M/s. Barclays Technology Centre India P. Ltd., Pune V. Deputy Commissioner of Income-tax,

CO 15/PUN/2016

• Counselvise Citation: [2016] 112 COUNSELVISE.COM (IT) 4189 (ITAT-PUNE)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-07-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 06-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Related party transaction; Transfer pricing; International transaction
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1855/PN/2014 %' ( ')( / ASSESSMENT YEAR : 2009-10 DY. COMMISSIONER OF INCOME TAX, CIRCLE -1(1), PUNE ....... / APPELLANT ' / V/S. BARCLAYS TECHNOLOGY CENTRE INDIA PVT. LTD., 3 RD FLOOR, BLOCK C, PANCHSHIL TECH PARK, OPP.: PUNE GOLF COURSE, AIRPORT ROAD, PUNE - 411006 PAN : AADCB1173D / RESPONDENT *+& / CO NO. 15/PN/2016 %' ( ')( / ASSESSMENT YEAR : 2009-10 BARCLAYS TECHNOLOGY CENTRE INDIA PVT. LTD., 3 RD FLOOR, BLOCK C, PANCHSHIL TECH PARK, OPP.: PUNE GOLF COURSE, AIRPORT ROAD, PUNE - 411006 PAN : AADCB1173D ....... / APPELLANT ' / V/S. DY. COMMISSIONER OF INCOME TAX, CIRCLE -1(1), PUNE / RESPONDENT ASSESSEE BY : SHRI M.P. LOHIA REVENUE BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 01-06-2016 / DATE OF PRONOUNCEMENT : 22-07-2016 2 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 , / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-IT/TP, PUNE DATED 23 -07-2014 FOR THE ASSESSMENT YEAR 2009-10. THE ASSESSEE HAS FILE D CROSS OBJECTION AGAINST THE AFORESAID ORDER OF COMMISSIONER OF IN COME TAX (APPEALS). 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS ENGAGED IN PROVIDING SOFTWARE SERVICES TO BAR CLAYS GROUP WORLDWIDE. THE ASSESSEE COMPANY HAS BEEN SET UP AS A N OFFSHORE TECHNOLOGY CENTRE IN INDIA. THE SOFTWARE SERVICES PROVIDE D BY THE ASSESSEE INCLUDE DEVELOPMENT, MAINTENANCE AND ENHANCEMEN T OF SOFTWARE FOR NEW TECHNOLOGIES AND PLATFORMS AND UPGRADATIO N, MODIFICATION OF EXISTING SOFTWARE APPLICATIONS AND SYSTEMS. T HE SOFTWARE SERVICES RENDERED BY ASSESSEE ARE TO SUPPORT INTERNAL SOFTWARE RELATED REQUIREMENTS FOR THE BARCLAYS GROUP AND NOT FOR SALE TO THIRD PARTY. DURING THE PERIOD RELEVANT TO THE ASSESSMENT YE AR 2009-10, THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME O F ` 4,13,16,515/-. SINCE, THE ASSESSEE HAD ENTERED INTO INTE RNATIONAL TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISE (AE), THE SAM E WERE REFERRED TO TRANSFER PRICING OFFICER (TPO) FOR DETERMINING ARMS LENGT H PRICE (ALP) UNDER THE PROVISIONS OF SECTION 92CA OF THE INCOME T AX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). DURING THE FINANCIA L YEAR 2008-09 THE ASSESSEE HAD ENTERED INTO VARIOUS INTERNATIONAL TRAN SACTIONS WHICH INTER ALIA INCLUDES PROVISION FOR SOFTWARE SERVICES HAVING T RANSACTION VALUE OF ` 172,75,06,099/-. THE ASSESSEE ADOPTED TRANSACTIONAL NET 3 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 MARGIN METHOD (TNMM) AS THE MOST APPROPRIATE METHOD TO BENCHMARK INTERNATIONAL TRANSACTIONS RELATING TO SOFTWARE DEVELOPMENT SERVICES. THE TPO ACCEPTED THE METHOD ADOPTED BY THE ASSESSEE FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS. IN THE TP STUDY THE ASSESSEE SELECTED 21 COMPANIES AS COMPARABLES. HOWEVER , THE TPO REJECTED MAJORITY OF THE COMPANIES SELECTED BY THE ASSE SSEE AS COMPARABLES AND RETAINED ONLY 6 COMPANIES AS COMPARABLE S FROM THE LIST PROVIDED BY ASSESSEE. FURTHER, THE TPO ADDED 3 NEW MORE COMPANIES TO THE LIST OF COMPARABLES FOR DETERMINING ALP. THE TPO REJECTED THE COMPANIES BY APPLYING FOLLOWING FILTERS : I. COMPANIES NOT HAVING DATA FOR THE FINANCIAL YEAR 2008-09. II. TURNOVER FILTER COMPANIES HAVING INCOME FROM SOFTWARE DEVELOPMENT SERVICES LESS THAN ` 1 CRORE. III. RELATED PARTY TRANSACTIONS (RTP) COMPANIES HAVING RTP M ORE THAN 25%. IV. COMPANIES HAVING EXPORT SALES LESS THAN 75% OF THE OPERA TING REVENUE. V. COMPANIES HAVING PERSISTENT LOSSES. VI. COMPANIES HAVING DIFFERENT ACCOUNTING YEAR I.E. ACCOUNTING Y EAR NOT ENDING ON MARCH 31, 2009. VII. FUNCTIONALLY DIFFERENT COMPANIES. 3. THE FINAL SET OF COMPARABLES ADOPTED BY THE TPO FOR BENCHMARKING THE TRANSACTIONS IS AS UNDER : SL. NO. NAME OF THE COMPARABLE COMPANY UNADJUSTED OPERATING MARGINS FOR FY 2008-09 (%) WORKING CAPITAL ADJUSTED OPERATING MARGINS FOR FY 2008-09 1 KALS INFORMATION SYSTEMS 41.91% 37.64% 2 GOLDSTONE TECHNOLOGIES LIMITED 4.16% 9.60% 3 THIRDWARE SOLUTIONS LIMITED 21.90% 18.47% 4 INFOSYS TECHNOLOGIES LIMITED 40.39% 39.50% 5 BODHTREE CONSULTING LIMITED 62.29% 62.36% 6 PERSISTENT SYSTEMS LIMITED 16.18% 17.53% 7 LGS GLOBAL LIMITED 20.51% 16.13% 8 SASKEN COMMUNICATION TECHNOLOGIES 24.22% 26.37% 9 LARSEN & TOUBRO LIMITED 17.54% 20.70% ARITHMETIC MEAN 27.68% 27.59% 4 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 THE OPERATING MARGIN OF THE ASSESSEE WAS DETERMINED AT 15.34%. CONSEQUENT TO THE DETERMINATION OF ALP ON THE BASIS OF S ET OF COMPARABLES SELECTED BY TPO, THE TPO MADE AN UPWARD AD JUSTMENT OF ` 17,46,58,918/- TO THE VALUE OF INTERNATIONAL TRANSACTIONS IN RESPECT OF SOFTWARE DEVELOPMENT SERVICES RENDERED BY THE ASSESSEE TO ITS AES. ON THE BASIS OF ORDER OF TPO FINAL ASSESSMENT ORDER WAS PASS ED BY THE ASSESSING OFFICER U/S. 143(3) R.W.S. 144C(3) OF THE ACT ON 05-04-2013. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). BE FORE THE COMMISSIONER OF INCOME TAX (APPEALS) THE ASSESSEE INTER A LIA CHALLENGED THE ACTION OF TPO IN INCLUDING/EXCLUDING CERTAIN C OMPANIES IN THE LIST OF COMPARABLES. THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE CONTENTIONS OF THE ASSESSEE FOR INCLUDING FOLLO WING COMPANIES IN THE TP STUDY: NAME OF COMPANY REJECTED BY TPO STATING AS FOLLOWS UNADJUSTED MARGINS FOR FY 2009-10 AKSHAY SOFTWARE TECHNOLOGIES ONSITE BUSINESS MODEL 12.29% ZYLOG SYSTEMS LIMITED ONSITE BUSINESS MODEL 14.29% RS SOFTWARE LIMITED ONSITE BUSINESS MODEL 9.89% CG VAK SOFTWARE & EXPORTS LTD. INCURRED LOSS AT SEGMENTAL LEVEL 5.29% MINDTREE LIMITED SUFFICIENT SEGMENTAL INFORMATION IS NOT AVAILABLE 5.54% QUINTEGRA SOLUTIONS LIMITED RELYING ON DRP DIRECTI ON FOR AY 2008-09 0.03% FURTHER, THE COMMISSIONER OF INCOME TAX (APPEALS) DIRECTED THE TPO TO INCLUDE EVOKE TECHNOLOGIES PRIVATE LIMITED (HAVING O PERATING MARGIN OF 20.05%) AND MAVERIC SYSTEMS LIMITED (HAVING OPERAT ING MARGIN OF 14.50%) IN THE LIST OF COMPARABLE COMPANIES. THE 5 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 COMMISSIONER OF INCOME TAX (APPEALS) FURTHER DIRECTED THE T PO EXCLUDE THE FOLLOWING COMPANIES INCLUDED IN THE LIST OF COMPARABLES FOR THE REASONS THAT THERE WAS VAST DIFFERENCE IN SIZE AND SCALE OF BUSINESS AND NATURE OF ACTIVITIES: I. INFOSYS TECHNOLOGIES LIMITED. II. LARSEN & TOUBRO LIMITED. 5. THE FINAL SET OF COMPARABLE COMPANIES SELECTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) FOR DETERMINING ALP IS AS UNDER: SR. NO. NAME OF THE COMPANY OPERATING MARGIN AFTER WCA 1 KALS INFORMATION TECHNOLOGY SYSTEMS LIMITED (SEG) 42.46% 2 BODHTREE CONSULTING LIMITED 63.93% 3 SASKEN COMMUNICATION TECHNOLOGIES LIMITED 13.11% 4 R S SOFTWARE (INDIA) LIMITED 8.58% 5 GOLDSTONE TECHNOLOGIES LIMITED 25.97% 6. CG-VAK SOFTWARE & EXPORTS LIMITED (SEG) 7.46% 7 MINDTREE LIMITED 6.34% 8 AKSHAY SOFTWARE TECHNOLOGIES LIMITED 10.60% 9 LANCO GLOBAL SYSTEMS LIMITED 12.98% 10 PERSISTENT SYSTEMS PRIVATE LIMITED 11.89% 11 QUINTEGRA SOLUTIONS LIMITED -8.02% 12 THIRDWARE SOLUTIONS LIMITED 18.06% 13 ZYLOG SYSTEMS LIMITED 10.20% 14 MAVERIC SYSTEMS LIMITED 12.47% 15 EVOKE TECHNOLOGIES PRIVATE LIMITED 18.39% ARITHMETIC MEAN 16.94% 6. THE COMMISSIONER OF INCOME TAX (APPEALS) FURTHER DIRECTED THE ASSESSING OFFICER TO REWORK MARGINS OF THE COMPARABLE COMP ANIES, IF NECESSARY, BY FOLLOWING SAFE HARBOUR RULES ISSUED BY THE C BDT AND TO GRANT WORKING CAPITAL ADJUSTMENT. AGAINST THESE FINDINGS OF THE COMMISSIONER OF INCOME TAX (APPEALS), THE REVENUE IS IN APP EAL AND THE ASSESSEE HAS FILED CROSS OBJECTIONS. 6 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 7. THE GROUNDS RAISED BY THE REVENUE IN APPEAL ARE AS UNDER : 1. THE LEARNED CIT(A) HAS ERRED, IN LAW AND ON FACTS, BY APPLYING CERTAIN INAPPROPRIATE FILTERS FOR SCREENING OF COMPANIES. 2. THE LEARNED CIT(A) HAS ERRED ON THE FACTS AND CIRCU MSTANCES OF THE CASE AND IN LAW BY REJECTING CERTAIN COMPANIES FROM THE SET OF COMPARABLE IDENTIFIED BY THE TPO IN RESPECT OF INTE RNATIONAL TRANSACTION PERTAINING TO PROVISION OF SOFTWARE SERVICES. 3. THE LEARNED CIT(A) HAS ERRED ON THE FACTS AND CIRCU MSTANCES OF THE CASE AND IN LAW BY INCLUDING CERTAIN ADDITIONAL COMPANIES REJECTED BY THE LEARNED TPO WHICH ARE FUNCTIONALLY NOT COMPA RABLE TO THE ASSESSEE COMPANY. 4. WITHOUT PREJUDICE TO ANY OTHER GROUNDS/SUBMISSION, THE LEARNED CIT(A) HAS ERRED ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW IN INCLUDING CERTAIN ADDITIONAL COMPANIES WHICH HAS BE EN REJECTED BY HON'BLE DISPUTE RESOLUTION PANEL. IN THE ASSESSEE'S OWN CASE FOR A.Y.2008-09. 5. FOR THESE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT(A) MAY BE VACATED AND THAT OF ASSESSING OFFICER BE RESTORED. 6. THE APPELLANT CRAVES TO ADD, ALTER OR AMEND ANY OR ALL THE GROUNDS OF APPEAL. 8. THE ASSESSEE IN ITS CROSS OBJECTION HAS RAISED FOLLOWING GROUNDS : REJECTING APPLICATION OF ONSITE FILTER FOR THE SCR EENING OF COMPANIES 1. ERRRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CAS E, AND IN LAW, BY OBJECTING THE APPROPRIATE ORDER PASSED BY CIT(A) BY REJECTING APPLICATION OF ONSITE FILTER (APPLIED BY THE TPQ) F OR THE SCREENING OF COMPANIES. REJECTING CERTAIN COMPANIES CONSIDERED IN THE COMPA RABLE SET BY THE TPO 2. ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE , AND IN LAW, BY OBJECTING THE WELL-REASONED ORDER PASSED BY CIT(A) FOR AY 2009-10 FOR REJECTING COMPANIES (IE INFOSYS TECHNOLOGIES LIMITE D AND LARSEN & TOUBRO INFOTECH LIMITED) CONSIDERED AS COMPARABLE B Y THE TPQ ON ACCOUNT OF THE VAST DIFFERENCE IN SIZE AND NATURE O F THE BUSINESS ACTIVITIES. 7 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 INCLUSION OF COMPANIES REJECTED BY THE TPO FROM THE COMPARABLE SET 3. ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE , AND IN LAW, BY OBJECTING THE APPROPRIATE ORDER GIVEN BY CIT(A) TO CONSIDER CERTAIN COMPANIES, WHICH WERE ORIGINALLY A PART OF THE TP S TUDY BUT REJECTED BY THE TPQ FROM-THE COMPARABLE SET AS COMPARABLE TO THE RESPONDENT, INCLUSION OF COMPANIES IN THE COMPARABLE SET THAT W ERE REJECTED BY DISPUTE RESOLUTION PANEL ('HON'BLE DRP' ) IN THE AY 2008-09 IN RESPONDENT'S OWN CASE 4. ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE , AND IN LAW, BY OBJECTING THE APPROPRIATE ORDER GIVEN BY CIT(A) TO INCLUDE COMPANIES IN THE COMPARABLE SET. FURTHER, BASED ON THE FACTS AND CIRCUMSTANCES OF TH E CASE, THE HON'BLE CIT(A) AND CONSEQUENTLY THE LEARNED AO AND LEARNED TPO HAS: NON CONSIDERATION OF CONTEMPORANEOUS DATA 5. ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE , AND IN LAW, IN CONDUCTING AN ANALYSIS BASED ON INFORMATION SUBSEQU ENTLY AVAILABLE FOR DETERMINING ARM'S LENGTH PRICE WHICH WAS NOT AV AILABLE AT THE TIME OF COMPLYING WITH THE TRANSFER PRICING REGULATIONS. NON-CONSIDERATION OF MULTIPLE YEAR DATA 6. ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE , AND IN LAW, IN NOT CONSIDERING MULTIPLE YEAR DATA (IE FINANCIAL YEAR 2 008-09 AND PRIOR TWO YEARS) FOR DETERMINING THE ARM'S LENGTH PRICE. USE OF INAPPROPRIATE FILTERS FOR SCREENING OF COMPA NIES 7. ERRED, IN LAW AND IN FACTS, BY APPLYING CERTAIN INA PPROPRIATE FILTERS FOR SCREENING OF COMPANIES. REJECTION OF CERTAIN COMPARABLE COMPANIES IDENTIFIE D BY THE RESPONDENT AS COMPARABLES IN THE TRANSFER PRICING S TUDY 8. ERRED ON THE FADS AND IN CIRCUMSTANCES OF THE CASE, AND IN LAW, IN REJECTING CERTAIN COMPANIES FROM THE SET OF COM PAR ABLES IDENTIFIED BY THE RESPONDENT IN RESPECT OF INTERNATIONAL TRANSACT ION PERTAINING TO PROVISION OF SOFTWARE SERVICES CONSIDERING CERTAIN ADDITIONAL COMPANIES AS COMPARA BLE TO THE APPELLANT 9. ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE , AND IN LAW, IN ACCEPTING ADDITIONAL COMPANIES AS COMPARABLE TO THE RESPONDENT IN RELATION TO PROVISION OF SOFTWARE SERVICES. 8 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 SELECTION OF COMPANIES HAVING ABNORMAL NORMAL PROFI TS 10. ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE , AND IN LAW, IN ACCEPTING COMPANIES WITH ABNORMAL PROFIT AS COMPARA BLE TO THE RESPONDENT REJECTING COMPANIES BEARING LOSS IN FY 2008-09 11. ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE , AND IN LAW, IN REJECTING THE COMPANIES WHO ARE NOT PERSISTENT LOSS MAKERS AND HAVE INCURRED LOSS ONLY IN THE CURRENT FINANCIAL YEAR (I E FY 2008-09). DENIAL OF ADJUSTMENT FOR RISK DIFFERENCES 12. ERRED ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE, AND IN LAW, IN COMPARING FULL-FLEDGED RISK BEARING ENTITIES WITH T HE RESPONDENT'S CAPTIVE OPERATIONS WITHOUT MAKING ANY RISK ADJUSTME NT FOR DIFFERENCES BETWEEN THE FUNCTIONAL AND RISK PROFILE OF COMPARAB LE COMPANIES CONSIDERED AS COMPARABLE VIS-A-VIS THE RISK PROFILE OF THE RESPONDENT. THE RESPONDENT CRAVES, TO CONSIDER EACH OF THE ABOV E GROUNDS OF CROSS OBJECTIONS INDEPENDENT AND WITHOUT PREJUDICE TO EAC H OTHER AND CRAVES, LEAVE TO ADD, ALTER, DELETE OR MODIFY ALL OR ANY OF THE ABOVE GROUNDS OF CROSS OBJECTIONS. 9. SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT VEHE MENTLY SUPPORTED THE FINDINGS OF TPO AND PRAYED FOR SETTING ASIDE THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS). 10. ON THE OTHER HAND SHRI M.P. LOHIA APPEARING ON BEHALF OF T HE ASSESSEE SUBMITTED THAT IN THE APPEAL FILED BY THE DEPART MENT AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE, THE PRIMARILY DIS PUTE IS WITH RESPECT TO SELECTION OF COMPARABLES. THE COMMISSIONER OF I NCOME TAX (APPEALS) HAS UPHELD THE INCLUSION OF KALS INFORMATION TECHNOLO GY LIMITED AND BODHTREE CONSULTING LIMITED. HOWEVER, BOTH THE AFORESAID COMPANIES ARE FUNCTIONALLY DIFFERENT. THE TRIBUNAL IN ASSESSE ES OWN CASE FOR IMMEDIATELY PRECEDING YEAR HAS DIRECTED TO EXCLU DE THE AFORESAID COMPANIES FROM THE LIST OF COMPARABLES. THE MAIN G ROUSE OF THE DEPARTMENT IS WITH RESPECT TO REMOVAL OF INFOSYS TEC HNOLOGIES 9 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 LIMITED FROM THE LIST OF COMPARABLES. THE SCALE OF OPERATION OF SAID COMPANY IS VERY HUGE AND IS THUS NOT COMPARABLE. FURTH ER, THE AFORESAID COMPANIES ARE FUNCTIONALLY DIFFERENT FROM THE ASSE SSEE. THE LD. AR OF THE ASSESSEE FURTHER CONTENDED THAT THE TRIBUN AL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 HAS EXCLUDED INFO SYS TECHNOLOGIES LIMITED FROM THE LIST OF COMPARABLES. THE LD. AR CONTENDED THAT IF THE ABOVE 3 COMPANIES ARE REMOVED FRO M THE LIST OF COMPARABLES THE ASSESSEE WOULD FALL WITHIN 5% RANGE ALLO WED UNDER PROVISO TO SECTION 92C(2) OF THE ACT. 11. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESE NTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. ALTHOUGH, SEVERAL GROUNDS HAVE BEEN RAISED BY THE DEPA RTMENT AND THE ASSESSEE IN GROUNDS OF APPEAL AND CROSS OBJECTION, RESPE CTIVELY, HOWEVER, AT THE TIME OF MAKING SUBMISSIONS THE LD. DR COULD NOT CONTROVERT THE REASONS GIVE BY THE COMMISSIONER OF INCO ME TAX (APPEALS) TO INCLUDE/EXCLUDE CERTAIN COMPANIES FROM THE LIST O F COMPARABLES. SIMILARLY, THE LD. AR OF THE ASSESSEE CONFINED HIS SUBMISSIONS AGAINST INCLUSION OF KALS INFORMATION TECHNOLOGY S YSTEMS LIMITED AND BODHTREE CONSULTING LIMITED IN THE LIST OF COMPAR ABLES. THE LD. AR HAS FURTHER SUPPORTED THE ACTION OF COMMISSION ER OF INCOME TAX (APPEALS) IN EXCLUDING INFOSYS TECHNOLOGIES LIMITED FROM T HE LIST OF COMPARABLES. THE WRITTEN SUBMISSIONS FURNISHED BY THE LD. A R OF THE ASSESSEE TO EXCLUDE THE AFOREMENTIONED COMPANIES FROM TH E LIST OF COMPARABLES ARE AS UNDER : 10 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 NAME OF THE COMPANY RESPONDENT'S SUBMISSION KALS INFORMATION TECHNOLOGY SYSTEM LIMITED THE TPO HAD CONSIDERED THE COMPANY AS COMPARABLE AN D THIS VIEW HAS BEEN UPHELD BY HON'BLE CIT(A). OUR CONTENTIONS ON I TS FUNCTIONAL COMPARABILITY IS GIVEN BELOW: A. FUNCTIONALLY DIFFERENT ENGAGED IN DEVELOPMENT OF SOFTWARE PRODUCTS (FOR E. G. - SHINE, - DOCUFLO, - DAC4CAST, ETC.) NO SEGMENTAL DATA AVAILABLE - THE COMPANY DERIVES ITS REVENUES PRIMARILY FRO M SOFTWARE SERVICES AND SOFTWARE PRODUCTS - SEGMENTAL DETAILS NOT AVAILABLE IN FINANCIAL STATEMENTS (DETAILS OF SOFTWARE PRODUCTS AND SERVICES) BODHTREE CONSULTING LIMITED THE TPO HAD CONSIDERED THE COMPANY AS COMPARABLE AN D THIS VIEW HAS BEEN UPHELD BY HON'BLE CIT(A). OUR CONTENTIONS ON I TS FUNCTIONAL COMPARABILITY IS GIVEN BELOW: A. FUNCTIONALLY DIFFERENT THE COMPANY OPERATES AS A SOFTWARE SOLUTIONS COMPAN Y, AND IS ENGAGED IN PROVIDING OPEN AND END-TO-END WEB SOLUTI ONS, OFF SHORING DATA MANAGEMENT, DATA WAREHOUSING, SOFTWARE CONSULTANCY, DESIGN AND DEVELOPMENT OF SOLUTIONS, U SING THE LATEST TECHNOLOGIES. IT HAS BOTH SOLUTIONS AS WELL AS SERVICE OFFERINGS AND NO REVENUE BREAK UP IS AVAILABLE. AS PER THE COMPANY WEBSITE, THE COMPANY IS INTO PRO DUCT ENGINEERING, PROVISION OF ANALYTICS AND CLOUD COMPU TING SERVICES. B. ABNORMAL PROFIT MAKING COMPANY COMPANY OPERATES ON A DIFFERENT PRICING MODEL VIS-A -VIS THE MODEL ADOPTED BY THE APPELLANT AND ACCORDINGLY THE OPERAT ING MARGINS OF THE COMPANIES ARE WIDELY FLUCTUATING THE OPERATING MARGIN TREND OF THE COMPANY OVER THE FIVE YEARS IS TABULATED BELOW FOR YOUR HONOUR'S EASY REFERENCE: YEAR UNADJUSTED OPERATING MARGIN (OP/OC) FY 2007-08 18.51% FY 2008-09 62.29% FY 2009-10 23.13% FY 2010-11 -11.70% FY 2011-12 4.55% ON REVIEW OF THE FINANCIAL STATEMENT OF BODHTREE FR OM FY 2007-08 TO FY 2011-12, IT IS CLEARLY EVIDENT THAT THE OPERA TING MARGIN OF BODHTREE FOR FY 2008-09 IS ABNORMALLY HIGH. INFOSYS TECHNOLOGIES LIMITED AT THE OUTSET, IT IS ADMITTED THAT THIS COMPANY WAS CONSIDERED AS COMPARABLE BY THE RESPONDENT IN ITS TP REPORT. HOWE VER, HAVING REGARD TO THE GUIDELINES LAID DOWN BY VARIOUS JUDICIAL PRE CEDENTS, THE RESPONDENT WISHES TO SUBMIT THAT THE ABOVE COMPANY IS FUNCTIONALLY NOT COMPARABLE TO THE RESPONDENT AND SHOULD BE EXCLUDED FROM THE COMPARABLE SET. FUNCTIONALLY DIFFERENT THE COMPANY PROVIDES SOLUTIONS THAT SPAN THE ENTIRE SOFTWARE LIFE CYCLE ENCOMPASSING TECHNICAL CONSULTING, DESIGN, DE VELOPMENT, RE- ENGINEERING, MAINTENANCE, SYSTEMS INTEGRATION, PACK AGE EVALUATION AND IMPLEMENTATION, TESTING AND INFRASTRUCTURE MANA GEMENT SERVICES. THE COMPANY ALSO OFFERS SOFTWARE PRODUCTS FOR THE B ANKING INDUSTRY, BUSINESS CONSULTING AND BUSINESS PROCESS MANAGEMENT SERVICES LIKE FINACLE. THE COMPANY HAS A SUBSTANTIAL INVESTMENT IN R&D (AB OUT RS 440 11 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 CRORES) THE COMPANY HAS MENTIONED BRAND VALUE AS AN INTANGI BLE ASSET WHILE THE RESPONDENT DOES NOT OWN ANY INTANGIBLES. (REFER ANNEXURE - 1 FOR DETAILED COMPARISON). 12. WE FIND THAT THE ISSUE RELATING TO INCLUSION OF INFOSYS TECHNOLOGIES LIMITED IN THE LIST OF COMPARABLES FOR DETERMINING ALP WA S CONSIDERED BY THE CO-ORDINATE BENCH IN ASSESSEES OWN CASE FOR IMMEDIATELY PRECEDING ASSESSMENT YEAR IN ITA NO. 2279/P N/2012 DECIDED ON 28-01-2015. THE TRIBUNAL DIRECTED TO EXCLUDE INFOSYS TECHNOLOGIES LIMITED FROM THE LIST OF COMPARABLES BY OBSERV ING AS UNDER : 14. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. IN SO FAR AS THE OBJECTION OF THE REVENUE TO THE EFFECT THAT THE SAID CONCERN WAS INITIALLY INCLUDED BY THE ASSESSEE IN ITS TRANSFER PRICING STUDY AS A COMPARABLE IS CONCERNED, THE LD. REPRESENTATIVE HAS POINTED OUT THAT IN THE TRANSFER PRICING STUDY, ASSESSEE CARRIED OUT TH E COMPARABILITY ANALYSIS BY ADOPTING MULTIPLE YEARS DATA OF THE CO MPARABLES. HOWEVER, THE TPO HAS DISAGREED WITH THE ASSESSEE ON THIS ASP ECT AND INSTEAD HE HAS CARRIED OUT THE COMPARABILITY ANALYSIS AFTER AD OPTING SINGLE YEAR DATA OF THE COMPARABLES RELATABLE TO THE PERIOD UND ER CONSIDERATION. AT THE TIME OF HEARING, RELIANCE WAS ALSO PLACED ON TH E JUDGEMENT OF THE CHANDIGARH SPECIAL BENCH OF THE TRIBUNAL IN THE CAS E OF QUARK SYSTEMS PVT. LTD., REPORTED IN 2010-TIOL-31-ITAT-CHD.-SB FO R THE PROPOSITION THAT IF SOME INCONSISTENCY IN THE COMPARABLE EXISTS, THE N IT SHOULD BE REMOVED FROM THE FINAL LIST OF COMPARABLES NOTWITHSTANDING THE FACT THAT ASSESSEE HAD INITIALLY CONSIDERED IT AS A COMPARABLE CONCERN . IN OUR VIEW, THE PLEA OF THE ASSESSEE FOR EXCLUSION OF INFOSYS TECHNOLOGI ES LTD. CANNOT BE SHUT OUT MERELY BECAUSE THE SAID CONCERN WAS INITIALLY A DOPTED BY THE ASSESSEE AS A COMPARABLE IN ITS TRANSFER PRICING ST UDY. HOWEVER, WE MAY WISH TO POINT OUT THAT THE CAUSE AND JUSTIFICAT ION FOR ITS EXCLUSION IS LIABLE TO BE DEMONSTRATED BY THE ASSESSEE. IN THE PRESENT CASE, IT HAS BEEN POINTED OUT BY THE ASSESSEE THAT THE SAID CONC ERN IS FUNCTIONALLY DIFFERENT AND THAT IT WAS A GIANT COMPANY IN THE AR EA OF DEVELOPMENT OF SOFTWARE SERVICES AND IT ASSUMED ALL THE RISKS LEAD ING TO HIGHER PROFITS, WHEREAS THE ASSESSEE WAS A CAPTIVE UNIT SERVICING O NLY ITS OWN AFFILIATES AND ASSUMED ONLY A LIMITED RISK. QUITE CLEARLY, TH E TURNOVER OF INFOSYS 12 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 TECHNOLOGIES LTD. STANDS AT RS.15,051 CRORES (APPRO X) WHEREAS ASSESSEES TURNOVER FROM SOFTWARE DEVELOPMENT SERVI CES IS TO THE TUNE OF RS.73 CRORES (APPROX). IT IS ALSO CLEAR FROM THE T ABULATION ABOVE, THAT THE SAID CONCERN IS UNDERTAKING DIVERSIFIED ACTIVITIES WHEREAS ASSESSEE IS PROVIDING SOFTWARE SERVICES, AT MINIMAL RISK AS 100 % ACTIVITIES ARE TO ITS ASSOCIATED ENTERPRISE. IN-FACT, ASSESSEE HAS RIGHT LY RELIED UPON THE JUDGEMENT OF THE HONBLE DELHI HIGH COURT IN THE CA SE OF AGNITY INDIA TECHNOLOGIES PVT. LTD. (SUPRA) WHEREIN IN A SOMEWHA T SIMILAR SITUATION THE ACTION OF THE TRIBUNAL IN EXCLUDING INFOSYS TEC HNOLOGIES LTD., FROM THE LIST OF FINAL COMPARABLES WAS AFFIRMED. IN THE CAS E OF AGNITY INDIA TECHNOLOGIES PVT. LTD. (SUPRA), ASSESSEE WAS A WHOL LY OWNED SUBSIDIARY OF A USA COMPANY, AND WAS ENGAGED IN PROVIDING SOFT WARE DEVELOPMENT SERVICES FOR ITS ASSOCIATED ENTERPRISES AS A CAPTIV E SERVICE PROVIDER. THE TRIBUNAL HAD FOUND ON THE BASIS OF THE DIFFERENCES IN RISK PROFILE, NATURE OF SERVICES, REVENUE EARNED, OWNERSHIP OF BRANDED/P ROPRIETARY PRODUCTS, EXPENDITURE ON RESEARCH AND DEVELOPMENT ETC., THAT THE CONCERN M/S. INFOSYS TECHNOLOGIES LTD. WAS NOT COMPARABLE WITH A GNITY INDIA TECHNOLOGIES PVT. LTD. THE HONBLE HIGH COURT OF D ELHI AFFIRMED THE AFORESAID FINDING OF THE TRIBUNAL. IN THE PRESENT CASE TOO, THE DIFFERENCES BETWEEN ASSESSEE AND INFOSYS TECHNOLOGIES LTD. AS T ABULATED ABOVE, HAVE NOT BEEN CONTROVERTED BY THE REVENUE AND THERE FORE IN OUR VIEW ASSESSEE HAS JUSTIFIABLY DEMONSTRATED THAT M/S. INF OSYS TECHNOLOGIES LTD. WAS LIABLE TO BE EXCLUDED FROM THE FINAL SET O F COMPARABLES. WE HOLD ACCORDINGLY. 13. THE CO-ORDINATE BENCH IN THE SAME ORDER HAS ALSO C ONSIDERED THE ISSUE RELATING TO EXCLUSION OF KALS INFORMATION SYSTEMS LTD. FROM THE FINAL SET OF COMPARABLES. THE TRIBUNAL HELD : 18. THIRDLY, ASSESSEE HAS CONTENDED THAT THE CONCE RN M/S. KALS INFORMATION SYSTEMS LTD. BE EXCLUDED FROM THE FINAL SET OF COMPARABLES. ON THIS ASPECT ALSO, THE CASE SET UP BY THE ASSESSE E IS THAT THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SY MPHONY SERVICES PUNE PVT. LTD. (SUPRA) FULLY COVERS THE CONTROVERSY. IN THE CASE OF SYMPHONY SERVICES (SUPRA), M/S. KALS INFORMATION SYSTEMS LTD . WAS EXCLUDED FROM THE LIST OF COMPARABLES ON THE GROUND THAT THE SAID CONCERN WAS INVOLVED NOT ONLY IN THE ACTIVITY OF PROVIDING OF SOFTWARE D EVELOPMENT SERVICES BUT ALSO IN SELLING OF SOFTWARE PRODUCTS. SYMPHONY SER VICES PUNE PVT. LTD. WAS ONLY ENGAGED IN PROVIDING SOFTWARE SERVICES. I N THE CASE OF 13 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 SYMPHONY SERVICES PUNE PVT. LTD. (SUPRA) AS WELL AS IN THE PRESENT CASE ALSO, THE TPO DID NOT ACCEPT THE PLEA FOR EXCLUSION OF KALS INFORMATION SYSTEM LTD. PRIMARILY ON THE GROUND THAT THE FINANC IAL STATEMENTS OF THE SAID CONCERN DID NOT REFLECT ANY SALE OF SOFTWARE P RODUCTS. QUITE CLEARLY THE STAND OF THE REVENUE IN THE PRESENT CASE AS WEL L IN THE CASE OF SYMPHONY SERVICES PUNE PVT. LTD. (SUPRA) IS SIMILAR. IT IS ALSO QUITE CLEAR THAT THE NATURE OF SERVICE BEING RENDERED BY THE AS SESSEE AND SYMPHONY SERVICES PUNE PVT. LTD. (SUPRA) ARE SIMILAR, NAMELY RENDERING OF SOFTWARE DEVELOPMENT SERVICES TO ITS AFFILIATES. THE FOLLOW ING DISCUSSION IN THE ORDER OF THE TRIBUNAL IN CASE OF SYMPHONY SERVICES DATED 30-04-2014 (SUPRA) BRINGS OUT THE SALIENT FEATURES OF THE CONT ROVERSY : 13. THE SECOND POINT RAISED BY THE ASSESSEE IS WIT H REGARD TO THE ADOPTION OF KALS INFORMATION SYSTEMS LIMITED AS A C OMPARABLE CONCERN WHILE BENCHMARKING THE INTERNATIONAL TRANSACTIONS O F THE ASSESSEE. BEFORE THE TPO, ASSESSEE SUBMITTED THAT THE SAID CO NCERN BE EXCLUDED FROM THE LIST OF COMPARABLES ON ACCOUNT OF FUNCTION AL DISSIMILARITIES. THE RELEVANT DISCUSSION IN THIS REGARD IS CONTAINED IN PARA 6.1 OF THE ORDER OF THE TPO. THE PLEA OF THE ASSESSEE WAS THAT THE SAID CONCERN WAS ENGAGED IN SELLING OF SOFTWARE PRODUCTS, NAMELY, VI RTUAL INSURE, LA. VISION, CMSS, E-DMS AND ERP 'SHINE', ETC., WHICH AR E ALL SPECIALISED SOFTWARE PRODUCTS DEVELOPED FOR THE RESPECTIVE SECT ORS. FOR THE INSTANCE, VIRTUAL INSURE WAS SAID TO BE A WEB BASED SOLUTION THAT WAS USEFUL IN THE INSURANCE SECTOR; LA VISION WAS AN E-COMMERCE B ASED APPLICATION IN THE FIELD OF INTRA-ORGANIZATIONAL COMMUNICATIONS, E TC.; AND, CMSS WAS A SOFTWARE FOR CONSULTANTS/AGENTS TO MANAGE THEIR CUS TOMERS PRE AND POST SALES. ON THIS BASIS, IT WAS SOUGHT TO BE MADE OUT THAT THE ASSESSEE WAS FUNCTIONALLY DIFFERENT INASMUCH IT WAS ENGAGED IN T HE PROVISION OF SOFTWARE DEVELOPMENT AND OTHER RELATED SERVICES TO ITS ASSOCIATED ENTERPRISES AS WELL AS TO THE NON-ASSOCIATED ENTERP RISES AND, WAS NOT INVOLVED IN DEVELOPMENT AND SALE OF SOFTWARE PRODUC TS. THE TPO DID NOT ACCEPT THE PLEA OF THE ASSESSEE FOR THE REASON THAT THE ANNUAL REPORT OF THE SAID CONCERN DID NOT REFLECT ABOUT SALE OF SOFT WARE PRODUCTS AFTER DEVELOPMENT AND THEREFORE, ACCORDING TO HIM, IT WAS NOT FUNCTIONALLY DIFFERENT. 14. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE HAS VEHEMENTLY POINTED OUT THAT THE PLEA OF THE ASSESSEE HAS BEEN REJECTED BY THE INCOME-TAX AUTHORITIES WITHOUT ANY JUSTIFIABLE REAS ONS, AS EVEN ON THE BASIS OF THE INFORMATION AVAILABLE IN THE PUBLIC DO MAIN IT IS QUITE EVIDENT THAT KALS INFORMATION SYSTEM LIMITED WAS A CONCERN WHICH WAS DEVELOPING AND SELLING SOFTWARE PRODUCTS, WHICH WAS AN ACTIVITY QUITE DISTINCT FROM THE ACTIVITY OF SOFTWARE DEVELOPMENT UNDERTAKEN BY THE ASSESSEE. IN THE COURSE OF HEARING, THE LEARNED COU NSEL HAS FURNISHED THE 14 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 PRINTS OUT FROM THE ANNUAL REPORT OF KALS INFORMATI ON SYSTEMS LTD. WHEREIN VARIOUS SOFTWARE PRODUCTS SOLD BY THE SAID CONCERN HAVE BEEN DETAILED, WHICH ACCORDING TO HIM, SUPPORTS THE PLEA OF THE ASSESSEE THAT THE SAID CONCERN WAS FUNCTIONALLY DIFFERENT. APART THEREFROM, THE LEARNED COUNSEL HAS REFERRED TO THE DECISION OF THE PUNE BE NCH OF THE TRIBUNAL IN THE CASE OF BINDVIEW INDIA PVT. LTD. VS. DCIT VIDE ITA NO.1386/PN/2010 DATED 30.11.2011, WHICH WAS ALSO A CONCERN ENGAGED IN RENDERING SOFTWARE DEVELOPMENT SERVICES FOR ITS PARENT COMPAN Y. THE ACTION OF THE TPO OF SELECTING KALS INFORMATION SYSTEMS LIMITED A S A COMPARABLE CONCERN WHILE APPLYING THE TNM METHOD WAS REJECTED BY THE TRIBUNAL ON THE BASIS THAT THE SAID CONCERN WAS ENGAGED IN DEVE LOPMENT OF SOFTWARE PRODUCTS AND SALE, WHICH WAS FUNCTIONALLY DISSIMILA R TO THE SOFTWARE DEVELOPMENT SERVICES UNDERTAKEN BY THE BINDVIEW IND IA PVT. LTD. (SUPRA). THE LEARNED COUNSEL POINTED OUT THAT THE S AID DECISION IS FULLY APPLICABLE TO THE FACTS OF THE PRESENT CASE INASMUC H AS SIMILAR FUNCTIONS WERE UNDERTAKEN BY BINDVIEW INDIA PVT. LTD. AND THE REFORE KALS INFORMATION SYSTEMS LIMITED IS LIABLE TO BE EXCLUDE D FROM THE LISTS OF COMPARABLES. 15. A REFERENCE HAS ALSO BEEN MADE TO THE DECISION OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF M/S 3DPLM SOFT WARE SOLUTIONS LTD. VS. DCIT VIDE IT(TP)A NO.1303/BANG/2012 DATED 28.11 .2013 WHEREIN ALSO THE SAID CONCERN, NAMELY, KALS INFORMATION SYS TEMS LIMITED WAS NOT CONSIDERED AS A COMPARABLE ON ACCOUNT OF FUNCTI ONAL DISSIMILARITIES. THE LEARNED COUNSEL POINTED OUT THAT M/S 3DPLM SOFT WARE SOLUTIONS LTD. (SUPRA) WAS ALSO A CONCERN ENGAGED IN THE PROVISION OF SOFTWARE DEVELOPMENT AND OTHER RELATED SERVICES, WHICH IS SI MILAR TO THE FUNCTIONS UNDERTAKEN BY THE ASSESSEE. IT WAS POINTED OUT THAT THE FUNCTIONS OF KALS INFORMATION SYSTEMS LIMITED CONSIDERED BY THE BANGALORE BENCH OF THE TRIBUNAL IS FOR THE SAME ASSESSMENT YEAR AS IS IN THE PRESENT CASE AND THEREFORE THE SAID DECISION ALSO SQUARELY APPLI ES TO THE FACTS OF THE PRESENT CASE. 16. THE LEARNED CIT-DR HAS DEFENDED THE POSITION OF THE TPO BY RELYING ON THE DISCUSSION IN THE ORDER OF THE TPO, WHICH WE HAVE ALREADY ADVERTED TO IN THE EARLIER PART OF THIS ORDER, AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 17. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. WE FIND THAT THE PRECEDENTS BY WAY OF THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF BINDVIEW INDIA PVT. LTD. (SUPRA) AND TH E DECISION OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF M/S 3DPLM SOFTWARE SOLUTIONS LTD. (SUPRA) RELIED UPON BY THE ASSESSEE SQUARELY COVER THE CONTROVERSY RELATING TO KALS INFORMATION SYSTEMS LI MITED. IN THE AFORESAID TWO PRECEDENTS, THE SAID CONCERN HAS BEEN SOUGHT TO BE EXCLUDED FROM THE LIST OF COMPARABLES ON ACCOUNT OF FUNCTIONAL 15 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 DISSIMILARITIES. THE BANGALORE BENCH OF THE TRIBUNA L IN THE CASE OF M/S 3DPLM SOFTWARE SOLUTIONS LTD. (SUPRA) HAS CONSIDERE D THE FUNCTIONS UNDERTAKEN BY THE SAID CONCERN DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION BEFORE US, AND IT HAS BEEN FOUND THAT THE SAID CONCERN WAS ENGAGED IN THE BUSINESS O F DEVELOPING AND SELLING SOFTWARE PRODUCTS AND WAS NOT PURELY OR MAI NLY A SOFTWARE SERVICE PROVIDER. THERE IS NO DISPUTE TO THE FACT P OSITION THAT THE APPELLANT BEFORE US HAS UNDERTAKEN MAINLY SOFTWARE DEVELOPMENT SERVICES FOR ITS ASSOCIATED ENTERPRISES AND THE NON -ASSOCIATED ENTERPRISES AND THAT SUCH ACTIVITY IS QUITE DISTINC T FROM THE DEVELOPING AND SELLING OF SOFTWARE PRODUCTS. THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF BINDVIEW INDIA PVT. LTD. (SUPRA) HAS ALSO F OUND THE SAID CONCERN TO BE FUNCTIONALLY DISSIMILAR FROM A CONCERN WHICH WAS ENGAGED IN THE BUSINESS OF SOFTWARE DEVELOPMENT SERVICES, WHICH IS THE CASE BEFORE US. THOUGH, THE DECISION OF THE TRIBUNAL IN THE CASE OF BINDVIEW INDIA PVT. LTD. (SUPRA) RELATES TO THE ASSESSMENT YEAR 2006-07 WHEREAS THE PRESENT CASE OF THE ASSESSEE IS FOR ASSESSMENT YEAR 2008-09 YET THERE IS NO MATERIAL ON RECORD TO SUGGEST THAT THE ACTIVITIES C ARRIED OUT BY KALS INFORMATION SYSTEMS LIMITED IN THE CURRENT ASSESSME NT YEAR ARE DIFFERENT FROM THOSE NOTED BY THE TRIBUNAL IN THE CASE OF BIN DVIEW INDIA PVT. LTD. (SUPRA) FOR ASSESSMENT YEAR 2006-07. 18. CONSIDERING THE AFORESAID DISCUSSION, IN OUR VI EW, THE CONCERN I.E. KALS INFORMATION SYSTEMS LIMITED IS LIABLE TO BE EX CLUDED FROM THE LIST OF COMPARABLES FOR THE PURPOSES OF BENCHMARKING INTERN ATIONAL TRANSACTIONS OF PROVISION OF SOFTWARE DEVELOPMENT SERVICES. WE H OLD SO. THUS, ON THIS ASPECT ASSESSEE SUCCEEDS. 19. FOLLOWING AFORESAID PRECEDENT, AS THE FACTS AND CIRCUMSTANCES IN THE PRESENT CASE ARE SIMILAR, WE DIRECT THAT M/S. K ALS INFORMATION SYSTEMS LTD., BE EXCLUDED FROM THE FINAL SET OF COM PARABLES. 14. THE CO-ORDINATE BENCH ALSO CONSIDERED THE ISSUE WITH RESPECT TO EXCLUSION OF BODHTREE CONSULTING LTD. FROM THE FINAL SET OF CO MPARABLES. THE TRIBUNAL AFTER CONSIDERING THE FACTS OF THE CSE AND TH E DECISIONS ON WHICH THE LD. AR OF THE ASSESSEE HAD PLACED RELIANCE DIRECT ED TO EXCLUDE BODHTREE CONSULTING LTD. FROM THE LIST OF COMPARABLES. THE FINDINGS OF THE TRIBUNAL ARE AS UNDER : 22. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS WITH RESPECT TO BODHTREE CONSULTING LIMITED. THE PLEA OF THE AS SESSEE IS THAT THE SAID 16 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 CONCERN IS ENGAGED IN THE SALE OF SOFTWARE PRODUCTS , APART FROM CONSIDERING SOFTWARE SERVICES, AND THAT NO SEGMENTA L DATA IS AVAILABLE IN THIS CONTEXT; THUS, IT IS FUNCTIONALLY NOT COMPARAB LE WITH THE ASSESSEES ACTIVITIES. IN THIS REGARD, WE HAVE PERUSED THE DI SCUSSION MADE BY OUR COORDINATE BENCH IN THE CASE OF NETHAWK NETWORKS IN DIA PVT. LTD. (SUPRA) WHEREIN THE SAID CONCERN HAS BEEN FOUND TO BE NOT EXCLUSIVELY ENGAGED IN RENDERING SOFTWARE DEVELOPMENT SERVICES. THE RELEVANT DISCUSSION IN THE CASE OF NETHAWK NETWORKS INDIA PV T. LTD. (SUPRA) IS AS UNDER : C. BODHTREE CONSULTING LIMITED 21. ON THIS COMPARABLE, CASE OF THE ASSESSEE IS THA T THE COMPANY IS NOT A GOOD COMPARABLE IN VIEW OF THE SOFTWARE PRODU CTS PRODUCED BY THE COMPANY. AS SUCH, NO SEGMENTAL DATA IS ADEQUATELY AVAILABLE TOO. ACCORDINGLY, WE DISMISS THE ARGUMENT OF THE LD. DR IN THIS REGARD. EX CONSEQUENTI, THE AO/TPO IS DIRECTED TO EXCLUDE THE SAME FROM THE LIST OF FINAL COMPARABLES FOR WORKING OUT THE ARITHMETIC ME AN. 22. ON THE OTHER HAND, LD DR FILED A COPY OF THE FI NANCIAL STATEMENT AND ARGUED VEHEMENTLY STATING THAT THIS COMPANY IS NOT ENGAGED IN THE SOFTWARE PRODUCTS. IN THIS REGARD, LD DR RELIED ON THE NOTE NO.3, RELATING TO THE RELATING TO THE REVENUE RECOMMENDATION IN SC HEDULE 12, NOTE NO.5 RELATING TO THE SEGMENTAL INFORMATION ETC TO MENTIO N THAT THE COMPANY IS ENGAGED IN THE SOFTWARE DEVELOPMENT ONLY. HOWEVER, THE ASSESSEE ARGUED VEHEMENTLY STATING THAT THIS COMPANY IS ENGA GED IN THE SOFTWARE BASED PRODUCTS. FURTHER, LD COUNSEL MENTIONED THAT THE SAID COMPANY WAS ALREADY EXAMINED AND WAS HELD AS PRODUCT BASED COMPANY BY THE TPO IN THE TP STUDY OF OTHER CASE AND THE TPO CANNO T TAKE DIFFERENT STAND IN THIS CASE. IN THIS REGARD, WE HAVE PERUSED THE PARA 29 OF THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S. WILLS PRO CESSING SERVICES (I) P LTD (SUPRA) WHEREIN IT WAS MENTIONED THAT THE TPO D ESCRIBED THIS COMPANY IS ENGAGED IN THE BUSINESS OF SOFTWARE PROD UCTS, NOT THE SOFTWARE DEVELOPMENT SERVICES. RELEVANT PORTIONS FR OM THE SAID PARA 29 OF THE ORDER OF THE TRIBUNAL IS REPRODUCED HERE UND ER: '29.1 THE ID SR COUNSEL FOR THE ASSESSEE HAS SUBMIT TED THAT THIS COMPANY IS ENGAGED IN THE SOFTWARE PRODUCTS. HE HAS REFERRED THE TPO ORDER AND SUBMITTED THAT IN THE PROFILE OF THE COMP ARABLES SELECTED BY THE TPO ITSELF HAS MENTIONED THE BUSINESS OF THE AS SESSEE IS IN SOFTWARE PRODUCTS. THE ID AR HAS REFERRED THE OBJECTIONS RAI SED BY THE ASSESSEE BEFORE THE TPO AT PAGE 286 OF THE PAPER BOOK AND SU BMITTED THAT THE ASSESSEE BROUGHT THIS FACT THAT THIS COMPANY IS ENG AGED IN PROVIDING OPEN AND END TO END WEB SOLUTIONS, SOFTWARE CONSULT ANCY, DESIGN AND DEVELOPMENT OF SOFTWARE, USING THE LATEST TECHNOLOG IES. FURTHER, THE 17 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 COMPANY HAS IDENTIFIED ONLY ONE SEGMENT I.E SOFTWAR E DEVELOPMENT. THEREFORE, THE ID AR HAS SUBMITTED THAT THIS COMPAN Y IS FUNCTIONALLY NOT COMPARABLE WITH THE ASSESSEE AND CONSEQUENTLY SHOUL D BE EXCLUDED FROM THE COMPARABLES. 29.2 ON THE OTHER HAND, THE ID DR HAS FILED THE INF ORMATION COLLECTED U/S 133(6) OF THE I T ACT AND SUBMITTED THAT AS PER THI S INFORMATION, THIS COMPANY HAS REVENUE FROM ITES ACTIVITY TO THE EXTEN T OF RS. 2,94,85,528/-. THEREFORE, THIS COMPANY IS A GOOD CO MPARABLE HAVING FUNCTIONAL SIMILARITY. 29.3......... 30. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THE DETAILS FILED BY THE ID DR BEFORE US HAS BEEN OBTAINED BY THE TPO AT HYDERABAD AND NOT BY THE TPO OF THE ASSESSEE IN THE PRESENT CASE. IT IS STATED IN THE LETTER DAT ED 5.2.2010 WRITTEN BY THE CHARTERED ACCOUNTANT OF BODHTREE CONSULTING LTD TO THE TPO HYDERABAD THAT THE COMPANY IS PROVIDING DATA CLEANI NG SERVICES TO CLIENTS FOR WHOM IT HAD DEVELOPED THE SOFTWARE APPL ICATION.........' 23. CONSIDERING THE ABOVE, WE ARE OF THE OPINION TH AT BODHTREE CONSULTING LIMITED IS NOT ENGAGED IN THE SOFTWARE D EVELOPMENT SERVICES AND THERE IS NO SEGMENTAL DATA COMPARABLE. THEREFOR E, THE FAR ANALYSIS GOES AGAINST THE TPO/AO. 23. THERE IS NO MATERIAL PLACED BEFORE US WHICH WOU LD REQUIRE US TO DEVIATE FROM THE CONCLUSION DRAWN BY THE MUMBAI BEN CH OF THE TRIBUNAL IN THE CASE OF NETHAWK NETWORKS INDIA PVT. LTD. (SU PRA) IN THE CONTEXT OF THE EXCLUSION OF BODHTREE CONSULTING LTD. FROM THE FINAL SET OF COMPARABLES. MOREOVER, THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF MINDTECK INDIA LTD. (SUPRA) ALSO CONSIDERED THE EFFICACY OF INCLUSION OF BODHTREE CONSULTING LTD. ON THE BASIS OF COMPARABIL ITY ANALYSIS IN THE CASE OF AN ASSESSEE WHICH WAS ENGAGED IN SIMILAR AC TIVITIES AS THE APPELLANT BEFORE US. THE FOLLOWING DISCUSSION IN T HE CASE OF MINDTECK INDIA LTD. (SUPRA) IS WORTHY OF NOTICE : I. BODHTREE CONSULTING LTD. : AS FAR AS THIS COMPANY IS CONCERNED, THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS THAT THIS COMPANY MADE EXTRA ORDINARY PROFITS DURING THE PREVIOUS YEAR. OUR ATTENTION WA S DRAWN TO THE FACT THAT THE OPERATING PROFIT/OPERATING COST OF THIS CO MPANY JUMPED FROM 17% FOR F.Y. 2007-08 TO 56% IN F.Y. 2008-09. IT DI PPED IN F.Y.2009-10 TO 40% AND IN F.Y.2010-11 IT BECAME (-) 2% AND 5% I N F.Y.2011-12 AND FINALLY TOUCHED (-) 9% IN F.Y.2012-13. OUR ATTENTI ON WAS DRAWN TO THE FACT THAT THE SPECIAL BENCH OF THE TRIBUNAL, MUMBAI , IN THE CASE OF MAERSK GLOBAL CENTRES (INDIA) P. LTD., IN ITA NO.74 66/M/2012, DT.07-03- 18 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 2014 FOR A.Y. 2008-09 HAD AN OCCASION TO CONSIDER T HE QUESTION AS TO WHETHER COMPANIES HAVING ABNORMAL PROFITS SHOULD BE EXCLUDED AS A COMPARABLE. THE SPECIAL BENCH TOOK THE VIEW THAT I T HAS TO BE SHOWN THAT THE HIGH PROFIT MARGIN DOES NOT REFLECT THE NO RMAL BUSINESS CONDITIONS AND ONLY IN SUCH CIRCUMSTANCES, HIGH PRO FIT MARGIN COMPANIES CAN BE EXCLUDED. OUR ATTENTION WAS DRAWN TO THE DR PS OBSERVATION IN ITS ORDER ON THE ISSUE WHICH IS AS FOLLOWS : BODHTREE : THE ASSESSEE HAS OBJECTED TO SELECTION OF THIS ENTI TY ON THE BASIS OF THE FOLLOWING OBJECTIONS : THE ENTITY HAS FLUCTUATING MARGINS. THE COMPANY IS MORE OF A PRODUCT COMPANY RATHER THA N SOFTWARE SERVICE COMPANY. THE PANEL HAS CONSIDERED THE OBJECTIONS OF THE ASSE SSEE. INSOFAR AS THE CONTENTION REGARDING THE REJECTION OF THIS ENTITY O N THE BASIS OF FLUCTUATING MARGIN IS CONCERNED. IN ORDER TO APPRECIATE THE CO MPATIBILITY OR OTHERWISE OF THIS ENTITY, IT IS IMPORTANT TO FIRST NOTE THAT THE INDIAN SOFTWARE INDUSTRY USES TWO DIFFERENT MODELS FOR REVENUE RECOGNITION. THE FIRST IS THE TIME AND MATERIAL (T&M) CONTRACTS MODEL IN WHICH CUSTOMER AR E BILLED ON THE BASIS OF HOURS WORKED BY THE EMPLOYEES OF SUPPLIER SOFTWARE COMPANIES. HOURLY RATES ARE AGREED ON BY BOTH PARTIES AND ARE APPLIED TO THE TOTAL HOURS WORKED TO ARRIVE AT THE REVENUE THAT IS TO BE RECOG NIZED. THE SECOND IS THE FIXED PRICE PROJECT MODEL, THE TOTAL CONTRACT PRICE IS AGREED UPON BETWEEN THE PARTIES. BILLING MAY BE DONE EITHER AT THE END OF THE CONTRACT OR OVER THE PERIOD OF THE CONTRACT ON THE BASIS OF THE AGREED M ILESTONE FOR BILLING. IN THIS RESPECT, THE BASIS OF REVENUE RECOGNITION BY THIS E NTITY CAN BE SEEN FROM THE ANNUAL REPORT AS BELOW : 3. REVENUE RECOGNITION : REVENUE FROM SOFTWARE DEVELOPMENT IS RECOGNIZED BAS ED ON SOFTWARE DEVELOPED AND BILLED TO CLIENTS. FROM PERUSAL OF THE ABOVE, IT IS SEEN THAT THIS ENT ITY IS ENGAGED IN BUILDING REVENUES THROUGH FIXED PRICE PRODUCT MODE. AS IS A NATURAL COROLLARY IN SUCH TYPE OF REVENUE RECOGNITION, SOME PART OF THE EXPEN DITURE MAY BE BOOKED IN ONE YEAR FOR WHICH THE REVENUE MAY HAVE BEEN RECOGN IZED IN THE EARLIER OR SUBSEQUENT YEAR. THEREFORE, IT IS BUT NATURAL THAT THERE IS SOME FLUCTUATION IN THE PROFITABILITY MARGIN OF SUCH ENTITY. MERELY BE CAUSE OF SUCH FLUCTUATION, AN ENTITY ENGAGED IN THE DEVELOPMENT OF SOFTWARE, B EING FUNCTIONALLY COMPARABLE TO THE ASSESSEE, CANNOT BE REJECTED ONLY ON THIS GROUND. 14. THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUR A TTENTION TO THE FACT THAT BODHTREE CONSULTING ADMITTEDLY FOLLOWS A FIXED PRIC E PROJECT MODEL WHEREBY REVENUES FROM SOFTWARE DEVELOPMENT IS RECOGNIZED BA SED ON SOFTWARE AND 19 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 BILLED TO CLIENTS. IN SUCH BUSINESS MODEL EXPENDIT URE FOR DEVELOPING SOFTWARE WOULD BE BILLED IN AN EARLIER YEAR BUT THE REVENUE WOULD BE RECOGNIZED IN A SUBSEQUENT YEAR. IT WAS HIS SUBMISSION THAT THIS F ACT IS RECOGNIZED BY THE DRP IN ITS ORDER. ACCORDING TO HIM THIS CIRCUMSTAN CE WOULD BE SUFFICIENT TO SHOW THAT THE MARGIN REFLECTED OF THIS COMPANY DOES NOT REFLECT THE NORMAL BUSINESS CONDITION. 15. THE LEARNED DR PLACED RELIANCE ON THE REASON GI VEN BY THE DRP IN ITS ORDER. 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE SPECIAL BENCH OF THE ITAT IN THE CASE OF MAERSK GLOBAL CENTRES (SUPRA) H AD AN OCCASION TO DEAL WITH THE QUESTION AS TO WHETHER HIGHER PROFIT MARGI N MAKING COMPANIES SHOULD BE EXCLUDED AS A COMPARABLE. THE SPECIAL BE NCH AFTER CONSIDERING SEVERAL ASPECTS HELD IN PARA 88 OF ITS ORDER THAT T HE POTENTIAL COMPARABLE COMPANIES CANNOT BE EXCLUDED MERELY ON THE GROUND T HAT THEIR PROFIT IS ABNORMALLY HIGH. THE SPECIAL BENCH HELD THAT IN SU CH CASES IT WOULD REQUIRE FURTHER INVESTIGATION TO ASCERTAIN THE REASON FOR U NUSUALLY HIGH PROFIT AND IN ORDER TO ESTABLISH WHETHER THE ENTITIES WITH SUCH H IGH PROFITS CAN BE TAKEN AS COMPARABLE OR NOT. IN THE LIGHT OF THE AFORESAID D ECISION OF THE SPECIAL BENCH AND IN VIEW OF THE ADMITTED POSITION THAT THE ASSES SEE FOLLOWS FIXED PRICE PROJECT MODEL WHERE REVENUES FROM SOFTWARE DEVELOPM ENT IS RECOGNIZED BASED ON SOFTWARE DEVELOPED AND BILLED TO CLIENTS, THERE IS A POSSIBILITY OF THE EXPENDITURE IN RELATION TO THE REVENUE BEING BO OKED IN THE EARLIER YEAR. THE RESULTS OF BODHTREE FROM F.Y.2003 TO 2008 EXCLU DING F.Y.2007 AS GIVEN BY THE LEARNED COUNSEL FOR THE ASSESSEE WERE ALSO P ERUSED. PERUSAL OF THE SAME SHOWS, THAT THERE HAS BEEN A CONSISTENT CHANGE IN THE OPERATING MARGINS. THE CHART FILED BY THE ASSESSEE IN THIS R EGARD IS GIVEN AS AN ANNEXURE TO THIS ORDER. IT APPEARS TO US THAT THE REVENUE RECOGNITIONS METHOD FOLLOWED BY THE ASSESSEE IS THE REASON FOR T HE DRASTIC VARIATION IN THE PROFIT MARGINS OF THIS COMPANY. IN THE GIVEN CIRCU MSTANCES, WE ARE OF THE VIEW THAT IT WOULD BE SAFE TO EXCLUDE BODHTREE CONS ULTING FROM THE FINAL LIST OF COMPARABLES CHOSEN BY THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. 24. THOUGH THE AFORESAID DISCUSSION BY THE BANGALOR E BENCH OF THE TRIBUNAL IS IN RELATION TO THE ASSESSMENT YEAR 2009 -10, BUT THE INFERENCES DRAWN WITH REGARD TO THE VARIATIONS IN T HE PROFIT MARGINS OF THE SAID CONCERN FOR DIFFERENT YEARS IS RELEVANT IN THE PRESENT CONTEXT ALSO. FURTHERMORE, THE TRIBUNAL ALSO ANALYSED AND FOUND THAT THE SAID CONCERN WAS FOLLOWING FIXED PRICE PROJECT METHOD WH EREBY REVENUE FROM SOFTWARE DEVELOPMENT SERVICES WAS BEING RECOGNIZED BASED ON THE SOFTWARE DEVELOPED AND BILLED TO THE CLIENTS. IN S UCH A BUSINESS MODEL, THE POSSIBILITY OF THE EXPENDITURE NOT BEING BOOKED ON THE BASIS OF THE MATCHING PRINCIPLE CANNOT BE RULED OUT, WHICH WOULD IMPART FLUCTUATION IN THE MARGINS OVER THE YEARS. IN CONTRAST, IN THE PR ESENT CASE, THE REVENUE 20 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 IS BEING RECOGNIZED BASED ON THE COST PLUS MARKUP B ASIS. CLEARLY, THE REVENUE RECOGNITION MODEL OF BODHTREE CONSULTING LT D. IS QUITE DIFFERENT FROM THE MODEL BEING PURSUED BY ASSESSEE AND SUCH D ISTINCTION PREVAILED WITH THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF MINDTECK INDIA LTD. (SUPRA) TO EXCLUDE BODHTREE CON SULTING LTD. FROM THE LIST OF COMPARABLES. CONSIDERING SUCH DIFFERENCE, IN OUR VIEW, ASSESSEE IS JUSTIFIED IN ASSERTING THAT THE SAID CONCERN BE EXCLUDED FROM THE LIST OF COMPARABLES. WE HOLD SO. 15. THE LD. DR HAS NOT BEEN ABLE TO CONTROVERT THE FIND INGS OF THE TRIBUNAL IN EXCLUDING THE THREE COMPANIES I.E. INFOSYS TECHN OLOGIES LIMITED, KALS INFORMATION SYSTEMS AND BODHTREE CONSULTING L TD. FROM THE FINAL SET OF COMPARABLES. NO MATERIAL HAS BEEN BROUGHT BEFORE US TO SHOW THAT THERE IS ANY CHANGE IN THE FACTS AND CIRCUMS TANCES IN THE ASSESSMENT YEAR UNDER APPEAL. RESPECTFULLY FOLLOWING THE D ECISION OF THE CO-ORDINATE BENCH UNDER IDENTICAL FACTS AND CIRCUMST ANCES WE DIRECT TO EXCLUDE KALS INFORMATION SYSTEMS AND BODHTREE CONSULTING LTD. FROM THE FINAL LIST OF COMPARABLES AND UPHOLD THE DIREC TIONS OF COMMISSIONER OF INCOME TAX (APPEALS) TO EXCLUDE INFOSYS TEC HNOLOGIES LIMITED FROM THE LIST OF COMPARABLES. 16. THE LD. AR OF THE ASSESSEE AT THE TIME OF MAKING SUBM ISSIONS HAD STATED THAT IF THE THREE COMPANIES I.E. (I) INFOSYS TECHNOLO GIES LIMITED, (II) KALS INFORMATION SYSTEMS AND (III) BODHTREE CONSULTING LTD . ARE EXCLUDED FROM THE LIST OF COMPARABLES, THEN THE ALP MARGIN OF COMPARABLES AND THE ASSESSEES OPERATING MARGIN OF THE INTERNATIONAL TRANSACTION WITH RESPECT TO SOFTWARE SERVICES TO ITS AES WOULD FALL WITHIN 5% RANGE AND HENCE NO ADJUSTMENT WOULD BE REQ UIRED. SINCE, THE ASSESSEE HAS SUCCEEDED IN ITS PRAYER FOR EXCLUDING T HE AFORESAID THREE COMPANIES, THE OTHER GROUNDS IN CROSS OBJECTIONS HAVE BECOME 21 ITA NO. 1855/PN/2014 & CO NO. 15/PN/2016 ACADEMIC. MOREOVER, NO ARGUMENTS WERE ADVANCED BY THE LD. AR TO SUBSTANTIATE THE OTHER GROUNDS RAISED IN CROSS OBJECTIO NS, ACCORDINGLY, THE SAME ARE DISMISSED AS SUCH. 17. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED AND THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 22 ND DAY OF JULY, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 22 ND JULY, 2016 RK ,-*%./#0#). / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-IT/TP, PUNE 4. THE DIT (TP/IT), PUNE 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE