IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘I-1’, NEW DELHI Before Ms. Suchitra Kamble, Judicial Member Dr. B. R. R. Kumar, Accountant Member (Through Video Conferencing)

ITA No. 443/Del/2021 : Asstt. Year : 2016-17

Date of Hearing: 12.08.2021 Date of Pronouncement: 02.11.2021

ORDER

Per Dr. B. R. R. Kumar, Accountant Member:

The present appeal has been filed by the assessee against the order dated 26.03.2021 passed by the AO u/s 143(3) r.w.s.

144C(13) of the Income Tax Act, 1961.

2. The Group’s parent company, COWI Holding A/S, is a Danish public limited liability company owned by COWI Fonden (COWI foundation) and present and former employees. COWI A/S is one of the largest private Infrastructure Consultancy and mapping and surveying company in Europe covering a wide range of activities in the field of engineering, environmental science and economics. COWI A/S's services range from professional advice on a particular problem to comprehensive planning and total engineering design of large-scale projects.

Its clients include international funding agencies, public utility companies, and industrial and commercial companies.

3. COWI India Private Limited (formerly known as Kampsax India Private Limited) was established in 1994 as a subsidiary of Kampsax A/S. In 2002, upon acquisition of Kamsax A/s by COWI A/S, COWI India became a member of the COWI Group - an international consulting group working world-wide with engineering, environmental science and economics. COWI India operates under two major segments i.e. Engineering Design services and Mapping services.

4. The issue before us concerns to “Mapping Segment” only.

The process is as under:

The AEs enter into a contract with third parties for providing digital mapping services. After obtaining the contract, if it so requires, the AEs initiate the process of digital mapping by taking aerial photographs and data of the specified area through aircrafts owned by it. These photographs are then developed into images and are sent to COWI India along with specifications via electronic medium for processing. During the year under consideration the functional profile of COWI India was limited to processing the images sent by the AEs. This activity was done by COWI India as per the directions and under instructions of COWI A/S. After receiving the images, COWI India undertakes the following steps for processing the digital images. After the broad parameters are defined, COWI India ensures error free images. Final maps are prepared through Photogrammetry department in which the output is obtained in 3D and 2D images. In order to conduct the above activities COWI India receives requisite training as well as software tools from COWI A/S. The AEs download the maps on their server to ascertain whether maps are prepared as per the specification and quality required by the client. Thus, functions of COWI India are limited to converting aerial images to readable format.

Issue of Comparables:

5. The assessee has objected to selection of two comparables namely, Infosys BPM Ltd., Dun & Bradstreet Technology & Data Services Pvt. Ltd and Nihilent Analytics Limited.

Infosys BPM Ltd.:

6. At the outset, it was argued that the comparable domain and people management expertise. Infosys BPO is backed by the parent Infosys Technologies Limited to offer an integrated IT-BPO delivery model designed for 'one stop shop' solution model which helps managing the entire outsourcing operational chain of IT and process management services. BTS, the process consulting arm of Infosys BPO, drives end-to-end transformation for clients worldwide. BTS focuses on a few critical drivers that derive maximum impact on business KPIs and accelerate the business benefits for