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| The Tax Publishers2020 TaxPub(DT) 3698 (Bang-Trib) INCOME TAX ACT, 1961
Section 92C
Infosys BPO Ltd. was predominantly engaged into areas like Insurance, Banking, Financial Services, Manufacturing and Telecom, which were in the niche areas, unlike assessee. Further, Infosys BPO Ltd. being a subsidiary of Infosys had an element of brand value associated with it and in order to maintain brand image, the company incurred substantial selling and marketing expenditure, whereas assessee being a contract service provider did not incur such expenses. Hence, there could be no comparability analysis.
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Transfer pricing - Determination of ALP - Selection of comparables - Significant brand value and functional dissimilarity
Assessee rendered IT-enabled services to its AE abroad. TPO considered Infosys BPO as comparable to assessee's case. Held: Infosys BPO Ltd. was predominantly engaged into areas like Insurance, Banking, Financial Services, Manufacturing and Telecom which were in the niche areas, unlike assessee. Further, Infosys BPO Ltd. being a subsidiary of Infosys had an element of brand value associated with it and in order to maintain brand image, the company incurred substantial selling and marketing expenditure, whereas assessee being a contract service provider did not incur such expenses. Hence, there could be no comparability analysis.
Followed:VWR Lab Products Pvt. Ltd. v. ACIT, (2020) 116 taxmann.com 244.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2012-13
INCOME TAX ACT, 1961
Section 92C
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