“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

Vertex Offshore Services Private Limited, Hyderabad vs. Dict, Circle-8(1), Hyderabad

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

ITA 204/HYD/2021[ 2016-17]Status: DisposedITAT Hyderabad16 May 2025

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: Shri Nageswar Rao, AdvocateFor Respondent: MS. M. Narmada, CIT-DR

Section 143(3)Section 144C(1)Section 144C(5)Section 92CSection 92C(3)

scale of operations is several times higher than the appellant- company. Therefore, Infosys Limited cannot be compared to appellant-company which is the captive service provider to it’s AE on cost plus mark-up basis. In this regard, the Learned Counsel for the Assessee relied on the decision

Ab Inbev Gcc Services India Private Limited, Bangalore, Karnataka vs. Assistant Commissioner of Income Tax, Circle-1(1)(1), Bangalore

In the result, appeal is allowed for statistical purposes

ITA 1635/BANG/2024[2020-21]Status: DisposedITAT Bangalore13 May 2025AY 2020-21

Bench: Shri. Laxmi Prasad Sahu & Shri. Keshav Dubeyit(It)A No.1635/Bang/2024 Assessment Year :2020-21

For Appellant: Shri. Chavali Narayan, CAFor Respondent: Ms. Neera Malhotra, CIT(DR)(ITAT), Bangalore

Section 143(3)Section 144BSection 153Section 92B

group entities business. The tax payer is engaged in providing IT enabled back-office support services to its group entities as a captive service provider. The tax payer, through its STPI Unit viz., GAC is engaged in providing analytical support services to its group entities. Analytical support services involve using

Quinnox Consultancy Services Limited, Mumbai vs. DCIT, 3(1)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 4299/MUM/2024[2020-21]Status: DisposedITAT Mumbai09 May 2025AY 2020-21

Bench: SHRI AMIT SHUKLA (Judicial Member), MS. PADMAVATHY S (Accountant Member)

Section 143(3)

provides outsourced services, (software development services') including development, testing, and maintenance and support services, to its Associated Enterprises ("AE"). Assessee is not a captive service providers and it renders software development services to both AE's and non-AEs, which are similar in nature. Therefore, the Quinnox India is characterized ... segment of the Appellant. (ii) Low margin as compared to safe harbour is not relevant as the Appellant is not a captive service provider on a total cost-plus basis 12 Quinox Consultancy Services Limited  Appellant is exposed to pricing pressures hence it is required to offer its services

DCIT, New Delhi vs. M/S. Fis Global Business Solutions India Pvt. Ltd., New Delhi

In the result, both appeals of the revenue stand dismissed and both Cos are allowed as above

ITA 2387/DEL/2014[2008-09]Status: DisposedITAT Delhi09 May 2025AY 2008-09

Bench: SHRI AVDHESH KUMAR MISHRA (Accountant Member)

scale:A giant company, engaged into diversified business of consulting, software product development, etc. was not a suitable comparable to the assessee, a captive service provider (Page 33 and 37 of the Convenience Compilation). b. Product Company with no segmental financials: Its substantial revenue was from sale of proprietary products ... excluded Wipro Ltd. 26. We have heard both parties and have perused the material available on the record. The assessee is a captive service provider to one and only one CO No.02/Del/2015 CO No.03/Del/2013 AE. Its scale of operation is limited to one party and it has no brand value

DCIT, New Delhi vs. Fis Global Business Solution India (P) Ltd., New Delhi

In the result, both appeals of the revenue stand dismissed and both Cos are allowed as above

ITA 5939/DEL/2012[2007-08]Status: DisposedITAT Delhi09 May 2025AY 2007-08

Bench: SHRISUDHIR KUMAR (Judicial Member), SHRI AVDHESH KUMAR MISHRA (Accountant Member)

Here Solutions India Private Limited, Mumbai vs. Assistant Commissioner of Income-Tax, Circle 10 (1)(1), Mumbai

In the result, the appeal of the asessee bearing ITA No

ITA 5918/MUM/2024[2014-15]Status: DisposedITAT Mumbai08 May 2025AY 2014-15

Bench: Shrianikesh Banerjee () & Shri Girish Agrawal ()

Section 143(3)Section 144C(3)Section 250Section 92D

mark-up for rendering of ITES and IT services. Based on the functional analysis, the assessee can be characterized as a limited risk captive service provider in relation to its said services rendered to its AE.A detailed and systematic search process was adopted by the assessee in the Transfer pricing ... providing Information Technology Enabled Services (ITES) and Software Development Services (IT Services) to its AEs on a cost-plus basis, operating as a captive service provider with minimal risk. The assessee conducted a detailed economic analysis supported by a TP Study Report and selected comparables following the requirements under Section

Icici Bank Ltd, Mumbai vs. Addl CIT RG 3 (1), Mumbai

ITA 4249/MUM/2014[2008-09]Status: DisposedITAT Mumbai30 Apr 2025AY 2008-09

Bench: Smt. Beena Pillai & Shri Omkareshwar Chidara

For Appellant: Arati VissanjiFor Respondent: Shri Ajay Chandra, CIT/DR

Section 10(15)Section 14ASection 250Section 36(1)(vii)Section 92C

2152/M/2014 vide dated 10.10.2014. Hon'ble High Court noted that this company is a high end KPO and this cannot be compared with captive service provider. 21 6. 6. On the contrary, the Ld.DR relied on the order passed by the authorities below. It is submitted by the Ld.DR that ... noted that this Accropetal Technologies Ltd is high end knowledge processing service provider as against the assessee who a captive service provider rendering services to its AE with minimal risk. Further, it is noted that, the revenue generated under the ITES segment of this company is more than

DCIT Cir 3(1), Mumbai vs. Icici Bank Ltd, Mumbai

ITA 4159/MUM/2014[2008-09]Status: DisposedITAT Mumbai30 Apr 2025AY 2008-09

Bench: Smt. Beena Pillai & Shri Omkareshwar Chidara

For Appellant: Arati VissanjiFor Respondent: Shri Ajay Chandra, CIT/DR

Section 10(15)Section 14ASection 250Section 36(1)(vii)Section 92C

2152/M/2014 vide dated 10.10.2014. Hon'ble High Court noted that this company is a high end KPO and this cannot be compared with captive service provider. 19 ITA No.4249 & 4159/Mum/2014 ICICI Bank Ltd. 6. 6. On the contrary, the Ld.DR relied on the order passed by the authorities below ... noted that this Accropetal Technologies Ltd is high end knowledge processing service provider as against the assessee who a captive service provider rendering services to its AE with minimal risk. Further, it is noted that, the revenue generated under the ITES segment of this company is more than

Digital Insight India Products Private Limited, Mumbai vs. ACIT Circle 6(2)(2), Mumbai

ITA 5048/MUM/2024[AY 2017-18]Status: DisposedITAT Mumbai29 Apr 2025

Section 143(3)Section 2Section 234BSection 234CSection 250Section 253(1)(a)Section 44ASection 50BSection 50B(3)

Assessing Officer be restored.” 3. The relevant facts in brief are that Assessee, a subsidiary of Digital Insight Corp, USA, is a captive service provider which was engaged in providing software services to Digital Insight Corp, USA. During the relevant previous year, the Assessee entered into a 'Business Sale

Asstt. Commissioner of Income Tax, Aaykar Bhawan, Mumbai vs. Digital Insight India Products P. Ltd., Mumbai

ITA 5036/MUM/2024[2017-18]Status: DisposedITAT Mumbai29 Apr 2025AY 2017-18

Section 143(3)Section 2Section 234BSection 234CSection 250Section 253(1)(a)Section 44ASection 50BSection 50B(3)

Aon Consulting Private Limited, New Delhi vs. DCIT, Circle-1(1), Delhi

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

ITA 739/DEL/2022[2017-18]Status: DisposedITAT Delhi09 Apr 2025AY 2017-18

Bench: Shri Vikas Awasthy & Shri Pradip Kumar Kediaआअसं.739/िद"ी/2022(िन.व. 2017-18) M/S Aon Consulting P. Ltd., Aon Centre, 9Th To 11Th, Building No.2, Unitech Realty Projects Ltd., (Sez), Village Tikri, Sector 48, Gurgaon, Haryana 122001 ...... अपीलाथ"/Appellant Pan: Aahca-0739-J बनाम Vs. Deputy Commissioner Of Income Tax, ..... "ितवादी/Respondent Circle 1(1), Delhi Assessee By : Shri Darpan Kirpalani, Advocate Department By : S/Shri Rajesh Kumar & Rajesh Kumar Dhanesta, Sr. Dr सुनवाई क" ितिथ/ Date Of Hearing : 17/01/2025 घोषणा क" ितिथ/ Date Of Pronouncement : : 09/04/2025 आदेश/Order Per Vikas Awasthy, Jm: This Appeal By The Assessee Is Directed The Assessment Order Dated 22.02.2022 Passed U/S. 143 R.W.S. 144C(13) R.W.S 144B Of The Income Tax Act,1961(Hereinafter Referred To As ‘The Act’). 2. The Assessee In Appeal Has Assailed Transfer Pricing Adjustment Made In Respect Of Software Development Services Segment. The Assessee Has Also Assailed Some Additions On Corporate Issue, Viz. Disallowance Made U/S. 14A R.W.S. 8D & Additions Based On Intimation U/S. 143(1) Of The Act.

For Appellant: Shri Darpan Kirpalani, AdvocateFor Respondent: S/Shri Rajesh Kumar & Rajesh Kumar Dhanesta, Sr. DR

Section 143Section 143(1)Section 14A

segment. The assessee is also providing back office support services to its Associates Enterprises (AE’s) all over the globe. The assessee/appellant is captive services provider. During the period relevant to assessment year under appeal the assessee entered into several international transactions with its AE’s. The Transfer Pricing Officer ... Tata Elxsi Ltd. under service segment are not comparable to the assessee which is providing software development service to its AE’s as captive service provider. In addition to the above Tata Elxsi Ltd. has substantial brand value, in light of decision in the case of PCIT vs. Oracle (OFSS

Capita India Private Limited, Mumbai vs. Assessment Unit, National Faceless Assessment Centre (NFAC), Mumbai

ITA 4954/MUM/2024[AY 2020-21]Status: DisposedITAT Mumbai07 Apr 2025

For Respondent: Shri Kiran Unavekar

Section 143(3)Section 144BSection 144C(13)Section 144C(5)Section 153Section 92C

further segmental details are available. Further, MPS Limited has also developed proprietary products/platform. On the other hand the Appellant continues to be a captive service provider providing support services to its AEs. Thus, MPS Limited is has functionally dissimilarities and in absence of segmental data, MPS cannot be taken

Gallagher Service Center LLP (Formerly Known As Gallagher Operations Support Services P Ltd), Pune vs. Assistant Commissioner of Income-Tax, NFAC, Delhi

In the result, the Ground Number 6 is Partly Allowed for Statistical purpose

ITA 679/PUN/2022[2018-19]Status: DisposedITAT Pune24 Mar 2025AY 2018-19

Bench: Dr.Dipak P. Ripote & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.679/Pun/2022 िनधा"रण वष" / Assessment Year : 2018-19 Gallagher Services Center V Additional/Joint Llp, S Commissioner Of Income 401, Delta 2, Gigaspace It Tax. Park, Vimannagar, Pune – 411014. Pan: Aaqfg7417F Appellant/ Assessee Respondent /Revenue Assessee By Shri M.P.Lohia – Ar Revenue By Shri Prakash L Pathade – Cit(Dr) Date Of Hearing 23/01/2025 Date Of Pronouncement 24/03/2025 आदेश/ Order Per Dr.Dipak P.Ripote, Am : This Is An Appeal Filed By The Assessee Against The Assessment Order Of Passed Under Section 143(3) R.W.S 144C(3) Read With Section 144B Of The Income Tax Act, 1961; Dated 15.07.2022 For A.Y.2018-19. The Assessee Has Raised The Following Grounds Of Appeal : “Based On The Facts & Circumstances Of The Case, The Appellant Respectfully Craves Leave To Prefer An Appeal Under Section 253(1)(D)

Section 143(3)Section 144Section 144BSection 253(1)(d)

Appellate Tribunal to decide this appeal according to law.” Brief facts of the case : 2. As per assessment order, Assessee is a captive service provider engaged in providing back-office support in insurance domain exclusively to its group companies. During the impugned year, the assessee has Export Oriented Units

M/S Bt E-Serv (India) Pvt. Ltd., New Delhi vs. ITO, New Delhi

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

ITA 99/DEL/2016[2011-12]Status: DisposedITAT Delhi21 Mar 2025AY 2011-12

Bench: Shri Challa Nagendra Prasad & Shri Naveen Chandraआ.अ.सं/.I.T.A No.99/Del/2016 िनधा"रणवष"/Assessment Year:2011-12 बनाम Bt E-Serve (India) Pvt. Ltd., Ito, 11Th Floor, Eros Corporate Tower, Vs. Ward 5(2), Nehru Place, New Delhi. New Delhi. Pan No.Aadcb2533M अपीलाथ" Appellant ""यथ"/Respondent

seen that the assessee provides only back office support services in the nature of IT enabled services and it is essentially a captive service provider. Although, the assessee has pleaded for exclusion of BPO Infosys Ltd. on other grounds also, it is our considered opinion that the wide functional dissimilarity

M/S. Philips India Limited, Kolkata vs. D.C.I.T., Circle - 11(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 1960/KOL/2024[2020-2021]Status: DisposedITAT Kolkata11 Mar 2025AY 2020-2021

Bench: Duvvuru Rl Reddy, Vp & Shri Rajesh Kumar, Am M/S Philips India Limited Dcit, Circle 11(1) 3Rd Floor, Tower-A, Dlf Park, Aaykar Bhavan, P-7, 08 Block Af, Major Arterial Chowringhee Square, Road, New Town (Rajarhat), Vs. Kolkata-700069, Kolkata-700156, West Bengal West Bengal (Appellant) (Respondent) Pan No. Aabcp9487A Assessee By : Shri Ketan Ved, Ar Revenue By : Shri A. Kundu, Cit Dr Date Of Hearing: 07.03.2025 Date Of Pronouncement : 11.03.2025

For Appellant: Shri Ketan Ved, ARFor Respondent: Shri A. Kundu, CIT DR

Section 92Section 92C

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 ... that the company is not functionally comparable due to its 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

Ivy Software Development Services Private Limited, Hyderabad vs. Asst. Commissioner of Income Tax, Circle-2(1), Hyderabad

In the result, appeal of the assessee is partly allowed

ITA 1801/HYD/2019[2015-16]Status: DisposedITAT Hyderabad06 Mar 2025AY 2015-16

Bench: Shri Manjunatha G & Shri K. Narasimha Chary

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

Section 143(3)Section 144C(5)Section 92C

list of comparables in light of various evidences including the relevant annual reports of the company. We find that the appellant is a captive service provider to it’s AE on cost plus mark-up basis, whereas, Tata Elxsi Limited is engaged in providing product design and engineering services ... ITA.No.1801/Hyd./2019 revenue. From the details filed by the assessee-company, we find that the assessee-company is a simple captive service provider to it’s AE, whereas, Tata Elxsi Limited is a company which provides a software development services to multiple segments and to different verticals of industry

Red Hat India Pvt Ltd, Mumbai vs. Aadl/Jt/Dy/ACIT/ITO, Mumbai

In the result appeal filed by the assessee stands partly allowed as indicated hereinabove

ITA 801/MUM/2022[2017-18]Status: DisposedITAT Mumbai28 Feb 2025AY 2017-18

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 143(3)Section 144Section 144C

IN THE INCOME TAX APPELLATE TRIBUNAL “J” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER) AND SHRI OMKARESHWAR CHIDARA (ACCOUNTANT

Lokesh Kumar Aggarwal, Delhi vs. ITO, Ward-45(5), Delhi

In the result, all appeals of the assessee are partly allowed

ITA 1575/DEL/2023[2012-13]Status: DisposedITAT Delhi20 Jan 2025AY 2012-13

Bench: Shri Vikas Awasthy & Shri Brajesh Kumar Singh

Section 10Section 143(2)Section 143(3)Section 144C(13)Section 144C(5)Section 2Section 92C

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘I’: NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI BRAJESH

Ims Health Analytics Services Private Limited, Bangalore vs. Income Tax Officer, Ward-3(1)(1), Bangalore

ITA 300/BANG/2022[2017-18]Status: DisposedITAT Bangalore18 Dec 2024AY 2017-18

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyit(Tp)A No.300/Bang/2022

For Appellant: Shri Ajit Tolani & Sri Darpan Kriplani, CAFor Respondent: Shri A Sreenivasa Rao, CIT (DR)

vide order dated 30. 11.2022. He submitted that the assessee in Mindteck (India) Ltd. vs. DCIT (supra) has been considered to be a captive service provider The Ld.AR submitted that the website information of this comparable reveals that it is into medical transcription however there is no segmental details available

Cognizant Technology Solutions India Private Limited(Erstwhile Excellence Data Research Private Limited), Chennai vs. Asst. Commissioner of Income Tax, Central Circle-17(1), Hyderabad

In the result, appeal of the assessee is partly allowed

ITA 13/HYD/2018[2013-14]Status: DisposedITAT Chennai08 Nov 2024AY 2013-14

Bench: Shri Aby T. Varkey & Shri Amitabh Shuklaआयकर अपील सं./Ita No.13/Hyd/2018 िनधा"रण वष"/Assessment Year: 2013-14 V. M/S. Cognizant Technology- The Acit, Solutions India Pvt. Ltd., Circle-17(1), 9Th Floor, (As Successor In Interest Of Erstwhile Excellence Data Signature Towers, Opp: Botanical Garden, Research Pvt. Ltd.), 6Th Floor, New No.165, Old No.110, Kondapur, Hyderabad. Menon Eternity Building, St. Mary’S Road,Alwarpet, Chennai-600 018. [Pan: Aabce 4933 C] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Appellant: Mr. S.P.Chidambaram, AdvFor Respondent: Ms. C. Vatchala, CIT

Section 143(3)Section 144C(5)Section 92C

case or in law, AO/DRP has erred in making negative working capital adjustment in the Appellant's case who is mainly a captive service provider, without taking into account the jurisdictional judicial precedents on the issue ITA No.13/Hyd. /2018 (AY 2013-14) M/s. Cognizant Technology – Solutions India ... Ld.TPO/DRP making negative working capital adjustment without appreciating the crucial fact that company does not bear any working capital risk, being a captive service provider [ refer ground number 13]. The Ld. AR submitted that assessee company does not bear any working capital risk, since it is fully funded