Pr. Commissioner Of Income Tax v. Fiserv India P. Ltd

$~1 * IN THE HIGH COURT OF DELHI AT NEW DELHI+ ITA 602/2016 & CM No. 30032/2016 PR. COMMISSIONER OF INCOME TAX ..... Appellant Through: Mr. Rahul Chaudhary, Advocate. versus FISERV INDIA P. LTD. ..... Respondent Through: Mr. Sachit Jolly, Advocate along with Mr. Gautam Swarup, Advocate. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MS. JUSTICE DEEPA SHARMA O R D E R% 07.10.2016 The revenue in this appeal urges two substantial questions of law. The first pertains to exclusion of two comparables i.e. M/s Infosys Ltd. and M/s. Persistent Systems Ltd. The second question urged is the treatment of foreign exchange gain or loss in the transfer price determination of ALP. It is urged that foreign exchange gain or loss, as the case may be, has to be included. Learned counsel appearing on the advance notice urges that the assessee is engaged in the business of software development. He supports the conclusions of the ITAT with respect to the exclusion of two comparables in question and highlights that M/s Infosys Ltd. is engaged not merely in software development both offsite and onsite and that it receives the substantial revenues on account of onsite –software financial development the activity which the assessee does not carry out. It is also submitted that besides this, the other distinguishing factor vis-a-vis that M/s Infosys Ltd. is that concern also owns brand intangibles- an advantage which the assessee does not possess. Lastly, the assessee is captive as opposed to status of M/s Infosys Ltd. With respect to M/s Persistent Technologies, it is pointed out that in a previous order in ITA No. 279/2016 dated 04.05.2016 (Principle Commissioner of Income Tax vs. M/s Cashedge India Pvt. Ltd)held that having regard to the rules i.e. Rule 10 B to 10 E of Income Tax Rules, the data of M/s Persistent Systems Ltd- could not have been included. Here, it is urged that the assessee is also a member of the Cashedge India group and is engaged in same and identical business. The AY also coincides with that of assessee i.e. AY 2010-2011. For these reasons, we are of the opinion that no substantial question of law arises on the first issue urged. As far as the second question i.e. foreign exchange gain or loss is concerned, the ITAT was of the opinion that the reliance upon the Safe Harbour Notification dated 18.09.2013 was not appropriate since having regard to the fact that the Rule was introduced prospectively and could not have been applied to AY 2010-2011. The assessee also relies upon the decision in the previous order for the AY 2009-20010 in ITA No. 17/2016 (Pr. Commissioner of Income Tax-3 vs. Fiserv India Pvt. Ltd.) where the identical question was settled in its favour. For this reason too, the second question urged does not arise. In view of the above discussion, no substantial questions of law arise. The appeal is therefore dismissed. S. RAVINDRA BHAT, J OCTOBER 07, 2016 sapna DEEPA SHARMA, J