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“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
48
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
35
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
21
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
19
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
17
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
14
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
11
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

Orange Business Services India Solutions Private Limited (Formerly Known As Equant Solutions India Private Limited), Gurgaon vs. ACIT, Circle-3(1), Gurgaon

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

ITA 2026/DEL/2022[2018-19]Status: DisposedITAT Delhi30 May 2023AY 2018-19

Bench: Shri Shamim Yahya & Shri Yogesh Kumar Us

For Appellant: Shri Rishabh Malhotra, ARFor Respondent: Shri Rajesh Kumar, CIT(DR)
Section 143(3)Section 144BSection 144CSection 144C(13)Section 92B

including companies having high margin /volatile operating profit margins as comparable to the Appellant without appreciating that it is a low risk captive service provider; 6. On the facts and circumstances of the case and in law, the Ld. TPO has erred in including functionally incomparable companies including ASM Technologies

Addl. CIT, Special Range- 2, New Delhi vs. Barco Electronics Systems Pvt. Ltd., New Delhi

In the result, the appeal is dismissed

ITA 6249/DEL/2018[2014-15]Status: DisposedITAT Delhi06 Apr 2023AY 2014-15

Bench: Shri Saktijit Dey & Dr. Brr Kumar, Accountant Membr Assessment Year: 2014-15

huge turnover of more than 1783 times of assessee’s turnover. 26. Besides the above, Infosys Ltd. cannot be a comparable to a captive service provider like the assessee because of brand value, diversified activities, intangibles owned etc. Therefore, we uphold the decision of learned Commissioner (Appeals

Barco Electronic Systems Pvt. Ltd., New Delhi vs. ACIT, Special Range-2, New Delhi

In the result, the appeal is dismissed

ITA 6123/DEL/2018[2014-15]Status: DisposedITAT Delhi06 Apr 2023AY 2014-15

Bench: Shri Saktijit Dey & Dr. Brr Kumar, Accountant Membr Assessment Year: 2014-15

huge turnover of more than 1783 times of assessee’s turnover. 26. Besides the above, Infosys Ltd. cannot be a comparable to a captive service provider like the assessee because of brand value, diversified activities, intangibles owned etc. Therefore, we uphold the decision of learned Commissioner (Appeals

DCIT, New Delhi vs. M/S Rampgreen Solutions Pvt. Ltd., (Erstwhile Vcostomer Services India Pvt. Ltd), New Delhi

In the result, the appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed

ITA 1618/DEL/2016[2011-12]Status: DisposedITAT Delhi24 Mar 2023AY 2011-12

Bench: Shri G. S. Pannua N D Shri Challa Nagendra Prasad

Section 143(3)Section 144C(5)Section 14ASection 234ASection 271(1)(c)Section 92C

brand value, definitely has a huge effect in PLI and vitiates the comparability under FAR analysis with a company which is a captive service provider without much tangibles and risks. It is further pointed out that the operations of TCS e-serve broadly comprise of transaction processing and technical services

M/S. Rampgreen Solutions Pvt. Ltd., Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee is partly allowed and the appeal of the Revenue is dismissed

ITA 1404/DEL/2016[2011-12]Status: DisposedITAT Delhi24 Mar 2023AY 2011-12

Bench: Shri G. S. Pannua N D Shri Challa Nagendra Prasad

Section 143(3)Section 144C(5)Section 14ASection 234ASection 271(1)(c)Section 92C

brand value, definitely has a huge effect in PLI and vitiates the comparability under FAR analysis with a company which is a captive service provider without much tangibles and risks. It is further pointed out that the operations of TCS e-serve broadly comprise of transaction processing and technical services

Qualcomm India Pvt. Ltd., New Delhi vs. Addl.CIT, Special Range-7, New Delhi

In the result, the appeal is partly allowed

ITA 8177/DEL/2018[2014-15]Status: DisposedITAT Delhi19 Jan 2023AY 2014-15

Bench: Shri G.S. Pannu, Hon’Ble & Shri Saktijit Deyassessment Year: 2014-15

Section 143(3)Section 144C(13)

selection of this comparable, learned counsel submitted that the assessee is a wholly owned subsidiary of the parent company and is a captive service provider. She submitted that the assessee is remunerated at cost plus 15% and bears limited risk. She submitted, Infobeans is into development and sale of software ... from the list of comparables. 11.2 We have considered rival submissions and perused the materials on record. Undisputedly, the assessee is a purely captive service provider and minimal risk bearing entity. Whereas, Infosys BPO is a risk bearing entity having diversified activities. It has the advantage of Infosys brand name

Fil India Business & Research Services P.Ltd, New Delhi vs. Dc, Circle-7(1), New Delhi

In the result, appeal of the assessee is partly allowed

ITA 1358/DEL/2022[2018-19]Status: DisposedITAT Delhi17 Jan 2023AY 2018-19

Bench: Sh. Anil Chaturvedi & Sh. Chandra Mohan Gargfil India Business & Vs. Dc Research Services P. Ltd., Circle – 7(1) Private Studio – New Delhi Ncr/Ac/Ps/00/010B, Ground Floor, Worldmark 1, Asset Area 11, Aerocity, Hospitality District, Indira Gandhi International Airport, New Delhi-110 002 Pan : Aabcf 1572 C (Appellant) (Respondent) Assessee By Shri K. M. Gupta, Adv. Shri Rishabh Malhotra, A.R. & Shri Bhavya Gupta, C.A. Revenue By Shri Amaresh Singh, Cit-D.R. Date Of Hearing: 21.12.2022 Date Of Pronouncement: 17.01.2023 Order Per Anil Chaturvedi, Am :

Section 139Section 139(1)Section 143(2)Section 143(3)Section 144CSection 144C(13)Section 144C(2)Section 144C(5)Section 36(1)(va)Section 43B

company stated to be engaged in provision of Software Development, ITES and Research development services to its AEs, wherein it acts as captive service provider. Assessee electronically filed its original return of income for A.Y. 2018-19 on 29.04.2022 declaring total income at Rs.94,69,38,530/-. The case

Nan Lion Ship Management Llc, Mumbai vs. Assistant Commissioner of Income Tax (International Taxation) -3(3)(1), Mumbai

In the result, the appeal filed by the assessee stands allowed

ITA 1857/MUM/2022[2019-20]Status: DisposedITAT Mumbai30 Dec 2022AY 2019-20

Bench: Shri Amit Shukla, Jm & Shri Gagan Goyal, Am आयकरअपीलसं./ I.T.A. No. 1857/Mum/2022 (निर्धारणवर्ा / Assessment Year: 2019-20) Acit (Int. Tax) – 3(3)(1), Nan Lian Ship Management 1630, 16Th Floor, Air India Llc Building Nariman Point, C/O- Chamber 2 & 3, Cosmos बिधम/ Mumbai-400 021 Trade Place, Ground Floor, Vs. Khatu Building, Opp-Bse, Fort, Mumbai-400 001 स्थायीलेखासं./जीआइआरसं./ Pan No. Aagcn0478E (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant By : Shri Nishit Gandhi /Dhanlaxmi Iyer, Ld. Ars प्रत्यथीकीओरसे/Respondent By : Shri Soumendu Kumar Das, Ld. Dr सुनवाईकीतारीख/ : 03.11.2022 Date Of Hearing घोषणाकीतारीख / : 30.12.2022 Date Of Pronouncement आदेश / O R D E R Per Amit Shukla: The Aforesaid Appeal Has Been Filed By The Assessee Against The Final Assessment Order Dated 27.05.2022, Passed By Ld. Ao U/S 2

For Appellant: Shri Nishit GandhiFor Respondent: Shri Soumendu Kumar Das
Section 144C(5)Section 2Section 44BSection 9(1)(vi)

charterer cannot be treated as giving up the vessel for hiring simplicitor or that the owner has agreed to be a captive service provider to the charter for transporting the coal between the ports. The vessel which has been stated to be at the disposal of the charterer means that ... basis of calculation of the load which has been provided in the said agreement. Similarly, clauses 6 & 7 stipulate that, captive service provider has to provide service of transportation exclusively to the charterer and the vessel cannot be utilized for anyone else in the period of time charter

M/S. Applied Materials India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle- 1(1)(1), Bangalore

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

ITA 2582/BANG/2019[2015-16]Status: DisposedITAT Bangalore30 Dec 2022AY 2015-16

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Respondent: Shri T. Suryanarayana

Page 8 IT(TP)A No. 2582/Bang/2019 provision of SWD services and engineering services to Applied Inc., its AE, as a captive service provider. 2.2 The Ld.AO noted that assessee had international transaction with its Associated Enterprise and therefore reference was made to the Ld.TPO for determining the arms length ... relevant material on record. Undisputedly, the assessee is charging a mark up on the software development services provided to the AE being captive service provider. Therefore the assessee is not acting as an agent or distributor of the AE but is a provider of services

Xchanging Solutions Limited, Bangalore vs. The Deputy Commissioner of Income Tax, Circle-7(1)(1), Bangalore

In the result, the appeal is partly allowed

ITA 292/BANG/2022[2017-18]Status: DisposedITAT Bangalore21 Dec 2022AY 2017-18

Bench: Shri N.V. Vasudevan & Ms. Padmavathy S

For Appellant: Shri Padamchand Khincha, CAFor Respondent: Shri K. Sankar Ganesh, Jt.CIT(DR)(ITAT), Bengaluru
Section 143(2)Section 143(3)

From this it is clear that this company is rendering services to non-AE customers also, whereas the assessee before us is a captive service provider only catering to the requirements of its AE. Under such circumstances we do not deem it fit to be considered in the final

Microsemi India Private Limited (Now Merged With Microchip Technology (India) Private Limited), Hyderabad vs. Deputy Commissioner of Income Tax, Circle-5(1)(1), Hyderabad

In the result, the appeal is partly allowed

ITA 211/BANG/2021[2016-17]Status: DisposedITAT Bangalore19 Dec 2022AY 2016-17

Bench: Shri N.V. Vasudevan & Ms. Padmavathy S

For Appellant: Smt. Tanmayee Rajkumar, AdvocateFor Respondent: Shri K. Sankar Ganesh, Jt.CIT(DR)(ITAT), Bengaluru
Section 143(2)Section 143(3)Section 92C

available. In our view, under such circumstances, this company cannot be held to be functionally comparable with that of assessee which is a captive service provider that caters only to its AE. 24.1 In view of the above order of the Tribunal, we hold that this comparable to be excluded

Wissen Infotech Private Limited, Hyderabad vs. Deputy Commisssioner of Income Tax, Circle-17(2), Hyderabad

In the result, the appeal of assessee in ITA

ITA 329/HYD/2021[2016-17]Status: DisposedITAT Hyderabad12 Dec 2022AY 2016-17

Bench: Shri Rama Kanta Panda & Shri Laliet Kumar

For Appellant: Shri P.V.S.S.Prasad, CAFor Respondent: Shri Jeevan Lavidiya, CIT-DR
Section 234ASection 92C

Infosys Ltd. 57365 54034 38.31 Thus, the Assessee submits to apply the upper turnover filter for selecting the comparable companies for a captive service provider like the Assessee. Out of 13 Companies asked for exclusion the following 8 Companies are having Turnover> 200 Crores and the same

Wissen Infotech Private Limited, Hyderabad vs. Dy. Commissioner of Income Tax, Circle-17(2), Hyderabad

In the result, the appeal of assessee in ITA

ITA 1820/HYD/2019[2015-16]Status: DisposedITAT Hyderabad12 Dec 2022AY 2015-16

Bench: Shri Rama Kanta Panda & Shri Laliet Kumar

For Appellant: Shri P.V.S.S.Prasad, CAFor Respondent: Shri Jeevan Lavidiya, CIT-DR
Section 234ASection 92C

Infosys Ltd. 57365 54034 38.31 Thus, the Assessee submits to apply the upper turnover filter for selecting the comparable companies for a captive service provider like the Assessee. Out of 13 Companies asked for exclusion the following 8 Companies are having Turnover> 200 Crores and the same

Excellence Data Research Private Limited, Hyderabad, Chennai vs. ACIT, Circle-17(1), Hyderabad

The appeal stands partly allowed in terms of our above order

ITA 461/HYD/2017[2012-13]Status: DisposedITAT Chennai06 Dec 2022AY 2012-13

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri S.P. Chidambaram (Advocate)-Ld. ARFor Respondent: Dr. S. Palanikumar (CIT) –Ld. DR
Section 143(3)Section 144C(5)Section 92C

erred in making a 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. Use of Filters 10. That on facts and circumstances of the case and in law, the AO/DRP erred

It Expressway Limited, Chennai vs. DCIT Company Circle II(3), Chennai

The appeal stands partly allowed in terms of our above order

ITA 1040/CHNY/2018[2011-12]Status: DisposedITAT Chennai05 Dec 2022AY 2011-12

Bench: Hon’Ble Shri Mahavir Singh & Hon’Ble Shri Manoj Kumar Aggarwal, Am

For Appellant: Shri S.P. Chidambaram (Advocate)-Ld. ARFor Respondent: Dr. S. Palanikumar (CIT) –Ld. DR
Section 143(3)Section 144C(5)Section 92C

erred in making a 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. Use of Filters 10. That on facts and circumstances of the case and in law, the AO/DRP erred

Subex Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-6(1)(1), Bangalore

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

ITA 282/BANG/2022[2017-18]Status: DisposedITAT Bangalore30 Nov 2022AY 2017-18

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Ajay Rotti, A.RFor Respondent: Shri Manjunath Karkihalli, D.R
Section 143(3)Section 144BSection 144C(13)Section 92C(3)Section 92DSection 9A(3)

case of 24/7 Customer.Com Pvt. Ltd. in ITA No.227/Bang/2010 has held that a company owning intangibles cannot he compared to a low risk captive service provider who does not own any intangible and hence does not have an additional advantage in the market. It is submitted that this decision ... Infosys Technologies Ltd. being a giant company and market leader assuming all risks leading to higher profits cannot be considered as comparable to captive service providers assuming limited risk ; (iii) the company has generated several inventions and filed for many patents in India and USA ; (iv) the company has substantial

Applied Materials India Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-1(1)(1), Bangalore

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

ITA 209/BANG/2021[2016-17]Status: DisposedITAT Bangalore30 Nov 2022AY 2016-17

Bench: Shri Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 209/Bang/2021 Assessment Year : 2016-17 M/S. Applied Materials India Pvt. Ltd., Unit -5, 3Rd Floor, The Deputy Explorer Building, Commissioner Of International Tech Income Tax, Park, Circle – 1(1)(1), Whitefield Road, Vs. Bangalore. Bangalore – 560 001. Pan: Aaeca2635C Appellant Respondent : Shri T. Suryanarayana, Assessee By Advocate : Dr. Manjunath Karkihalli, Revenue By Cit-Dr Date Of Hearing : 30-11-2022 Date Of Pronouncement : 30-11-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against The Order Dated 31/03/2021 Passed By The National E-Assessment Centre, Delhi For A.Y. 2016-17 On Following Grounds Of Appeal:

For Respondent: Shri T. Suryanarayana
Section 143(1)Section 143(2)Section 195Section 40Section 92C

relevant material on record. Undisputedly, the assessee is charging a mark up on the software development services provided to the AE being captive service provider. Therefore the assessee is not acting as an agent or distributor of the AE but is a provider of Page ... specifications provided by AEs. Based on such a FAR profile, it may be appropriate to characterize Applied India as a limited risk captive service provider. 7. Based on the above facts, as presented in the FAR analysis, the assessee cannot be characterised as a full-fledged software service provider. Assessee

M/S. Sartorius Stedim India Private Limited, Bangalore vs. Assistant Commissioner of Income Tax, Circle- 6(1)1), Bangalore

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

ITA 1695/BANG/2019[2012-13]Status: DisposedITAT Bangalore28 Nov 2022AY 2012-13

Bench: Shri Chandra Poojari & Smt. Beena Pillaiit(Tp)A No. 1695/Bang/2019 Assessment Year : 2012-13 M/S. Sartorius Stedim India Pvt. Ltd., The Assistant No. 69/2 & 69/3, Commissioner Of Kunigal Road, Income Tax, Jakkasandra, Circle – 6(1)(1), Nelamangala, Vs. Bangalore. Bengaluru – 562 123. Pan: Aabcs7591Q Appellant Respondent : Shri Narendra Kumar Jain, Assessee By Ca : Shri Venudhar Godesi, Revenue By Jcit-Dr Date Of Hearing : 28-10-2022 Date Of Pronouncement : 28-11-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against The Order Dated 20/05/2019 Passed By The Ld.Cit(A) For A.Y. 2012-13 On Following Grounds Of Appeal: “General Ground 1. The Order Of The Learned Commissioner Of Income Tax (Appeals)-6 (Hereinafter Referred To As Cit(A)) To The Extent Prejudicial To The Appellant Is Bad In Law. Transfer Pricing - General Grounds 2. The Learned Cit(A) Has Erred In Confirming The Action Of The Ao & Tpo In: A) Making A Reference For The Determination Of The Arm'S Length Price Of The International Transactions To The Tpo

For Respondent: Shri Narendra Kumar Jain

assessee before us is not catering to non-AEs for marketing support services as observed from the segmental details and it is a captive service provider in sofar as Marketing Support Service segment is concerned. This company being Cyber Media is into Advertisement of its wide range of clientele that ... order dated IT(TP)A No. 1695/Bang/2019 Page 13 17/09/2021 wherein this comparable was held to be eliminated in a captive service provider. 5.2.1 On the contrary, the Ld.DR relied on the orders passed by authorities below. 5.2.2 We have perused the submissions advanced by both sides in the light

M/S. Radisys India Limited (Formerly Known As Radisys India Private Limited), Bengaluru vs. Deputy Commissioner of Income Tax, Circle- 5(1)(1), Bangalore

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

ITA 190/BANG/2022[2017-18]Status: DisposedITAT Bangalore18 Nov 2022AY 2017-18
For Appellant: Shri Mahveer C Jain, A.RFor Respondent: Shri Binod Kumar Singh, D.R
Section 143(3)Section 144BSection 144C(13)

Radisys India shall engage in development and support of computer software and marketing support services for its Associated Enterprise. Radisys India is a captive service provider to its Associated Enterprise i.e., Radisys India renders all of its services to its Associated Enterprise. 9. ASSETS EMPLOYED 9.1 Tangible assets During ... needs of customers, cost, pricing lc., IT(TP)A No.190/Bang/2022 M/s. Radisys India Limited, Bangalore Page 13 of 50 Radisys India is a captive service provider to its Associated Enterprise. Radisys India does not provide any service to any other party and it is the Associated Enterprise who assumes market

Global E-Business Operations Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-5(3)(2), Bangalore

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

ITA 174/BANG/2022[2017-18]Status: DisposedITAT Bangalore16 Nov 2022AY 2017-18

Bench: Shri Chandra Poojari & Shri George George K.

For Appellant: Shri Padam Chand Khincha, A.RFor Respondent: Shri Harinder Kumar, D.R
Section 144(3)Section 37Section 92C

Treatment of Service Tax cost in the billing by the Assessee- The ld. A.R. submitted that the Assessee is a captive service provider entity which provide services to its group affiliates outside India on cost plus basis. For the purposes of billing all costs accounted in books are considered ... suggests that the company is engaged in consultancy and management services unlike the Appellant which is involved only in providing ITES as a captive service provider entity. 13.2 Further, Infosys BPO Limited has been excluded in the case of Swiss Re Global Business Solutions India (P.) Ltd. [2022] 137 taxmann.com