[Cites 2, Cited by 0]
Delhi High Court
The Pr. Commissioner Of Income Tax -7 vs Steria India Pvt. Ltd on 12 December, 2025
Author: V. Kameswar Rao
Bench: V. Kameswar Rao
$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision : 12.12.2025
+ ITA 739/2025, CM APPL. 77781/2025
THE PR. COMMISSIONER OF INCOME TAX -7
.....Appellant
Through: Mr. Ruchir Bhatia, SSC with Mr.
Anant Mann, JSC, Mr. P. Gupta, JSC.
versus
STERIA INDIA PVT. LTD.
.....Respondent
Through: Mr. Ajay Vohra, Sr. Adv. with Mr.
Neeraj Jain and Mr. Aniket D.
Agrawal, Advs.
CORAM:
HON'BLE MR. JUSTICE V. KAMESWAR RAO
HON'BLE MR. JUSTICE VINOD KUMAR
V. KAMESWAR RAO , J. (ORAL)
1. This appeal lays a challenge to order dated 17.11.2020 passed by the
learned Income Tax Appellate Tribunal, Bench „1-2‟, New Delhi ("ITAT")
deciding two ITA Nos. being 512 & 511/Del/2016 relating to Assessment
Year ("AY") 2010-11 and 2011-12 respectively.
2. We have been informed by Mr. Ruchir Bhatia, learned Senior
Standing Counsel for the appellant that this appeal is primarily relatable to
upheld the order passed by the Dispute Resolution Panel.
3. We may state that the appellant/Revenue has proposed the following
substantial questions of law for consideration:-
"2.1 Whether the Ld. ITAT erred in not
appreciating that the Arm's Length Price of an
international transaction, as defined in Section
92F(ii) of the Income tax Act, 1961, is the price
applied or proposed to be applied in an
uncontrolled transaction, and consequently must
remain uninfluenced by extraneous factors and
post transaction events like foreign exchange
fluctuation which are likely to materially affect the
actual receipt or payment but do not impact the
price intended to be charged or paid.?
2.2 Whether the Ld. ITAT erred in not appreciating
the fact that the TPO followed the provisions of'
Rule 10B(3) by similarly treating foreign exchange
fluctuation as non-operating cost/revenue of the
tested party as well as of the comparables to
eliminate the differences, thereby leading to a
consistent and reliable basis for comparison?
2.3 Whether in the facts and circumstances of the
case the Ld. ITAT was right in, law in considering
Infosys RPO fit. Ltd. as functionally non
comparable without considering the findings of the
TPO w.r.t the fact that the assessee company is
also enjoying brand name as in the case of the
comparable i.e. BPO Infosys Pvt. Ltd.?
2.4 Whether in the facts and circumstances of the
case the Ld ITAT was right in law in considering
TCS E-Serve International Ltd as functionally non
comparable without considering the findings of the
TPO w.r.t the fact that the assessee company is
also enjoying brand name as in the case of the
comparable.?
2.5 Whether in the facts and circumstances of the
case the Ld. ITAT was right in law in considering
TCS E Serve. as functionally non comparable
without considering the findings of the TPO with
respect to the fact that the assessee company is
also enjoying brand name as in the case of the
comparable i.e. TCS E-Serve?
2.6 Whether in the facts and circumstances of the
case the Ld. ITAT was right in law in considering
Accentia Technologies Ltd. as functionally non
comparable on the ground of amalgamation.
Whether amalgamation of companies should be
treated as an extraordinary event for the purpose
of comparable when functions of the company
remain unchanged?
2.7 Whether in the facts and circumstances of the
case the Ld., ITAT was right in law in considering
Infinite Data System as functionally non
comparable without considering the findings of the
TPO w.r.t the fact that the comparable company
has passed all the appropriate filters applied by
the TPO?
2.8 Whether in the facts and circumstances of the
case the Ld. ITAT was right in law in considering
Persistent Systems as functionally non comparable
on the ground that it is engaged in software
product business and this segment of business is
not the part of the software development services?
Whether the exclusion of the comparable entities
can be sustained as done by the Ld. ITAT without
determining the specific characteristics of the
transactions: FAR (functions performed, assets
deployed and risk assumed) analysis; contractual
terms and market conditions as prescribed in Rule
10B(2) of the 1. T. Act, 1962?"
4. Mr. Bhatia fairly states that the issue, which arises for consideration
in this appeal is covered against the Revenue and in favour of the assessee
on all the proposed substantial questions of law except 2.2. The same are
covered in terms of chart filed. The said chart is reproduced as under:-
Q. Exclusion of Reason for uploading Covered by the
No. Comparable exclusion by ITAT in following decisions
under the Impugned Order
challenge dtd. 17.11.2020
(Annex „I‟,pp. 37-
102)
ITEA Segment
2.3 Infosys BPO Significant brand Revenue‟s appeal
Ltd. Value - following bearing ITA 393/2024
Assessee‟s own for AY 2015-16
case for AY 2015- dismissed by this
16 Hon‟ble Court vide
Order dated
Refer Paras 27-29 29.07.2024
@ pp.50-51 Oracle (OFSS) BPO
Services Pvt. Ltd.
[2019] 416 ITR 54
(Del)
Avaya India (P.) Ltd.
[2019] 416 ITR 638
(Del) AY 2010-11
Evalueserve SEZ
(Gurgaon) Pvt. Ltd.
[ITA 241/2018;
decided on
26.02.2018] (Del)
[AY 2010-11]
Cadence Design
Systems (India)
[2025] 482 ITR (Del)
[AY 2010-11]
2.4 TCS E-Serve Significant brand Revenue‟s appeal
International Value - following bearing ITA 393/2024
Ltd. Assessee‟s own for AY 2015-16
case for AY 2015- dismissed by this
16 in respect of Hon‟ble Court vide
Infosys BPO & Order dated
other decisions of 29.07.2024
this Hon‟ble Court Oracle (OFSS) BPO
Services Pvt. Ltd.
Refer Paras 33-34 [2019] 416 ITR 54
@ pp.53-54 (Del)
Avaya India (P.) Ltd.
[2019] 416 ITR 638
(Del) AY 2010-11
Evalueserve SEZ
(Gurgaon) Pvt. Ltd.
[ITA 241/2018;
decided on
26.02.2018] (Del)
[AY 2010-11]
Cadence Design
Systems (India)
[2025] 482 ITR (Del)
[AY 2010-11]
B.C. Management
Services [2018] 403
ITR 45 (Del)
2.5 TCS E-Serve Significant brand Revenue‟s appeal
Ltd. Value - following bearing ITA 393/2024
Assessee‟s own for AY 2015-16
case for AY 2015- dismissed by this
16 in respect of Hon‟ble Court vide
Infosys BPO & Order dated
other decisions of 29.07.2024
this Hon‟ble Court Oracle (OFSS) BPO
Services Pvt. Ltd.
Refer Paras 41-42 [2019] 416 ITR 54
@ pp.57-58 (Del)
Avaya India (P.) Ltd.
[2019] 416 ITR 638
(Del) AY 2010-11
Evalueserve SEZ
(Gurgaon) Pvt. Ltd.
[ITA 241/2018;
decided on
26.02.2018] (Del)
[AY 2010-11]
Cadence Design
Systems (India)
[2025] 482 ITR (Del)
[AY 2010-11]
B.C. Management
Services [2018] 403
ITR 45 (Del)
2.6 Accentia Extra-ordinary Evalueserve SEZ
Technologies event (Gurgaon) Pvt. Ltd.
Ltd. (amalgamation) [ITA 241/2018;
during the year decided on
Owns significant 26.02.2018] (Del)
intangible assets [AY 2010-11]
Functional Profile: Equant Solutions India
Medical (P.) Ltd. [2020] 113
Transcription taxmann.com 517
Services and No (P&H) [AY 2010-11]
Segmental Data
Refer: Paras 51-56
@ pp. 62-65
Software / IT Services Segment
2.7 Infinite Data Functional Profile: Xchanging
Systems Ltd. Development of Technology Services
Software, provision India Pvt. Ltd. [ITA
of technical 553/2019; decoded pm
services, 03.07.2019] (Del)
Extra-ordinary [AY 2010-11]
event Mentor Graphics
(amalgamation) (India) Pvt. Ltd. [ITA
during the year 126/2022; decided on
Significant related 26.04.2022] (Del)
party transactions [AY 2010-11]
Refer: Paras 92-96
@ pp. 83-87
2.8 Infosys Significant brand Revenue‟s appeal
Technologies value bearing ITA 393/2024
Ltd. Functional Profile: for AY 2015-16
2.8 Wipro Engaged dismissed by this
Technologies Development of Hon‟ble Court vide
Ltd. Software products Order dated
29.07.2024 on the
Refer: Paras 115- similar issue of
117 @ pp. 96-97 Infosys BPO
Open Solutions
Software Services (P)
Ltd. [2020] 315 CTR
497 (Del) [AY 2010-
11]
Cashedge India Pvt.
Ltd. [ITA 279/2016;
decided on
04.05.2016] (Del)
[AY 2010-11]
Microsoft India
(R&D) (P.) Ltd.
[2021] 431 ITR 483
(Del) [AY 2010-11]
2.9 Persistent Functional Profile: Open Solutions
Systems Ltd. R&D, engineering Software Services (P)
services - No Ltd. [2020] 315 CTR
Segmental Data 497 (Del) [AY 2010-
Outsourcing of 11]
work Cashedge India Pvt.
Ltd. [ITA 279/2016;
Refer: Paras 122- decided on
123 @ pp.98-99 04.05.2016] (Del)
[AY 2010-11]
Microsoft India
(R&D) (P.) Ltd.
[2021] 431 ITR 483
(Del) [AY 2010-11]
Mentor Graphics
(India) Pvt. Ltd. [ITA
126/2022; decided on
26.04.2022] (Del)
[AY 2010-11]
5. Insofar as question no. 2.2 is concerned, the same is covered by the
judgment of this Court in Pr. Commissioner of Income Tax Delhi-I v.
Ameriprise India Pvt. Ltd., ITA No. 206/2016 decided on 23.03.2016.
6. According to Mr. Vohra, the same relates to treating foreign exchange
fluctuation as operating cost/revenue. It is his submission that even the TPO
has considered the same as operating cost/revenue. This Court in the
aforesaid judgment has stated as under:-
"2. This appeal by the Revenue is directed against
the order dated 14th August, 2015 passed by the
Income Tax Appellate Tribunal (ITAT) in ITA
No.2010/Del/2014 for the Assessment Year („AY‟)
2009-10.
3. The question sought to be urged by the Revenue
is whether the ITAT was correct in directing the
foreign exchange gain/loss to be considered as an
item of operating revenue/cost?
4. The ITAT has in the impugned order noted the
fact that the foreign exchange gain earned by the
Assessee is in relation to the trading items
emanating from the international transactions.
Since the foreign exchange loss directly resulted
from trading items, it could not be considered as a
non-operating loss. Further, it is noted by the
Dispute Resolution Panel that the service
agreement between the Associated Enterprise (AE)
and the Assessee stated that for the specified
products and services provided by the Assessee, it
"shall raise invoices on Ameriprise USA on the
basis of a cost plus pricing methodology." The
ITAT was therefore right in holding that the AO
was not justified in considering the foreign
exchange loss as a non-operating cost.
5. Additionally, it is pointed out by Mr Deepak
Chopra, learned counsel for the Assessee, that for
the subsequent AYs an Advance Pricing Agreement
has been entered into between the Assessee and the
Central Board of Direct Taxes under Section
92CC of the Act on 22nd January 2016
whereunder the aforementioned 'cost plus pricing
methodology' has been implicitly accepted.
Therefore, in the facts of the present case, the
Court is of the view that no substantial question of
law arises.
6. The appeal is dismissed."
7. For parity of reasons, even this question would not arise for
consideration in this appeal.
8. Additionally, we find that there is a delay of 1265 days in re-filing the
appeal. We are also not inclined to interfere with the order of the ITAT on
this ground as well.
9. The appeal along with pending application is, accordingly, dismissed.
V. KAMESWAR RAO, J
VINOD KUMAR, J
DECEMBER 12, 2025/sr
