“captive service provider”

Transfer PricingSection 92CSection 92C229 judgments

The decision most relied on for captive service provider is CIT v. Agnity India Technologies (P.) Ltd. (36 Taxmann.com 289), cited in 171 judgments on BharatTax.

Leading authorities on captive service provider

CIT v. Agnity India Technologies (P.) Ltd.

36 Taxmann.com 289 · 2013 · High Court

171

citing judgments

The Delhi High Court holds that Infosys Ltd. is not comparable to a captive software development service provider for transfer pricing analysis, given its huge turnover, high profit margins, ownership of intangible intellectual property rights, branded products, and differing risk profile.

Trilogy E-Business Software India (P.) Ltd. v. Dy. CIT

29 Taxmann.com 310 · 2013 · ITAT

citing judgments

For Transfer Pricing, this case clarifies that foreign exchange gains can be considered operating revenue for ITES providers, acknowledges the impact of offshore versus onsite development pricing on margins even when using TNMM, and affirms the use of a turnover filter for selecting comparable companies.

68 (Hyd.) Genisys Integrating System (India) (P.) Ltd. v. Dy. CIT

20 Taxmann.com 715 · 2012 · Reported

citing judgments

When determining comparable companies for transfer pricing, there should be an upper limit for turnover, as size impacts business operations. Companies with significantly higher turnover than the assessee should generally be excluded.

Agnity India Pvt. Ltd. v. ITO

58 Taxmann.com 167 · 2015 · Reported

citing judgments

A company with significant brand value, intangible assets, and a business model providing end-to-end solutions leveraging cutting-edge technology cannot be considered comparable to an ordinary captive service provider in transfer pricing analysis.

Avnet India (P.) Ltd. v. DCIT (

65 Taxmann.com 187 · 2016 · Reported

citing judgments

Interest on delayed realization of sale proceeds from associated enterprises is not a separate international transaction. The realization of sale proceeds, whether early or late, is incidental to the primary transaction of sale.

DCIT v. Rehau Polymers Pvt. Ltd.

85 Taxmann.com 23 · 2017 · Reported

citing judgments

The case is cited for principles related to transfer pricing, likely concerning the benchmarking analysis of related party transactions, as indicated by the accompanying topics and keywords.

Finastra Software Solutions (India) (P.) Ltd. v. ACIT

93 Taxmann.com 460 · 2018 · ITAT

citing judgments

A company should be excluded from the list of comparable companies in transfer pricing analysis if it is functionally different, lacks segmental details, has different revenue recognition, or has undergone inorganic growth and owns significant intangible assets.

Global Logic India Ltd. v. Dy. CIT

117 Taxmann.com 39 · 2020 · Reported

citing judgments

A company undergoing restructuring activity during the relevant financial year may be rejected as a comparable in transfer pricing analysis, as such events can impact its profitability.

Judgments citing captive service provider

Deputy Commissioner of Income Tax Circle 8 1 (Incharge), Hyderabad vs. Virtusa Consulting Services Private Limited, Tamil Nadu

In the result, the ground of appeal in Ground No 2-4 in IT(TP)A No

ITA 2632/CHNY/2024[2013-14]Status: DisposedITAT Chennai14 Nov 2025AY 2013-14

Bench: Shri Manu Kumar Giri & Shri S. R. Raghunathait (Tp) A No.:42/Chny/2024 & आयकर अपील सं./ Ita No.2262/Chny/2024 "नधा%रण वष% / Assessment Year: 2013-14 & 2012-13

For Appellant: Shri. N. V. Balaji, AdvocateFor Respondent: Shri. A R V Sreenivasan, C.I.T

Section 10ASection 35(1)(iv)

assessee for the international transactions with Category A subsidiaries of the assessee (Category A subsidiaries are the subsidiaries who operate as captive service providers who undertake lesser functions and bear limited risks vis-à-vis the assessee) compensates the subsidiaries at a cost-plus arm’s length mark

Assistant Commissioner of Income Tax, Hyderabad vs. Virtusa Consulting Services Private Limited, Chennai Tamil Nadu

In the result, the ground of appeal in Ground No 2-4 in IT(TP)A No

ITA 2631/CHNY/2024[2012-13]Status: DisposedITAT Chennai14 Nov 2025AY 2012-13

Bench: Shri Manu Kumar Giri & Shri S. R. Raghunathait (Tp) A No.:42/Chny/2024 & आयकर अपील सं./ Ita No.2262/Chny/2024 "नधा%रण वष% / Assessment Year: 2013-14 & 2012-13

For Appellant: Shri. N. V. Balaji, AdvocateFor Respondent: Shri. A R V Sreenivasan, C.I.T

Section 10ASection 35(1)(iv)

Virtusa Consulting Services Pvt. Ltd., Chennai vs. DCIT, CC-5(2), Chennai

In the result, the ground of appeal in Ground No 2-4 in IT(TP)A No

ITA 2262/CHNY/2024[2012-13]Status: DisposedITAT Chennai14 Nov 2025AY 2012-13

Bench: Shri Manu Kumar Giri & Shri S. R. Raghunathait (Tp) A No.:42/Chny/2024 & आयकर अपील सं./ Ita No.2262/Chny/2024 "नधा%रण वष% / Assessment Year: 2013-14 & 2012-13

For Appellant: Shri. N. V. Balaji, AdvocateFor Respondent: Shri. A R V Sreenivasan, C.I.T

Section 10ASection 35(1)(iv)

Highradius Technologies Private Limited, Hyderabad vs. Deputy Commissioner of Income Tax, Circle -2(1), Hyderabad

ITA 436/HYD/2024[2020-21]Status: HeardITAT Hyderabad12 Nov 2025AY 2020-21

Bench: Us:

Section 143(1)Section 143(3)Section 144B

engaged in the business of providing software development services exclusively to its associated enterprise (for short, “AE”), and is characterized as a captive service provider assuming limited risks. 3. The assessee company had filed its return of income for AY 2020-21 on 24.12.2020, declaring an income ... development and support services provided by the assessee company to its Associated Enterprise (AE). 11. As observed hereinabove, the assessee company is a captive service provider remunerated by its AE on a cost-plus basis. Ostensibly, a perusal of the record reveals that the assessee company neither owns any intellectual

Concur Technologies (India) Private Limited, Bangalore vs. Assistant Commissioner of Income Tax Circle 2(2)(1), Bangalore

Appeal of the assessee is partly allowed as indicated above

ITA 2550/BANG/2024[2021-22]Status: DisposedITAT Bangalore11 Nov 2025AY 2021-22

Bench: Shri Prashant Maharishi & Shri Soundararajan K.Assessment Year : 2021-22

For Appellant: Shri Chavali Narayan, CAFor Respondent: Dr Divya K J, CIT(DR)(ITAT), Bengaluru

Section 144Section 144BSection 144C

determined after taking into consideration the risk profile of the Appellant vis a vis the AEs. The Appellant being a captive service provider bears minimal risk with respect to recovery of outstanding dues. The Appellant's risk profile remains the unchanged in comparison to past years. 11. Without prejudice ... also stated that in most of the cases of this comparable they are also backed by the huge brand and assessee is a captive service provider. The assessee relied upon the decision of the coordinate benches in Autodesk India private limited (TS – 1503 – ITAT – 2018 (Bangalore) – TP), Continental automotive components

Franklin Templeton Internaitoanl Services (I) P.Ltd, Mumbai vs. DCIT (OSD) 3(1), Mumbai

In the result the appeal filed by the assessee for assessment year 2007-08 and 2008-09 stands partly allowed

ITA 7216/MUM/2012[2008-09]Status: DisposedITAT Mumbai13 Oct 2025AY 2008-09

Bench: Smt. Beena Pillai () & Shri Girish Agrawal ()

Section 133(6)Section 92D

no.1061/Del/2013 vide order dated 15/02/2015, placed at page B1–B26 of the paper book. After analyzing the functionality in case of captive service provider similar to the assessee, this Tribunal observed as under: “When undisputedly, the comparable company has two segments one ITES and another Plastic Divisions and ITES division ... civil mapping services to its AEs, which are diametrically dissimilar to each other” 8.6 It is noted that assessee is a captive service provider insofar as the services rendered are concerned, whereas Mold Tech Technologies Ltd u/s. dealing in engineering designs and detailing services, web services, software testing etc. Whereas

Franklin Templeton International Services (I) P. Ltd, Mumbai vs. Asst CIT 3(1)(OSD), Mumbai

In the result the appeal filed by the assessee for assessment year 2007-08 and 2008-09 stands partly allowed

ITA 6986/MUM/2011[2007-08]Status: DisposedITAT Mumbai13 Oct 2025AY 2007-08

Bench: Smt. Beena Pillai () & Shri Girish Agrawal ()

Section 133(6)Section 92D

Appdynamics International Limited, United Kingdom vs. Assistant Commissioner of Income-Tax, (International Taxation), Circle-1(1)(1), Delhi

In the result, appeal of the assessee in ITA No

ITA 3743/DEL/2023[AY 2021-22]Status: DisposedITAT Delhi19 Sept 2025

Bench: Shri Challa Nagendram Prasad & Shri Naveen Chandra

For Appellant: Shri Nageswar Rao, AdvFor Respondent: Shri Siddharth Bhim Singh Meena, CIT-DR

after perusal of the list of activities to be provided by the service provider came to the conclusion that AppD India is a captive service provider, performing much more than just marketing services as the ISA provides for AppD India engagement in technical support services, administrative support services, logistical services ... also. Further, the AO held that the TP study report of AppDynamics India Private Limited clearly shows that AppD India was a captive service provider for AppDynamics international which indicates that all business of AppD India was based on the activities of the assessee in India. To corroborate the facts

Netradyne Technology India Private Limited, Bengaluru vs. Income Tax Officer, Ward-5(1)(1), Bengaluru

In the result, the appeal filed by the assessee is partly allowed

ITA 2258/BANG/2024[2021-22]Status: DisposedITAT Bangalore10 Sept 2025AY 2021-22

Bench: Shri Prashant Maharishi & Shri Keshav Dubeyassessment Year : 2021-22

For Appellant: Shri Suresh Muthukrishnan, ARFor Respondent: Dr. Divya K J, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 144Section 92C

margins. 11. That the learned authorities failed to provide a risk adjustment, ignoring the fact that e Appellant operates as a low-risk captive service provider, while the comparables bear full entrepreneurial risks. 12. Without prejudice to the above, the learned authorities below have erred in disregarding the commercial rationale ... turnover, possess huge brand value and therefore they are not comparable with the assessee company. The ld. AR submitted that assessee is a captive service provider receiving remuneration of 15% on its cost. Therefore, such companies that have huge turnover are not comparable with the margin of the assessee

M/S. Hydro Bs India Private Limited, Bengaluru vs. Deputy Commissioner of Income Tax, Circle-3(1)(1), Bengaluru

The appeal of the assessee is partly allowed

ITA 2117/BANG/2024[2020-21]Status: DisposedITAT Bangalore04 Sept 2025AY 2020-21

Bench: Shri Prashant Maharishi & Shri Keshav Dubeyassessment Year: 2020-21

For Appellant: Shri Harsha, CAFor Respondent: Dr. Divya K J, CIT(DR)(ITAT), Bengaluru

Section 143(3)Section 144CSection 92CSection 92C(3)(c)

Learned TPO has erred in comparing companies who are having significant brand value and are not comparable to Assessee company who are captive service provider to its AEs. 4.7. The Learned TPO has erred in selecting Savitriya Technologies Pvt. Ltd. Ignoring extraordinary event such as merger with MYBMS Software ... above adjustment. This order is appealed against. 11. In the appeal of the assessee, the ld. AR submitted that assessee is a captive service provider to its AE, and its turnover is merely 11 crores. The assessee is compared with two giant companies viz., Infosys BPM Ltd. & Tech Mahindra Business

Future First Info Services Private Ltd., Delhi vs. AO Circle-7(1), Delhi

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 672/DEL/2022[2017-18]Status: DisposedITAT Delhi29 Aug 2025AY 2017-18

Bench: Shri Yogesh Kumar U.S. & Shri Avdhesh Kumar Mishra

Section 143(3)Section 270ASection 92D

that was why younger employees with average age of 27 years (as on 31 March 2017) were employed. The appellant assessee, being a captive service provider was not engaged in developing any commercial/business relationships with anyone engaged with business dealing of its AE. Further, it was submitted that the appellant ... that SPT’s marketing expenses were around 7.02% of the total expenditure as against NIL of the appellant assessee as it was a captive service provider. Judicial pronouncements relied upon (refer pages 264 of PB-II) in this regard were:  Hyundai Motor India Engineering Pvt. Ltd (ITA No. 1807/Hyd/2017)  Evalueserve

M/S. Philips India Ltd., Kolkata vs. DCIT, Circle - 11(1), Kolkata

In the result, the appeal of the assessee is partly allowed for statistical purposes

ITA 2610/KOL/2024[2021-2022]Status: DisposedITAT Kolkata26 Aug 2025AY 2021-2022

Bench: Shri Rajesh Kumar, Am & Shripradip Kumar Choubey, Jm M/S Philips India Limited Rajarhat 4A, 5Th Floor, Ecospace The Dcit Business Park, Premises A4 Ii, Circle 11(1), Aayakar Bhavan, New Town, Chakpachuria, P-7, Chowringhee Square, Vs. Kolkata-700156 Kolkata-700069, West Bengal West Bengal (Appellant) (Respondent) Pan No. Aabcp9487A Assessee By : Shri Ketan Ved, Ar Revenue By : Shri Praveen Kishore, Cit Dr Date Of Hearing: 23.07.2025 Date Of Pronouncement: 26.08.2025

For Appellant: Shri Ketan Ved, ARFor Respondent: Shri Praveen Kishore, CIT DR

before the lower authorities viz. this company is involved in R&D activities and own huge patents which is not akin to a captive service provider. Prayer: In view of the foregoing, we have to request the Bench to direct the TPO to exclude the aforementioned companies from the list ... Philips India Ltd.; A.Y. 2021-22 having R&D activities and own huge patents which is not akin to captive service provider and the relevant paras no. 4.4 to 6.3 of the same are extracted below:- “4.4 Sasken Communication Technologies Ltd. 4.4.1 It is submitted that this comparable has been

ACIT, Circle- 9(1), New Delhi vs. Fis Global Business Solutions India Pvt. Ltd., New Delhi

In the result, the appeal of the Revenue and CO of the assessee are partly allowed as above for statistical purposes

ITA 372/DEL/2018[2009-10]Status: DisposedITAT Delhi25 Aug 2025AY 2009-10

Bench: Shri Sudhir Pareek & Shri Avdhesh Kumar Mishra

from sale of proprietary products like Finacle, Infosys Acticedesk, while the assessee’s revenue was from software development services to AE, a captive service provider. c. High Brand Valued at INR 32,345 crores, a market leader and a Giant Company. d. Huge expenditure on R & D. During the relevant

Ivy Software Development Services Private Limited, Hyderabad vs. DCIT, Circle -2(1), Hyderabad

In the result, the ground no

ITA 73/HYD/2022[2017-18]Status: DisposedITAT Hyderabad16 Jul 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Madhusudan Sawdia

For Appellant: Shri Nageswar Rao, AdvocateFor Respondent: Shri B. Bala Krishna, CIT-DR

Section 143(2)Section 143(3)Section 144C(5)

considered relevant annual reports of Persistent Systems Limited with that of the appellant company and we find that, the assessee-company is a captive service provider to it’s AE on cost plus mark-up basis in respect of one vertical of software development i.e., gaming solutions, whereas, the Persistent ... activities, whereas, the assessee company engaged in providing software development services to it’s AE on cost plus mark-up basis as a captive service provider and, therefore, in our considered view, IT(TP)A No.73/Hyd/2022 9 Persistent Systems Limited cannot be compared with the appellant- company. At this stage

Ssnc Fintech Services India Private Limited, Hyderabad vs. DCIT., Circle 8(1), Hyderabad

In the result, appeal of the Assessee is partly

ITA 916/HYD/2024[AY 2020-21]Status: DisposedITAT Hyderabad03 Jul 2025

Bench: Shri Manjunatha G & Shri Ravish Sood

For Appellant: CA, Ketan K. VedFor Respondent: Shri B. Bala Krishna, CIT-DR

Section 143(3)Section 144C(5)Section 920

also filed Form-3CEB and reported various ITA.No.916/Hyd./2024 international transactions including provision of ITS and ITES. The appellant-company is a captive service provider to it’s AE on cost plus basis as per the agreement entered into by it with it’s AEs. The appellant-company ... into sale of licenses of software products. Therefore, the above company cannot be compared with the appellant- company which is a captive service provider to it’s AEs. In this regard, he relied upon the decision of ITAT, Hyderabad Bench in appellant-company’s own case for the assessment year

Aristocrat Technologies India Private Limited, Noida vs. DCIT, Circle-5(1)(1), Noida

In the result, appeal of the assessee is partly allowed in the terms aforesaid

ITA 3091/DEL/2024[2020-21]Status: DisposedITAT Delhi03 Jul 2025AY 2020-21

Bench: Shri Vikas Awasthy & Shri Avdhesh Kumar Mishraआअसं.3091/िद"ी/2024(िन.व. 2020-21) Aristocrat Technologies India P. Ltd., 8Tgh To 10Th Floor, Tower-11A, Plot No. 20 & 21, Candor Techspace, It/Ites Sez Complex, Sector-135, Noida, Up 201304 ...... अपीलाथ"/Appellant Pan: Aahca-9200-G बनाम Vs. Deputy Commissioner Of Income Tax, ..... "ितवादी/Respondent Circle-5(1)(1), Noida, Up Assessee By : Shri Atul Jain, Chartered Accountant Ms. Nishi Bhutani & Ms.Preeti Agnihotri, Chartered Accountants Department By : S/Shri S.K. Jhadav, Cit(Dr) & Rajesh Kumar Dhaneshta, Sr.Dr सुनवाई क" ितिथ/ Date Of Hearing : 04/04/2025 घोषणा क" ितिथ/ Date Of Pronouncement : : 03/07/2025 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed Against The Assessment Order Dated 27.05.2024 Passed U/S. 143(3) R.W.S. 144C(13) R.W.S 144B Of The Income Tax Act,1961(Hereinafter Referred To As ‘The Act’). 2. The Facts Of The Case In Brief As Emanating From Records Are: The Assessee Is Engaged In Providing Design & Development Services To Its Associated Enterprises (Ae’S). The Assessee Is Also Rendering Global It Services To Its Ae’S

For Appellant: Shri Atul Jain, Chartered AccountantFor Respondent: S/Shri S.K. Jhadav, CIT(DR) & Rajesh Kumar Dhaneshta, Sr.DR

Section 143(3)Section 234BSection 270A

Associated Enterprises (AE’s). The assessee is also rendering Global IT Services to its AE’s 2 only. Thus, the assessee is a captive service provider. During the period relevant to assessment year under appeal the assessee entered into following international transactions with its AE’s:- (i) Provision of software ... assessee is an engaged in providing Software Development Services and Global Information Technology Services to its AE’s. The assessee is a captive service provider. Whereas, Cybage Software P. Ltd. is a product company unlike the assessee i.e. engaged only in development and testing module of certain software

ACIT, Circle 3(3)(1), Mumbai vs. Xoriant Solutions Private Limited, Mumbai

In the result, appeal by the revenue is dismissed

ITA 540/MUM/2025[2012-2013]Status: DisposedITAT Mumbai26 Jun 2025AY 2012-2013

Bench: Shri Anikesh Banerjee & Shri Girish Agrawalassessment Year: 2011-12 & Assessment Year 2012-13

For Appellant: Shri Pankaj Toprani, AdvocateFor Respondent: Shri Asif Karmali, Sr. DR

Section 143(3)

from the list of comparables without analyzing the impact of turnover on the profitability and ignoring the fact that the assessee is a captive service provider to its AE, therefore, the quantum of turnover will not affect the profit margin being earned by the assessee from its AE? ii. Whether

ACIT, Circle 3(3)(1), Mumbai vs. Xoriant Solutions Private Limited, Mumbai

In the result, appeal by the revenue is dismissed

ITA 539/MUM/2025[2011-2012]Status: DisposedITAT Mumbai26 Jun 2025AY 2011-2012

Bench: Shri Anikesh Banerjee & Shri Girish Agrawalassessment Year: 2011-12 & Assessment Year 2012-13

For Appellant: Shri Pankaj Toprani, AdvocateFor Respondent: Shri Asif Karmali, Sr. DR

Section 143(3)

ACIT, Circle-1(1)(1), Bangalore vs. Acuity Knowledge Centre (India) Pvt. Ltd., Bangalore

In the result, the appeal filed by the revenue is dismissed

ITA 2110/BANG/2024[2011-12]Status: DisposedITAT Bangalore03 Jun 2025AY 2011-12

Bench: Shri Waseem Ahmed & Shri Soundararajan K.Assessment Year : 2011-12

For Respondent: Ms. Tanmayee Rajkumar

Section 92C

company, which enables it to command the market and earn better margin renders it incomparable to the Assessee which is a captive service provider. Also, during the financial year 2010-11 under consideration, the company acquired McCamish Systems LLC, which constitutes a peculiar economic circumstance. Since no reasonably accurate adjustments

Volkswagen Group Technology Solutions India Pvt. Ltd., Pune vs. National Faceless Assessment Center, Assessment Unit Delhi, Delhi

In the result, appeal of the assessee is partly allowed

ITA 1950/PUN/2024[2020-21]Status: DisposedITAT Pune28 May 2025AY 2020-21

Bench: Dr.Dipak P. Ripote & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.1950/Pun/2024 िनधा"रण वष" / Assessment Year: 2020-21 Volkswagen Group Technology V National Faceless Solutions India Pvt. Ltd., S Assessment Center, Embassy Techzone, 9Th Floor, Assessment Unit, Delhi. 1.3 Congo Building, Rajiv Gandhi, Infotech Park, Infotech Park Hinjavadi, Pune – 411057. Maharashtra. Pan: Aafcv1368L Appellant/ Assessee Respondent / Revenue Assessee By Shri Nikhil Pathak – Ar Revenue By Shri Prakash L Pathade – Cit(Dr) Date Of Hearing 15/05/2025 Date Of Pronouncement 28/05/2025

Section 143(3)Section 144BSection 153Section 92C(1)Section 92C(3)

Volkswagen Group Technology Solutions India Private Limited (earlier know as Volkswagen IT Services India Private Limited), incorporated on 09 June 2015, is a captive service provider engaged in the business of providing IT services to its Group companies. For AY 2020-21, the turnover of the Assessee was approximately