Case Number: ITA 423/DEL/2019
Appellant: FIS Global Business Solutions India Pvt. Ltd., New Delhi
Respondent: DCIT, Circle-11(1), New Delhi
Assessment Year: 2010-11
Case Filed On: 2019-01-21
Order Type: Final Tribunal Order
Date of Order: 2020-06-18
Pronounced On: 2020-06-18
FIS Global Business Solutions India Pvt. Ltd., a New Delhi-based company, filed an appeal against the orders of the Commissioner of Income-tax (Appeals)-43, New Delhi, concerning the assessment year 2010-11. The primary dispute was over the transfer pricing adjustments made by the Assessing Officer (AO) and the Transfer Pricing Officer (TPO).
The case was heard by the Delhi Bench ‘I-1’ of the Income Tax Appellate Tribunal (ITAT), with Shri R.K. Panda, Accountant Member, and Shri Kuldip Singh, Judicial Member, presiding. The appellant was represented by Shri Vishal Kalra, Advocate, while the respondent was represented by Ms. Shashi Kajle, Senior Departmental Representative (DR).
The appellant raised several grounds, challenging the adjustments made to its income by the AO/TPO/CIT(A). The primary contentions were:
The Tribunal noted that the appellant had entered into an APA with the CBDT, which covered the financial years 2010-11 to 2013-14 (rollback years) and 2014-15 to 2018-19 (APA term). The APA specified an ALP of 16.60% for the relevant transactions, while the appellant’s margin for the year under consideration was 19.26%, higher than the APA-agreed margin.
The Tribunal observed that the APA, although not specifically applicable to the assessment year 2010-11, had persuasive value given the consistency in the Functions, Assets, and Risks (FAR) profile of the appellant over the years. The Tribunal relied on precedents such as the cases of PCIT vs. Ameriprise India Pvt. Ltd. and Spencer Stuart (India) Pvt. Ltd. vs. ACIT, where APAs were considered relevant for determining ALP in non-APA years.
The Tribunal concluded that the transfer pricing adjustments made by the AO/TPO/CIT(A) were not sustainable, as the appellant’s margin was within the acceptable range agreed upon in the APA. Consequently, the Tribunal ordered the deletion of the transfer pricing adjustments, subject to verification of the appellant’s margin computation as per the APA.
The appeal filed by FIS Global Business Solutions India Pvt. Ltd. was allowed, and the transfer pricing adjustments made by the AO/TPO/CIT(A) were deleted. The Tribunal’s decision emphasized the relevance of APAs in determining ALP for years not explicitly covered by the agreements, promoting consistency and reducing litigation.
For more information on similar cases and legal precedents, visit the official website of the Income Tax Appellate Tribunal of India.
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