Amicus > New Delhi, India > Firm Profile

Amicus
I-1 Jangpura Extension New Delhi – 110014
India

India > Tax Tier 3

Transfer pricing litigation is the hallmark of Amicus‘s tax department and practice head Ashutosh Mohan Rastogi is one of the country’s leading figures in this field. He also regularly appears at the New Delhi High Court in a range of contentious tax matters, drawing on over 15 years’ experience. He works between the firm’s offices in New Delhi and Noida; senior associate Garvit Gosain in the latter location provides key support.

Practice head(s):

Ashutosh Mohan Rastogi

Other key lawyers:

Key clients

De Diamond India

Angus Dundee India Private Limited

Work highlights

  • Acted for De Diamond India in a transfer pricing dispute with the tax tribunal.
  • Advised a Germany-based logistics company on a transfer pricing case before the Transfer Pricing Officer (TPO) and secured a favourable transfer pricing order.
  • Acted for Angus Dundee India in challenging the investigation by a branch of the tax department known as the Special Valuation Branch (SVB).

About the firm: Amicus Services is a leading multi-dimensional full service Indian law firm, providing solution and decision-oriented advice to clients. We provide specialized recourses by thinking ahead and finding the most relevant and tailored solutions for our clients.

The firm has its presence in New Delhi, Noida and Mumbai and a strong network of local counsels across India and a global alliance with international law firms.

We have established capabilities to render services across the globe.
Our commitment to quality and client interest has earned us our place in leading international guides such as India Business Law Journal, The Legal 500, Asialaw , Benchmark, Asia Legal Business, ITR, IFLR, Business World, to name a few.

The firm’s core areas of practice are Fintech, corporate and structured finance, real estate, venture capital and PE, dispute resolution, insolvency and tax.

Key contacts
Shivi Rastogi, co-founder and heads – Corporate commercial  and Fintech practice.

Ashutosh Mohan Rastogi, co-founder and heads – Tax practice .

Madhav Rastogi, partner – Real estate and corporate structuring practice.

Kinshuk Chatterjee, partner – Dispute resolution, insolvency and arbitration practice.

DepartmentNameEmailTelephone
Tax, GST &; Transfer Pricing Ashutosh Mohan Rastogiashutosh@amicusservices.in+91 9818084707
M&A ; Private Equity; Corporate Finance & Fintech Shivi Rastogishivi@amicusservices.in+91 9999775630
Corporate Finance; Regulatory & Real Estate Madhav Rastogimadhav@amicusservices.in+91 9818117517
Litigation & Disputes Resolution; Insolvency and Arbitration Kinshuk Chaterjeekinshuk@amicusservices.in+91 8744911519
PhotoNamePositionProfile
Kinshuk  Chaterjee photoMr Kinshuk ChaterjeePartner
Yogesh Chaudhry photoMr Yogesh ChaudhryPartner
Madhav  Rastogi photoMr Madhav RastogiPartner
Shivi  Rastogi photoMs Shivi RastogiCo-Founder & Heads – Corporate Commercial and Fintech practice.
Ashutosh Mohan Rastogi photoMr Ashutosh Mohan RastogiCo-founder and Heads – Tax practice
English (fluent)

1. Pyramid IT Consulting India Pvt. Ltd v. ACIT Circle 20(1) ITA No. 7083/Del/2014

Nature of Work:- Transfer Pricing Litigation (Tax Tribunal, Delhi)

Work Description:- In a landmark win, Amicus succeeded in deleting/ quashing the entire Transfer Pricing adjustment with respect to the software services segment at Income Tax Appellate level for Pyramid IT Consulting – a software service provider. Legal submissions made before the Tax Tribunal comprised of Transfer Pricing and Economic Arguments against inappropriate benchmarking of Indian Captive’s profitability by Tax Department relying on a comparables’ set that comprised of companies owning software products and intangibles and having a different functional profile.

Why Important:- On the basis of detailed submissions and arguments put forward by the Arguing Counsel, Mr. Ashutosh Mohan Rastogi, the Delhi Tax Tribunal ruled in favour of the client and the transfer pricing adjustment on account of inclusion / exclusion of inappropriate comparables was set aside. Though we had received the relief for software services, however, Tax Tribunal committed mistake apparent on face of record made in case of staffing services segment against which Amicus filed a miscellaneous application for correction.

2. Pyramid IT Consulting India Pvt. Ltd v. ACIT Circle 20(1) M.A No. 632/Del/2018

Nature of Work :-Transfer Pricing Litigation (Tax Tribunal)

Work Description:- In an important win, Amicus Services succeeded in pointing out the mistake apparent on face of record that had crept into the ITAT order in a Miscellaneous Application. The Arguing counsel pointed out that during the hearing it was communicated to the Tribunal about the exclusion of 5 comparables based on which TPO/DRP/AO had benchmarked the international transaction. However, the bench had adjudicated only on 4 comparables, leaving behind one. Therefore, non-adjudication of one comparable (Larsen & Turbo Infotech Ltd.) constituted a mistake apparent on the face of record.

Why Important:- Based on the Counsel’s arguments, the Tax Tribunal partially accepted the mistake and directed to exclude the impugned comparable stating that the same is functionally different and cannot be compared with that of assessee. However, Tribunal still did not provide complete relief and therefore, client moved the High Court (through Amicus)

3. Pyramid IT Consulting India Pvt. Ltd v. ACIT W.P.(C) 5198/2019

Nature of Work – Transfer Pricing Litigation- Appeal and Writ Petition (Delhi High Court)

Work Description:- Amicus filed an appeal and represented client before Delhi High Court. Revenue argued that the appeal is not maintainable since mere exclusion or inclusion of a comparable for the purpose of Transfer Pricing Adjustment does not give rise to any ‘substantial question of law’.

On the basis of arguments and submissions made by Amicus, Delhi High Court disagreed with the revenue and noted that it is correct that mere exclusion or inclusion of a comparable may not per se give rise to any substantial question of law but in the present case there was only one comparable on the basis of which the Transfer Pricing Adjustment had been recommended and other two of assessee’s comparables had been excluded – therefore there was a ‘substantial question of law’ on the specific facts of the case.

The Court noted that ITAT overlooked Assessee’s objections to inclusion of HCCA which undertook payroll processing services in contrast to staffing services provided by assessee. The difference in functionality of the Assessee and the comparable (HCCA) was not discussed by ITAT.

Accordingly, the Court granted relief in favour of the assesse

Why Important:- The High Court Order assumes significance in light of recent High Court Judgments (Karnataka Chennai and Delhi) and holding that no question of law arises in case of inclusion or exclusion of comparables. The impact of the ruling of the Hon’ble Karnataka High Court in the case of M/s Softbrands India Private Limited has been visible – as a large chunk of appeals on Transfer Pricing issues (involving comparability) have been dismissed following this landmark ruling. In consequence of the Karnataka and Chennai High Court Rulings, hundreds of special leave petitions have piled up in Supreme Court of India on the common issue of ‘Substantial Question of Law’. The Delhi High Court Order in case of Pyramid IT Consulting constitutes an exception on its specific facts as the High Court admitted that a Substantial Question of Law arose even though the case involved adjudication on accept-reject of comparables. The Pyramid High Court Appeal therefore is especially important as it constitutes the first exception to the above rule and shall pave the way for more Transfer Pricing matters being admitted to High Court.

4. Cinestaan Entertainment P.Ltd. v. ITO I.T.A. No.8113/DEL/2018

Nature of Work – Income Tax Matter relating to Share Valuation (Angel Tax) (Delhi Tax Tribunal). Amicus acted as the briefing counsel in this matter.

Work Description:- Angel tax is tax on amount a company receives towards issue of shares premium tax over and above the Fair Market Value of shares as determined by a Merchant Banker valuer through valuation report. The law was enacted to discourage the generation and use of unaccounted money through subscription of shares of a closely held company.

However, the provision witnessed some unintended effects. After the introduction of the above deeming provision, the Income Tax Department issues notices to many start-ups levying Angel Tax u/s 56(2) (viib), creating a sense of panic in the start-up fraternity.

Recently, Amicus succeeded in deleting the entire tax demand on issuance of share at premium under section 56(2)(viib) of Income Tax Act, which tends to be a modern milestone in “Income Tax Jurisprudence” and rarity in itself. The decision addresses in depth, the objective of the provision, the conditions, expertise over a valuation report, efforts made by our clients, commercial wisdom of investors and startups, interpretation of deeming provision etc. Below are the major observations of Tribunal:-

  • Section 56(2) (viib) is a deeming provision. If statute provides that the valuation has to be done as per the prescribed method and if one of the prescribed methods has been adopted by the assessee, then Assessing Officer has to accept the same.
  • The valuation projections are based on various factors. These factors are considered based on some reasonable approach and they cannot be evaluated purely based on arithmetical precision as value is always worked out based on approximation and catena of underline facts and assumptions.
  • At the time when valuation was undertaken, it is based on potential value of business at that particular time and also keeping in mind underlying factors that may change over a period of time.
  • Income tax department or revenue officials cannot determine in which manner business has to be undertaken. Commercial expediency has to be seen from the point of view of businessman.

On the basis of above, the entire tax demand was deleted.

Why Important:- In the last couple of years, there has been a wave of angel investment taxation in India creating panic amongst start-ups and angel investors as the Government is invoking certain draconian provisions to deem capital receipts as income. The angel tax controversy in India has been widely reported in the news with experts and taxpayers criticizing the high handed approach of the Indian Tax Department towards start-ups which require angel funding to survive and grow. Following are the links which reported the controversy over Angel Tax: https://economictimes.indiatimes.com/news/et-explains/angels-demon-decoding-the-tax-row-thats-making-startups-nervous/articleshow/67914626.cms?from=mdr , https://www.businesstoday.in/opinion/columns/angel-tax-many-issues-still-need-to-be-ironed-out/story/338407.html

In the case of Cinestaan Entertainment Private Limited, Amicus succeeded in deleting the entire tax demand on issuance of share at premium under section 56(2)(viib) of Income Tax Act – the decision itself is a modern milestone in “Income Tax Jurisprudence” on Angel Taxation as it addresses all and sundry issues pertaining to share valuation ranging from the objective of the valuation provisions, the conditions for applicability, role of valuer, relevance of hindsight in valuation as well role of Tax Officer in questioning commercial wisdom of investors and start-ups, interpretation of deeming provision etc. The landmark ruling which is now publicly available in public domain (https://racolblegal.com/no-addition-under-s-562viib-for-issue-of-shares-at-a-premiumangel-tax/) shall provide guidance to other investors/ multinational companies in India grappling with the complex issue of Angel Tax.

5. De Diamond Electric India Pvt. Ltd. ITA 1401/2018

Nature of Work:- Transfer Pricing Litigation (Delhi High Court)

Work Description – The fundamental issue before the Tribunal was whether manufacturing and trading constituted same or separate business. Keeping in view arguments based on facts and judicial precedents, Tribunal ruled that manufacturing was merely an extension of trading business as there was unity in command and control, single set of audited financial statements, common product and customer for the trading and manufacturing activity. Hence, all expenses incurred in setting up of manufacturing unit were to be allowed even if there were no sales from manufacturing activity and different business segments had been drawn up for Transfer Pricing Benchmarking. The Tax Department challenged the ruling of the Tribunal before the High Court.

Why Important:- On the basis of detailed submissions and arguments, Amicus was able to secure a favourable order for the client from High Court. Tax Relief to the client was to the tune of USD 495,916.21. Amicus pointed out to the tax department that even if tax adjustment was made there would not be any additional tax demand due to the brought forward losses. The appeals in High Courts shall not be filed where tax effect does not exceed USD 71707. 50. Keeping in view the low tax effect High Court dismissed the appeal by Department on the same ground.

6. M/s Corbus (India) Pvt. Ltd. V. DCIT ITA No. 2745/Del/2015

Nature of Work:-Transfer Pricing Litigation (Tax Tribunal)

Work Description:- In a significant win, Amicus succeeded in deleting/ quashing the entire Transfer Pricing adjustment on Receivables at Income Tax Appellate level for Corbus (India) Pvt. Ltd. In the instant case, the revenue re-characterized the debit balances i.e. Outstanding Receivables in excess of 45 days as ‘loans’ advanced to AE and applied an ad hoc interest rate.

Why Important:- Based on appellant’s arguments, Tribunal held:

  1. No interest can be imputed on receivables if a favorable working capital adjustment has been undertaken. Tribunal Relied upon Delhi High Court Decision in Kusum Healthcare.
  2. Tribunal noted that assessee followed a uniform policy of not charging an interest on receivables from AEs and Non AEs.
  3. There was no additional cost to assessee on account of receivables as assessee was a debt free company and was not pay interest on loans taken for working capital purpose.

On the basis of detailed submissions and arguments put forward by Arguing Counsel Mr. Ashutosh Mohan Rastogi, the Tax Tribunal ruled in favour of the client and the entire tax liability as determined by the lower authority was deleted.

7. Astra Business Services P. Ltd. ITA No. 1171/Del/2015

Nature of Work:- Transfer Pricing Litigation (Tax Tribunal)

Work Description:- In an important win, Amicus succeeded in defending the revenue’s appeal against the order of Dispute Resolution Panel at Income Tax Appellate level for Astra Business Services P. Ltd. Legal submissions made before the Tax Tribunal comprised of Transfer Pricing and Economic Arguments against inappropriate benchmarking of Indian Captive’s profitability by Tax Department relying on a comparables’ set that comprised of companies with incomparable turnover, brand value and functional differences vis-a-vis the assesse

Why Important:- Based on counsel’s arguments, the Tax Tribunal dismissed the appeal filed by Revenue and held:-

  • Infosys has a substantially high turnover of Rs.1126 crores, whereas TCS has a turnover of Rs.1359.41 crores, which is approximately 133 and 131 times respectively to the turnover of the assessee for ITES services at Rs.10.38 crores.
  • Infosys is a huge brand and naturally will be having leverage on the brand value. Also, it is engaged in multiple segments with several verticals offering process management solutions.

TCS E-Serve commands a huge goodwill and recognition associated with the brand leading to higher volume of business and premium pricing. Also, no segmental financials are available and there is no bifurcation available in respect of revenue of the company from transaction processing and technical services.

Private equity and investment funds

Amicus Services is a leading multi-dimensional full service Indian law firm, providing solution and decision-oriented advice to clients. We provide bespoke solutions tailored to meet commercial objectives while staying aligned with legal and regulatory requirement. The Firm has its presence in New Delhi, Noida and Mumbai and a strong network of local counsels across India and a global alliance with international law firms. We have established capabilities to render services across the globe.

Our commitment to quality and client interest has earned us our place in leadinginternational guides such as India Business Law Journal, Legal 500,Asialaw , Benchmark,Asia Legal Business, ITR, IFLR, Business World, to name a few.

Our venture capital practice has been built on the back of our work in fintech and financial services space, which gave us opportunity to interact with entrepreneurs and investors in India’s most exciting sectors. The client base is divided fairly between investors and investees. As a result, we bring a holistic perspective to the table when working on transactions, guiding clients to take a balanced view based on industry’s best practice rather than a “winner takes it all” approach. The Firm works with start-ups and early-stage investors, providing support through the entire fund-raising process in a cost effective and efficient manner, mitigating impact from high-risk issues, while facilitating the transaction by finding resolution for medium and low risk items. The Firm’s services span the entire spectrum of legal work required for successful equity funding including, legal due diligence, fund raise documentation and compliance, and working with the investee for completing conditions precedent and post-closing activities on need basis.

Our broad experience

Varanium NexGen Trust (Varanium) and DMI Alternative Investment Fund-Sparkle Fund (DMI): Represented Varanium and DMI as Investors’ counsel for investments of $1.2 Mn and $0.8 Mn respectively in Getvantage Tech Private Limited.

GSE Renewables India Private Limited (GSER): Represented GSER as investee company’s counsel in its equity fund raise of INR 2,27,76,890.DMI Alternative Investment Fund – Sparkle Fund (DMI):

Represented DMI as Lead Investor’s counsel for its investment in KNAB Finance Advisors Private limited.

DMI Alternative Investment Fund – Sparkle Fund (DMI): Represented DMI asInvestor’s counsel for its investment in TartanHQ Solutions Private Limited Pre-Series A investment round.

DMI Finance Private Limited (a leading full-stack digital lender) :Represented the client in its $ 47 mn equity fund raise from investors, including Sumitomo Mitsui Trust Bank Limited.

Evage Ventures Private Limited (EV start-up in commercial vehicle space): Represented the client in on $28 mn fund raise from Red Blue Capital. Yatra Angel Network (“YAN”): a fintech focused accelerator on investments in Canpe, Xpresslane and other start-ups.

The Firm is also the official legal partner for Fintech Yatra, 2020. DMI Sparkle Fund (a technology focused fund) and C.E. Info Systems Limited: Represented the clients on various investments in early stage tech focused and fintech companies. Tartan HQ Solutions Pvt. Limited: Acted as a legal counsel in its seed fundraise from various early-stage investors.