Income Tax Appellate Tribunal Delhi Clear2Pay India Pvt. Ltd., Gurgaon vs Ito, New Delhi on 22 June, 2018 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH 'I2' : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER and SHRI KULDIP SINGH, JUDICIAL MEMBER ITA No.2788/Del./2017 (ASSESSMENT YEAR : 201112) M/s. Clear 2 Pay India Pvt. Ltd., vs. ITO, Ward 6 (2), (Earlier known as New Delhi. ISIS Infotech Solutions Pvt. Ltd.) House No.WZ4A, Nangli Jalib B 1, Janakpuri, New Delhi 110 002. (PAN : AABCI3023R) ITA No.2744/Del./2017 (ASSESSMENT YEAR : 201112) ITO, Ward 6 (2), vs. M/s. Clear 2 Pay India Pvt. Ltd., New Delhi. (Earlier known as ISIS Infotech Solutions Pvt. Ltd.) House No.WZ4A, Nangli Jalib B 1, Janakpuri, New Delhi 110 002. (PAN : AABCI3023R) ITA No.594/Del./2017 (ASSESSMENT YEAR : 201213) M/s. Clear 2 Pay India Pvt. Ltd., vs. DCIT, Circle 10 (2), (Earlier known as New Delhi. ISIS Infotech Solutions Pvt. Ltd.) House No.WZ4A, Nangli Jalib B 1, Janakpuri, New Delhi 110 002. (PAN : AABCI3023R) (APPELLANT) (RESPONDENT) 2 ITA No.2788/Del./2017 ITA No.2744/Del./2017 ITA No.594/Del./2017 ASSESSEE BY : Shri Manoneet Dalal, AR Shri Yishu Goel, AR Shri Chirag Aggarwal, CA REVENUE BY : Shri Sanjay Kumar Yadav, Senior DR Date of Hearing : 29.05.2018 Date of Order : 22.06.2018 ORDER PER KULDIP SINGH, JUDICIAL MEMBER : Present cross appeals filed by the assessee as well as by the revenue are being disposed of by way of consolidated order to avoid repetition of discussion. 2. Appellant, M/s. Clear 2 Pay India Pvt. Ltd. (for short 'the taxpayer'), by filing the present appeal (ITA No.2788/Del/2017 AY 201112) sought to set aside the impugned order dated 08.04.2015, passed by the AO under section 144C read with section 143 (3) of the Incometax Act, 1961 (for short 'the Act') qua the assessment year 201112 in consonance with the orders passed by the ld. CIT (A)/TPO on the grounds inter alia that : "1. That on the facts and in the circumstances of the case, the order passed by the Learned Assessing Officer ("Ld. AO") is bad in law and void abinitio. 2. That on facts and circumstances of the case and in law, the reference made by the Ld. AO suffers from jurisdictional error as the Ld. AO did not record any reasons in assessment order based on which he reached the conclusion that it was "expedient and necessary" to refer the matter to the Ld. Transfer Pricing Officer ("Ld. TPO") for computation of the arm's length 3 ITA No.2788/Del./2017 ITA No.2744/Del./2017 ITA No.594/Del./2017 price, as is required under section 92CA (1) of the Income Tax Act, 1961 ("Act"). 3. That on facts and circumstances of the case and in law, the Ld. AO/ Ld. TPO/ Hon'ble Commissioner of Income Tax (Appeals) ("CIT(A)") erred in making an addition to the returned income of the Appellant by recomputing the arm's length price of the international transactions under section 92 of the Act. 4. The Ld. AO/ Ld. TPO/ CIT(A) erred in not accepting the quantitative filters selected by the Appellant in its Transfer Pricing Documentation/ fresh search and has instead applied his own additional/ quantitative filters which lacked valid and sufficient reasoning. 5. The Ld. AO/ Ld. TPO/ CIT(A) erred in rejecting the comparable companies set adopted by the Appellant in its Transfer Pricing Documentation/ fresh search. 6. The Ld. AO/ Ld. TPO/ CIT(A) erred in accepting companies which were functionally not comparable to the Appellant in terms of Functions, Assets and Risk profile. 7. The Ld. AO/ Ld. TPO/ CIT(A) erred in not providing the benefit of economic adjustment on account of difference in working capital position of Appellant visavis comparable companies, in arriving at the arm's length margin. 8. The Ld. AO/ Ld. TPO/ CIT(A) erred in not providing the benefit of economic adjustment on account of difference in risk profile of Appellant visavis the comparable companies, in arriving at the arm's length mean margin. 9. The Ld. AO/ Ld. TPO/ CIT(A) erred in compu