Inter Continental Hotels Group (India) Pvt. Ltd. Vs ACIT, Circle-1(1), Gurgaon

Parties Involved

Facts Summary

The assessee, Inter Continental Hotels Group (India) Pvt. Ltd., is engaged in providing hotel management services and IT enabled services to third-party hotels in India. During the financial year 2017-18, the assessee entered into several international transactions. The Transfer Pricing Officer (TPO) considered most transactions to be at arm’s length except for two specific transactions related to support services and IT enabled support services. The assessee challenged the proposed enhancement of income by the TPO, alleging errors in the economic analysis and selection of comparable companies. After the Dispute Resolution Panel (DRP) directions, adjustments were made in the final assessment order. The assessee further filed a rectification application, leading to revised adjustments. The assessee is now in appeal before the Tribunal, raising multiple grounds concerning the enhancement of income, violations of natural justice, and the disallowance of employees' contributions to Provident Fund and Labour Welfare Fund.…

Legal Issues

• 1. Enhancement of income by the Assessing Officer (AO)
• 2. Violation of provisions of section 144B of the Act and principles of natural justice
• 3. Passing of order beyond the timeline given under section 144C of the Act
• 4. Rejection of economic analysis and selection of non-comparable companies by the TPO
• 5. Error in not giving effect to the revised TP order dated 24th February, 2023
• 6. Disallowance of employees' contribution to PF and LWF

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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