Law & Society

Intercontinental Hotels Group (India) Pvt Ltd vs Dy. CIT

View Case

The Hon’ble CIT(A) erred in confirming Apitco Limited, Global Procurement Consultants Limited and TSR Darashaw Limited as alleged comparables to the Appellant, disregarding the significant difference in the functional profile of these companies vis-a-vis the Appellant. The Assessee, an Indian company is incorporated for managing and offering services mainly to the M/s. IHG. The assessee provided Ancillary Management Support Services to M/s. Continent Hotels INC.

The case of the assessee is that Government companies set up for specific purposes and providing services to other Government owned companies and/or entities cannot be held to be functionally comparable to business entities in view of the ratio laid down by the Hon’ble Delhi High Court in Philip Morris. Delhi ITAT found merit in the plea of the assessee as far as its business profile is concerned. The Hon’ble High Court directed that M/s. Apitco Ltd. was not good comparable of concerns providing business support services, on the ground that in case of Government enterprises, profit motive is not relevant consideration and the Government company worked for public undertakings. Further, GPCL has been held to be not comparables in Philips Morris (supra) itself on the ground that the company was established by the Government to provide Ancillary Management Support Services to Government Departments or their agencies. The assessee is also engaged in providing marketing and Ancillary Management Support Services to its AE; hence the concerns, ApitcoLtd. & GPCL being Government concerns are not comparable and the same needs to be excluded from the final list of comparables.

One thought on “Intercontinental Hotels Group (India) Pvt Ltd vs Dy. CIT

Share your thoughts using the comment section below

%d bloggers like this: