with regard to the above said two items. 3.1 The Ld A.R submitted that the TPO has selected 7 comparable companies ... supra) passed by this Tribunal, it has been held that negative working capital adjustment shall not be made in case of a captive service provider as there is no risk and it is compensated on a total cost plus basis. We therefore direct Ld. TPO to compute

Ids Software Solutions India Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bangalore

In the result, appeal by the assessee is partly allowed

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.537/Bang/2021 Assessment Year : 2009-10 M/S. Ids Software Solutions Pvt. Ltd., Dcit, Vs. Shabari Complex, Ground Floor, Fo Cabin, No.8, Circle – 3(1)(1), Field Marshal Cariappa Road, Ashok Nagar, Bengaluru. Bengaluru-560 025. Pan : Aabci 243O G Assessee Respondent Assessee By : Shri. K. R. Vasudevan, Advocate Revenue By : Shri. Sumer Singh Meena, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 09.03.2022 Date Of Pronouncement : 11.03.2022 O R D E R Per N V Vasudevan

Software Application Development – MIDAS Reject Functionally different Infosys 42.43% R & D Activities& software Technologies Ltd products Assumes significant risks as 2 compared to captive service providers Owns brand Intangibles Generated several inventions and acquired IPR Reject Functionally different Persistent 39.66% Engaged in development of Systems Ltd 3 Software Products

M/S.Goldman Sachs Services Private Limited, Bangalore vs. Asst. Commissioner of Income Tax, Bangalore

In the result, appeal by the assesse is partly allowed

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.474/Bang/2017 Assessment Year : 2012-13 Goldman Sachs Services Pvt. Ltd., Acit, Vs. Crystal Downs, Embassy Golf Links Business Circle – 3(1)(2), Park, Off Intermediate Ring Road, Bengaluru. Bengaluru-560 071. Pan : Aaccg 2435 N Assessee Respondent Assessee By : Shri. Madhur Agarwal, Advocate Revenue By : Shri. Sumer Singh Meena, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 07.03.2022 Date Of Pronouncement : 11.03.2022 O R D E R Per N V Vasudevan

earned by the Appellant. 1.7 The Honorable DRP and the Learned AO/ TPO have erred in not appreciating that the Appellant, being a captive service provider, operates at lower risk levels as compared to comparable IT(TP)A No.474/Bang/2017 Page 3 of 16 companies, which carry higher risks (including receivables ... providing contract Software Development Services (SWD Services) and providing Information Technology Enabled Services (ITES) to its holding company in Netherlands BV as a captive service provider. The transaction of rendering software development services and ITES to holding company was a transaction with an Associated Enterprise (AE) and was therefore

Altran Technologies India Pvt Ltd, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-1(1)(1), Bengaluru

In the result the appeal filed by assessee stands partly allowed

Bench: Shri. B.R. Baskaran & Smt. Beena Pillaiit(Tp)A No. 2904/Bang/2017 Assessment Year : 2013-14 M/S. Altran Technologies India Pvt. Ltd., C/O Ernst & Young Llp, The Deputy Ground & 1St Floor, Commissioner Of Income ‘A’ Wing, Divyasree Chambers, Tax, Vs. #11, O’ Shaughnessy Road, Circle – 1 (1)(1), Langford Gardens, Bangalore. Bangalore – 560 025. Pan: Aaaca7125R Appellant Respondent Assessee By : Shri Nageswar Rao, Advocate Revenue By : Shri Pradeep Kumar, Cit-Dr Date Of Hearing : 27-12-2021 Date Of Pronouncement : 07-03-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against The Final Assessment Order Dated 31/10/2017 Passed By The Ld.Dcit, Circle – 1(1)(1), Bangalore For Assessment Year 2013-14 On Following Grounds Of Appeal: “Based On The Facts & Circumstances Of The Case & In Law, Altran Technologies India Private Limited (The 'Appellant') Respectfully Craves Leave To Prefer An Appeal Against The Order Passed By The Learned Assessing Officer (Hereinafter Referred To As The 'Id. Ao') Under Section 143(3) Read With Section 144C Of The Income-Tax Act, 1961 (The 'Act') Pursuant To The Directions Issued By The Hon'Ble Dispute Resolution Panel (`Drp') On The Following Grounds:

many subsidiaries all over the world. It is also evident that this comparables are into development of product unlike assessee that is a captive service provider. Under such circumstances we do not consider such a giant company to be functionally comparable with assessee. Respectfully following the above we uphold

Acuity Knowledge Centre (India) Private Limited (Formerly Known As Moody'S Analytics Knowledge Services (India) Private Limited), Bengaluru vs. Deputy Commissioner of Income Tax, Circle-4(1)(2), Bengaluru

In the result, appeal of the assessee is partly allowed

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaranit(Tp)A No.2689/Bang/2017 Assessment Year : 2013-14 Dcit, M/S. Acuity Knowledge Centre (India) Pvt. Ltd., Vs. (Formerly Known As Moody’S Analytics Knowledge Circle – 4(1)(2), Services (India)Private Limited), Bengaluru. Elixir Chancery Building, 7Th Floor, Municipal Door #135/1-2, Residency Road, Bengaluru – 560 025. Pan : Aaeca 9391 H Assessee Respondent Assessee By : Shri. Chavali Narayan, Ca Revenue By : Shri. Sumer Singh Meena, Cit(Dr)(Itat), Bengaluru Date Of Hearing : 24.02.2022 Date Of Pronouncement : 28.02.2022 O R D E R Per N V Vasudevan

very high brand value in the market and also bears all related risk and cannot be compared to the assessee which is a captive service provider. Further, since it commands a very high brand value it enjoys premium pricing. The aforesaid company is therefore directed to be excluded from

American Power Conversion (India) Private Limited, Bangalore vs. Addl.C.I.T., Bangalore

In the result, appeal of the assessee stands partly allowed as indicated herein above

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 1111/Bang/2012 Assessment Year : 2008-09

where the ITAT ruled that a giant company like Infosys assuming all risk leading to higher profit cannot be considered as comparable to captive services providers assuming limited risk. 1.2.10. in accepting companies engaged in the provision of software product development like KALS Information Systems Limited, Avani Cimcon Technologies Limited ... company being most important assets along with furniture fixtures computer peripherals etc. Risks Assumed: It is submitted that, as assessee is a captive service provider and is compensated at cost +10%, it does not bear any risks like market risk, financial risk, credit and collection risk and service Page

Deputy Commissioner of Income Tax, Circle- 6(1)(1), Bangalore vs. M/S. Sharp Software Development India Private Limited, Bangalore

In the result, the appeal filed by the Revenue and the cross objection filed by the assessee are dismissed

around the globe. (g) Infosys operates as a full-fledged risk bearing entrepreneur as compared to the assessee which is a risk mitigated captive service provider. 12.3 In support of the above submission, the learned AR relied on the following orders of the Tribunal. (i) Arcot R&D Software Private

M/S Herbalife International India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax Circle-3(1)(2), Bangalore

Bench: Shri N V Vasudevan & Shri Chandra Poojari

have heard rival submissions and perused the material on record. The CIT(A) has given a categorical finding that the assessee is a captive service provider and is operating on cost plus basis. It was held by the CIT(A) that since the entire revenue of the assessee was from ... amount taken for financial lease as mentioned earlier. Therefore, the assessee does not have borrowings / loans for working capital and is purely a captive service provider providing software development services only to its AEs. Therefore, in such circumstances, there is no working capital risk since the assessee is working

Assistant Commissioner of Income Tax, Circle-3(1)(2), Bengaluru vs. M/S Herbal Life International India Pvt Ltd, Bengaluru

Bench: Shri N V Vasudevan & Shri Chandra Poojari

have heard rival submissions and perused the material on record. The CIT(A) has given a categorical finding that the assessee is a captive service provider and is operating on cost plus basis. It was held by the CIT(A) that since the entire revenue of the assessee was from ... amount taken for financial lease as mentioned earlier. Therefore, the assessee does not have borrowings / loans for working capital and is purely a captive service provider providing software development services only to its AEs. Therefore, in such circumstances, there is no working capital risk since the assessee is working

M/S Herbalife International India Pvt Ltd, Bangalore vs. Assistant Commissioner of Income Tax Circle-3(1)(2), Bangalore

Bench: Shri N V Vasudevan & Shri Chandra Poojari

have heard rival submissions and perused the material on record. The CIT(A) has given a categorical finding that the assessee is a captive service provider and is operating on cost plus basis. It was held by the CIT(A) that since the entire revenue of the assessee was from ... amount taken for financial lease as mentioned earlier. Therefore, the assessee does not have borrowings / loans for working capital and is purely a captive service provider providing software development services only to its AEs. Therefore, in such circumstances, there is no working capital risk since the assessee is working

M/S Herbalife International India Pvt Ltd, Bangalore vs. Assistant Commissioner of Income Tax Circle-3(1)(2), Bangalore

Bench: Shri N V Vasudevan & Shri Chandra Poojari

have heard rival submissions and perused the material on record. The CIT(A) has given a categorical finding that the assessee is a captive service provider and is operating on cost plus basis. It was held by the CIT(A) that since the entire revenue of the assessee was from ... amount taken for financial lease as mentioned earlier. Therefore, the assessee does not have borrowings / loans for working capital and is purely a captive service provider providing software development services only to its AEs. Therefore, in such circumstances, there is no working capital risk since the assessee is working

Harman Connected Services Corporation India Private Limited (Formerly Known As M/S Core Objects India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-3(1)(2), Bangalore

In the result, appeal of the assessee is treated as partly allowed

Bench: Shri N. V. Vasudevan & Shri B. R. Baskaran

given to the customers. The assessee IT(TP)A Nos.682, 632/Bang/2016 Page 10 of 27 however is not an entrepreneur but a captive service provider which is entirely funded by its AE and has no working capital contingencies. The assessee has not incurred any expenses for meeting the working capital ... reliance the following decisions wherein consistently it has been held that negative working capital adjustment shall not be made in case of a captive service provider: (i) Adaptec (India) (P.) Ltd. v. ACIT ([2015] 57 taxmann.com 307 (Hyderabad - Trib.)); (ii) Lam Research India Pvt. Ltd. (order dated 30.04.2015 passed