The Pr. Commissioner Of Income Tax -9 Vs. Wsp Consultants India Pvt. Ltd.
November, 09th 2017
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 03.11.2017
+ ITA 935/2017
THE PR. COMMISSIONER OF INCOME TAX -9 ..... Appellant
WSP CONSULTANTS INDIA PVT. LTD. ..... Respondent
Advocates who appeared in this case:
For the Appellant : Mr. Ruchir Bhatia, Adv.
For the Respondent : Mr. Kamal Sawhney and Mr. Shikhar Garg and
Mr. Prashant Maherchandani, Advs
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE SANJEEV SACHDEVA
S. RAVINDRA BHAT, J. (OPEN COURT)
CM No. 39550/2017 (condonation of delay)
For the reasons stated in the application, the delay in filing the
appeal is condoned. Application is disposed of.
1. The Revenue's appeal urges that the impugned order to the
extent it excluded three comparables in ALP determination, of the
assessee's income, is erroneous.
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2. The assessee is subsidiary of Cyprus based company and is a
global business provider involved in design, engineering, management
consultancy services across the built and nature environment
worldwide. It provides the services to transform the built environment
and restore the natural environment and its expertise in the relative
3. The brief facts of the case are that the assessee provides design
and engineering services to private environment transporter and
infrastructure sectors, its subsidiary Cyprus based entity which
engages itself in these and other related activities.
4. The TPO, who had to consider the report filed by the assessee
for ALP determination, took into consideration 16 comparables and
derived the ALP bringing to tax a sum of Rs. 6,55,34,938/-. The DRP
to which the assessee appealed, deleted 7 comparables and at the same
time included 7 more. After giving effect to the DRP's direction, final
adjustments of RS. 3,87,54,545/- was made by the AO.
5. Being aggrieved the assessee filed an appeal challenging
inclusion of 3 comparables i.e. Ashok Leyland Projects Services Ltd.,
Kitco Ltd. and Mitcon Consultancy & Engineering Services Ltd., the
ITAT upheld the assessee's contentions.
6. As far as the first comparable - Ashok Leyland Projects
Services Ltd. is concerned, the ITAT was of the opinion that the major
part of the Revenue derived was from wind energy segment and
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secondly that during the relevant year there was an extraordinary
event being merger of ALPSL with Ashok Leyland Wind Project
Services Ltd. and another company which presented a clear possibility
of differential advantage.
7. With respect to M/s Kitco Ltd. the Tribunal held that it was a
substantial government undertaking and prominent business was from
government entity. So far as Mitcon Consultancy & Engineering
Services Ltd. was concerned, the Tribunal noticed that less than 75%
of revenue derived by this entity was from consultancy services.
Besides it is also engaged in diversified activities such as training and
engaging in laboratories and research etc.
8. We have heard the counsel for the Revenue who urges that the
rationale for exclusion of three comparables which were high income
entities is unpersuasive.
9. This Court is of the opinion that the rationale that Ashok
Leyland was deriving major part of its revenue from wind energy
segment and that there was an extraordinary event of merger and
likewise M/s Kitco Ltd. deriving income from government entity and
Mitcon Consultancy & Engineering Services Ltd, is deriving less than
75% revenue from consultancy services, is a reasonable basis for their
10. Any inclusion or exclusion of comparables per se cannot be
treated as a question of law unless it is demonstrated to the Court that
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the Tribunal or any other lower authority took into account irrelevant
consideration or excluded relevant factors in the ALP determination
that impact significantly.
11. In the present case, we find no such error. Consequently, the
appeal is without merits and is, therefore, dismissed.
S. RAVINDRA BHAT
NOVEMBER 03, 2017
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