Citrix R & D India Private Limited, Bangalore V. ITO, Bangalore

CO 172/BANG/2015

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 2041 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 04-09-2015
• Court: TRIBUNAL
• Department Lawyers: DR G MANOJ KUMAR
• Assessee Lawyers: RAGHUNATHAN
• Keywords: Transfer pricing

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI NARENDRA KUMAR CHOUDHURY, JUDICIAL MEMBER IT(TP)A NO. 841/BANG/2013 ASSESSMENT YEAR : 2005-06 INCOME TAX OFFICER, WARD-11(1), BANGALORE. VS. M/S. CITRIX R&D INDIA PVT. LTD., PRESTIGE DYNASTY, 33, ULSOOR ROAD, BANGALORE 560 100. PAN: AABCN3639C APPELLANT RESPONDENT C.O. NO. 172/BANG/2015 [IN IT(TP)A NO. 841/BANG/2013] ASSESSMENT YEAR : 2005-06 M/S. CITRIX R&D INDIA PVT. LTD., PRESTIGE DYNASTY, 33, ULSOOR ROAD, BANGALORE 560 100. PAN: AABCN3639C VS. INCOME TAX OFFICER, WARD-11(1), BANGALORE. CROSS OBJECTOR RESPONDENT REVENUE BY : DR. G. MANOJ KUMAR, ADDL. CIT ASSESSEE BY : SHRI RAGHUNATHAN, S. ADVOCATE DATE OF HEARING : 15-03-2016 DATE OF PRONOUNCEMENT : 18-03-2016 O R D E R PER B. RAMAKOTAIAH, ACCOUNTANT MEMBER THE APPEAL IS BY REVENUE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-IV BENGALURU DATED 08-03-2013. CROSS OBJECTION IS IT(TP)A NO. 841/BANG/2013 & C.O. NO. 172/BANG/2015 PAGE 2 OF 9 PREFERRED BY ASSESSEE MAINLY SUPPORTING THE ORDER L D.CIT(A) AND ALSO ON CERTAIN FILTERS WHICH LD.CIT(A) DID NOT ACCEPT. 2. BRIEFLY STATED, ASSESSEE IS A WHOLLY OWNED SUBSI DIARY OF M/S. CITRIX SYSTEMS, USA AND IS ENGAGED IN PROVIDING SOFTWARE D EVELOPMENT SERVICES. IN THE TP ANALYSIS, THE TRANSFER PRICING OFFICER (T PO) SELECTED 17 COMPARABLES, ARRIVED AT ARITHMETIC MEAN AT 26.59% A ND AFTER WORKING OUT WORKING CAPITAL ADJUSTMENT, DETERMINED THE MARGIN A T 22.23% AND PROPOSED AN ADJUSTMENT OF RS. 1,04,88,511/-. ASSES SING OFFICER (AO) PASSED ORDER ACCORDINGLY. WHILE COMPLETING ASSESSM ENT, AO ALSO EXCLUDED CERTAIN EXPENDITURE FROM EXPORT TURNOVER O NLY AND REDUCED THE CLAIM OF 10A DEDUCTION. 3. LD.CIT(A) ON APPEAL, ACCEPTED CERTAIN FILTERS, E XCLUDED SOME COMPANIES ON FUNCTIONALITY AND FILTERS AND ALSO DEC IDED TO INCLUDE TWO COMPARABLES IN THE LIST OF COMPARABLES EARLIER REJE CTED BY THE TPO. THE REVENUE IS AGGRIEVED AND RAISED GROUNDS ON THESE IS SUES. 4. GROUND NO. 2 TO 4 IS ON THE ISSUE OF COMPUTATION U/S. 10A OF THE ACT. AO WHILE COMPUTING DEDUCTION U/S. 10A EXCLUDED CERT AIN EXPENDITURE UNDER THE HEAD TELECOMMUNICATION CHARGES FROM THE EXPOR T TURNOVER. LD.CIT(A) ACCEPTED ASSESSEE CONTENTION THAT THE SAM E SHOULD BE EXCLUDED FROM THE TOTAL TURNOVER ALSO. THIS ISSUE IS COVERE D IN FAVOUR OF ASSESSEE BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF TATA E LXSI LTD., VS. CIT [349 ITR 98 (KAR)], WHEREIN THE HON'BLE HIGH COURT HAS HELD THAT WHATEVER IS IT(TP)A NO. 841/BANG/2013 & C.O. NO. 172/BANG/2015 PAGE 3 OF 9 EXCLUDED FROM EXPORT TURNOVER SHOULD ALSO BE EXCLUD ED FROM TOTAL TURNOVER FOR THE PURPOSE OF COMPUTING DEDUCTION U/S. 10A OF THE ACT. THE ORDER OF LD.CIT(A) IS IN ACCORDANCE WITH THE PRINCIPLES ON T HE ISSUE. THE GROUNDS OF REVENUE ARE ACCORDINGLY REJECTED. 5. GROUND NOS. 5, 6, 7, 10, 11 & 12 IS AS UNDER: 5. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE SI ZE, TURNOVER OF THE COMPANY ARE DECIDED FACTORS FOR TREATING A COMPANY AS A COMPARABLE, AND ACCORDINGLY ERRED IN EXCLUDING SOLUTIONS, IGATE GLO BAL SOLUTIONS LTD., L&T INFOTECH LTD., SATYAM COMPUTERS LTD., M/S. INFOSYS TECHNOLOGY LTD., M/S. FLEXTRONICS SOFTWARE SYSTEMS LTD., AS A COMPARABLE IN THE SEGMENT. 6. THE LD.CIT(A) ERRED IN REJECTING COMPANIES ON TH E BASIS OF ABNORMAL PROFIT WITHOUT DEFINING WHAT CONSTITUTES ABNORMAL P ROFIT FILTER AND HOW THE SAME IS DETERMINED AND THEREBY ALSO ERRED IN EXCLUD ING THE COMPARABLE COMPANIES EXENSYS SOFTWARE SOLUTIONS LTD AND THIRDW ARE SOLUTIONS LTD. 7. THE LD.CIT(A) ERRED IN REJECTING THE DIMINISHING REVENUE FILTER USED BY THE TPO TO EXCLUDE COMPANIES THAT DO NOT REFLECT TH E NORMAL INDUSTRY TREND. 10. THE LEARNED CIT(A) ERRED, IN THE FACTS AND CIRC UMSTANCES OF THE CASE IN HOLDING THAT M/S. TATA ELXSI LTD., CANNOT BE TAKEN AS COMPARABLE, BEING FUNCTIONALLY DIFFERENT WHEN IT SATISFIES ALL THE QU ALITATIVE AND QUANTITATIVE FILTERS APPLIED BY THE TPO. 11. THE LEARNED CIT(A) ERRED, IN THE FACTS AND CIRC UMSTANCES OF THE CASE IN HOLDING THAT M/S. BODHTREE CONSULTING LTD., CANNOT BE TAKEN AS COMPARABLE, WHEN THE COMPANY QUALIFIES ALL THE QUAL ITATIVE AND QUANTITATIVE FILTERS APPLIED BY THE TPO IN SELECTIO N OF THIS COMPANY AS A COMPARABLE. 12. THE LEARNED CIT(A) ON THE FACTS AND IN THE CIRC UMSTANCES OF THE CASE ERRED IN HOLDING THAT M/S. GEOMETRIC SOFTWARE SOLUT IONS CO. LTD., CANNOT BE TAKEN AS COMPARABLE, WHEN THE COMPANY QUALIFIES ALL THE QUALITATIVE AND QUANTITATIVE FILTERS APPLIED BY THE TPO IN SELE CTION OF THIS COMPANY AS A COMPARABLE. 5.1. LD.CIT(A) HAS EXCLUDED THE ABOVE COMPARABLES O N ADOPTING VARIOUS FILTERS. HIS DECISION ON TURNOVER FILTERS IS AS UN DER: IT(TP)A NO. 841/BANG/2013 & C.O. NO. 172/BANG/2015 PAGE 4 OF 9 99. I AM OF THE CONSIDERED OPINION THAT THE TPO W AS JUSTIFIED IN APPLYING THE TURNOVER FILTER, BUT HE IS OUGHT TO APPLY THE SAME OBJECTIVELY BOTH FOR LOW AND HIGH TURNOVER COMPANIES, AS A ONE SIDED APPLICATION OF T HE TURNOVER FILTER WOULD RENDER THE ANALYSIS UNRELIABLE. IN THIS CONTEXT, I PLACE RELIANCE ON THE DECISION OF THE HON'BLE JURISDICTIONAL BENCH OF ITAT IN THE CASE OF GENESIS INTEGRATING SYSTEMS (INDIA) (P.) LTD., V. DCIT [2012] 53 SOT 159 (BANG) WHERE IT WAS HELD THAT WHEN THERE WAS A LIMIT FOR THE LOWER END FOR IDENTIFYING THE COMPARABLES, THERE WAS NO REASON WHY THERE SHOULD NOT BE AN UPPER LIMIT ALSO, AS SIZE MATTERED IN BUSINESS. 100. WHILE A BIG COMPANY WOULD BE IN A POSITION TO BARGAIN THE PRICE, ATTRACT MORE CUSTOMERS AND HAVE A BROAD BASE OF SKILLED EMP LOYEES WHO WERE ABLE TO GIVE BETTER OUTPUT, A SMALL COMPANY MIGHT NOT HAVE THESE BENEFITS AND THEREFORE, THE TURNOVER ALSO WOULD COME DOWN REDUCING PROFIT M ARGIN. THUS, WHEN COMPANIES WHICH WERE LOSS MAKING WERE EXCLUDED FROM COMPARABLES, THEN THE SUPER PROFIT MAKING COMPANIES SHOULD ALSO BE EXCLUD ED. FOR THE PURPOSE OF CLASSIFICATION OF COMPANIES ON THE BASIS OF NET SAL ES OR TURNOVER AND OF CLASSIFICATION MADE BY DUN & BRADSTREET, THE TURNOV ER FILTER WAS VERY IMPORTANT AND COMPANIES WHICH HAD TURNOVER OF RS. 1 TO RS. 200 CR ORE SHOULD BE TAKEN INTO CONSIDERATION FOR THE PURPOSE OF MAKING TP STUDY. 101. THE HON'BLE DELHI BENCH OF ITAT HAS IN THE CAS E OF SONY INDIA (P.) LTD., VS. DCIT [2008] 114 ITD 448 (DEL) UPHELD THE OBJECT ION OF ASSESSEE ON INCLUSION OF A COMPARABLE WHEN THE DISTINCTIVE DIFFERENCE LIK E SIZE AND TURNOVER MATERIALLY AFFECTED PERFORMANCE OR PRICES OF PRODUCTS. IT WAS HELD IN E-GAIN COMMUNICATION PRIVATE LIMITED (2008-TIOL-282-ITAT-PUNE) THAT THER E WAS NO JUSTIFICATION FOR CONSIDERING OVERSIZED COMPANIES AND THE COMMISSIONE R (APPEALS) WAS IN ERROR IN CONSIDERING TURNOVER AS THE ONLY RELEVANT FACTOR NE EDED TO BE CONSIDERED FOR A PROPER ANALYSIS, AND IN DELOITTE CONSULTING INDIA P VT. LIMITED V. DCIT (ITA NO. 1082/HYD/2010) THAT IN THE EVENT OF USE OF THE TPO S FILTER OF A TURNOVER OF LESS THAN RS. 1 CRORE, IT WOULD BE APPROPRIATE TO REJECT COMPANIES HAVING HIGHER SALES TURNOVER AS WELL TO NEUTRALIZE THE IMPACT OF BOTH L OW AND HIGH TURNOVER COMPANIES AND TO PROVIDE A MORE RELIABLE RESULT. 102. FOR THE FOREGOING REASONS AND FOLLOWING THE DE CISIONS CITED ABOVE AND CONSIDERING THAT THE APPELLANTS TURNOVER DURING TH E YEAR UNDER APPEAL WAS LESS THAN RS. 25 CRORES, I ALLOW THIS GROUND OF APPEAL A ND DIRECT THE AO TO APPLY, FOR COMPUTING THE ARITHMETIC MEAN OF NET MARGINS, THE T URNOVER FILTER AT BOTH THE LOWER AND UPPER ENDS AND EXCLUDE FROM THE FINAL SET OF CO MPARABLES THE FOLLOWING COMPANIES FALLING OUTSIDE THAT RANGE OF TURNOVER AN D COMPANIES THAT HAD ABNORMALLY HIGH PROFITS (>50%): SL. NO. COMPANY TURNOVER (RS. CRORE) OP/OC (%) 1. EXENSYS SOFTWARE SOLUTIONS LTD., 70.68 07.30 2. FLEXTRONICS SOFTWARE SERVICES LTD., 457.45 32.19 3. IGATE GLOBAL SOLUTIONS LTD., 406.00 4.32 4. INFOSYS TECHNOLOGIES LTD., 6859.70 42.83 5. L&T INFOTECH LTD., 562.45 10.33 6. SATYAM COMPUTER SERVICES LTD., 3464.20 29.44 7. THIRDWARE SOLUTIONS LTD., 29.11 66.09 IT(TP)A NO. 841/BANG/2013 & C.O. NO. 172/BANG/2015 PAGE 5 OF 9 5.2. HIS FINDING DIMINISHING OF THE REVENUES FILTER IS AS UNDER: 112. I HAVE CAREFULLY CONSIDERED THE APPELLANTS SUBMISSIONS ON THIS ASPECT. THE REASON GIVEN BY THE TPO FOR APPLYING THIS FILTER IS THAT THE FILTER WAS DESIGNED TO ELIMINATE COMPANIES HAVING PECULIAR ECONOMIC CIRCUM STANCES WHICH WERE NOT IN LINE WITH THE GROWING TREND OF THE SOFTWARE INDUSTR Y. HOWEVER, THE RATIONALE GIVEN FOR APPLYING THIS FILTER CONTRADICTS THAT USED FOR CURRENT YEARS DATA FOR THE TP ANALYSIS IN TERMS OF RULE 10B(4), AS THE FILTER FOC USES ON THE TREND OF REVENUE EARNED BY COMPANIES OVER A PERIOD OF TIME AND DOE S AGAINST THE TPOS OWN STAND THAT ONLY CURRENT YEARS DATA WAS REQUIRED TO BE USED. FURTHER, THE TPO HAS USED ANOTHER FILTER TO EXCLUDE COMPANIES THAT HAD E XPERIENCED PECULIAR ECONOMIC CIRCUMSTANCES, THE JUSTIFICATION FOR WHICH IS DISCU SSED ELSEWHERE IN THIS ORDER. IN ANY CASE, DIMINISHING REVENUES OR PERSISTENT LOSSES DO NOT NECESSARILY RESULT FROM PECULIAR ECONOMIC CIRCUMSTANCES ALONE, BUT COULD ALSO BE A RESULT OF MISMANAGEMENT, USE OF INAPPROPRIATE BUSINESS MODELS OR STRATEGIES, INABILITY TO MEET COMPETITION EVEN IN A NORMAL MARKET, ETC., WHI CH ARE ALL ENDOGENOUS FACTORS THAT HAVE LITTLE DO WITH ECONOMIC CIRCUMSTANCES. 113. I FIND MERIT IN THE APPELLANTS CONTENTION THA T REVENUE IS NOT A TRUE INDICATOR OF A COMPANYS PERFORMANCE THAT MAY DEPEND ON ITS O WN BUSINESS CYCLE, AND THAT A COMPANY WITH INCREASING REVENUES OVER A PERIOD OF TIME DID NOT NECESSARILY REFLECT BETTER PERFORMANCE, AS INCREASE IN EXPENSES IN THE CORRESPONDING PERIOD COULD BE HIGHER THAN THAT IN REVENUES AND THE COMPA NY MIGHT STILL INCUR LOSSES. CONVERSELY, A COMPANY WITH DIMINISHING REVENUES OVE R A PERIOD OF TIME MAY NOT NECESSARILY BE PERFORMING, BADLY, IF IT STILL HAD A GOOD PROFIT MARGIN ACHIEVED THROUGH COST EFFICIENT. GROWTH OF THE INDIAN SOFTW ARE INDUSTRY CANNOT BE ATTRIBUTED SOLELY TO EXISTING COMPANIES, BUT ALSO TO NEW COMPA NIES BEING SET UP. 114. CONSIDERING THESE ASPECTS, I UPHOLD THE APPELL ANTS ARGUMENTS ON THIS ISSUE. HOWEVER, THE REJECTION OF M/S. MELSTAR INFO RMATION TECHNOLOGY LTD., IS UPHELD ON THE GROUND THAT IT HAD A NEGATIVE OPERATI NG MARGIN IN THE RELEVANT FY. THIS GROUND OF APPEAL IS DISMISSED. 5.3. GROUND NO. 6 ON ABNORMAL PROFIT WAS NOT SEPARA TELY ADJUDICATED AND THE ABOVE COMPARABLES CONTESTED IN GROUND WERE EXCL UDED ON TURNOVER FILTER. ON THE BASIS OF CO-ORDINATE BENCH DECISION , THE LD.CIT(A) HAS ADOPTED THE ABOVE FILTER WITH WHICH WE CONCUR. EVE N THOUGH, THE COMPANIES EXENSYS SOFTWARE SOLUTIONS LTD AND THIRD WARE SOLUTIONS LTD WERE ALSO EXCLUDED ON THIS FILTER, WE FIND THAT THE COMPANIES WERE OTHERWISE BEING EXCLUDED ON FUNCTIONALITY AS WELL, IN VARIOUS CO-ORDINATE BENCH IT(TP)A NO. 841/BANG/2013 & C.O. NO. 172/BANG/2015 PAGE 6 OF 9 DECISIONS FOR THIS ASSESSMENT YEAR. SO, THE REVENU ES CONTENTIONS ARE NOT ACCEPTABLE. GROUNDS ARE ACCORDINGLY REJECTED. 5.4. LEARNED COUNSEL ALSO PLACED A CHART ON RECORD INFORMING THAT VARIOUS COMPARABLES SELECTED BY THE TPO WERE ALSO R EJECTED IN CO- ORDINATE BENCH DECISIONS OF: I. SYSARRIS SOFTWARE P. LTD., VS. DCIT IN IT(TP)A NO. 1360/BANG/2011 & IT(TP)A NO. 85/BANG/2012; II. DCIT VS. KODIAK NETWORKS INDIA PVT. LTD., IN IT (TP)A NO. 532/BANG/2013 & C.O. NO. 119/BANG/2015; III. ADP PVT. LTD., VS. DCIT [62 TAXMANN.COM 352]; AND IV. DCIT VS. TEXTRON GLOBAL TECHNOLOGY CENTRE (P) L TD., [56 TAXMANN.COM 465] THE COMPANIES REJECTED BY THE LD.CIT(A) ARE ALSO RE JECTED IN THE ABOVE ORDERS ON FUNCTIONALITY AS WELL. CONSEQUENTLY, WE DO NOT FIND ANY MERIT IN REVENUES GROUND NOS. 5, 6, 7, 10, 11 & 12. ACCORD INGLY, THEY ARE REJECTED. 6. GROUND NOS. 8 & 9 ARE AS UNDER: 8. THE CIT(A) ERRED IN COMPUTATION OF THE MARGINS OF M/S. QUINTEGRA SOLUTIONS LTD., BY DETERMINING THE SAME AS AVERAGE OF MARGINS OF 6.85% AND 10.68% FOR FY ENDED 30/09/2004 AND 30/09/2005 R ESPECTIVELY, IN VIEW OF THE FACT THAT AN AVERAGE CANNOT REPRESENT THE AR MS LENGTH MARGIN OF ANY COMPARABLE COMPANY FOR THE PURPOSE OF ARMS LENGTH MARGIN IT(TP)A NO. 841/BANG/2013 & C.O. NO. 172/BANG/2015 PAGE 7 OF 9 DETERMINATION, AND ALSO SINCE THE SAME IS CONTRADIC TORY TO CIT(A)S OWN DECISION WHO HAS UPHELD THE REJECTION BY THE TPO OF A MULTIPLE YEARS DATA AND USE OF ONLY CURRENT YEARS DATA FOR THE PURPOSE OF TP ANALYSIS. 9. THE HON'BLE CIT(A) HAS ERRED IN HOLDING THAT THE DIFFERENT ACCOUNTING YEAR FILTER, WAS AN INAPPROPRIATE FILTER FOR THE PU RPOSE OF COMPARABILITY ANALYSIS. 6.1. TPO EXCLUDED THE ABOVE COMPARABLES ON THE REAS ON OF HAVING ACCOUNTS OF DIFFERENT FINANCIAL YEARS AND WAS DIFFI CULT TO COMPARE THE FINANCIAL RESULTS. ASSESSEES CONTENTION THAT ACCO UNTING STANDARD (AS) 21 ISSUED BY THE ICAI ON CONSOLIDATION OF ACCOUNTS AS WELL AS SECTION 212 OF THE COMPANIES ACT PERMIT DIFFERENCE IN THE DATES OF FINANCIAL YEAR CLOSURE OF COMPANIES WITHIN A SIX MONTHS TIME FRAME. LD.CI T(A) ACCEPTED THE ABOVE CONTENTION AND DIRECTED TO INCLUDE. REVENUE IS AGGRIEVED. 6.2. ON CONSIDERING THE RIVAL CONTENTIONS AND ORDER OF LD.CIT(A), WE ARE OF THE OPINION THAT THE TPO IS CORRECT IN REJECTING THIS COMPARABLE ON THE DIFFERENT FINANCIAL YEAR FILTER. AS 21 MAY ALLOW C ONSIDERATION OF ACCOUNTS AND COMPANY LAW MAY PERMIT HAVING DIFFERENT FINANCI AL YEAR ENDING FOR CONSOLIDATION ACCOUNTS, BUT THE DATA AVAILABLE IN P UBLIC DOMAIN CANNOT BE ADJUSTED TO THE FINANCIAL YEAR OF ASSESSEE-COMPANY. THERE MAY BE MANY FACTORS WHICH MAY AFFECT THE RESULTS IN THE INTERVE NING PERIOD. UNLESS THE DATA IS COMPLETELY AVAILABLE, AVERAGING THE FINANCI AL RESULTS TO SUIT ASSESSEES FINANCIAL YEAR MAY GIVE A DISTORTED PICT URE. SINCE THE PUBLIC DATA AVAILABLE PERTAIN TO A DIFFERENT FINANCIAL YEA R, WE ARE OF THE OPINION THAT THE SAME CAN NOT BE CONSIDERED AS COMPARABLE IN THE ABSENCE OF SUITABLE IT(TP)A NO. 841/BANG/2013 & C.O. NO. 172/BANG/2015 PAGE 8 OF 9 FINANCIAL DATA. WE DIRECT THE SAME TO BE EXCLUDED F ROM THE LIST OF COMPARABLES. WE ALSO FIND THAT THIS COMPANY IS NOT SELECTED AS A COMPARABLE IN THE SIMILAR CASES IN THIS ASSESSMENT YEAR. 7. GROUND NO. 13 IS AS UNDER: 13. THE LEARNED CIT(A) ERRED IN DIRECTING INCLUSION OF THE M/S. VJIL CONSULTING LTD., REJECTING THE TPOS CONCLUSION THA T THE COMPANY DOES NOT SATISFY THE QUALITATIVE FILTERS APPLIED FOR THE PUR POSE OF COMPARABILITY ANALYSIS AND THEREFORE IS AN INAPPROPRIATE COMPARAB LE FOR THE PURPOSE OF DETERMINING THE ARMS LENGTH PRICE. 7.1. THE ISSUE ON THIS GROUND IS WITH REFERENCE TO INCLUSION OF THE ABOVE COMPANY, REJECTING THE TPOS CONTENTIONS. TPO AFTE R FINDING THE COMPANY AS A COMPARABLE HAS REJECTED THE SAME IN THE FINAL LIST ON THE BASIS OF VAT PAYMENTS INDICATING PRODUCT SALES. IT WAS CLARIFIE D BY ASSESSEE BEFORE LD.CIT(A) THAT THE VAT PAYMENTS WERE MADE IN UK AND NOT IN INDIA. LD.CIT(A) ACCEPTED THE SAME. 7.2. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE AR E OF THE OPINION THAT THAT THE COMPANY CAN BE EXCLUDED, AS THERE IS NO CLARITY ON WHY THE VAT WAS PAID BE IT IN UK OR INDIA. THE SAME COMPANY WAS RE JECTED IN OTHER SIMILARLY PLACED COMPANIES AND WE DO NOT FIND ANY CASE IN WHI CH THIS COMPANY IS SELECTED AS COMPARABLE. CONSEQUENTLY, WE ARE OF TH E OPINION THAT THIS COMPANY HAS TO BE EXCLUDED. WE ORDER ACCORDINGLY. REVENUES GROUND IS ALLOWED. 8. IN THE CROSS-OBJECTION, ASSESSEE RAISED MANY GRO UNDS. LEARNED COUNSEL FAIRLY ADMITTED THAT THE ISSUES RAISED ARE ACADEMIC IN NATURE, AS IT(TP)A NO. 841/BANG/2013 & C.O. NO. 172/BANG/2015 PAGE 9 OF 9 VARIOUS ISSUES ARE ALREADY CONSIDERED BY THE LD.CIT (A) ON THE BASIS OF COORDINATE BENCH DECISIONS. CONSEQUENTLY, WE TREAT THE CROSS-OBJECTION AS ACADEMIC AND DISMISS THE SAME. 9. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOWE D AND ASSESSEES CROSS-OBJECTION IS REJECTED. PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF MARCH, 2016 SD/- SD/- (NARENDRA KUMAR CHOUDHURY) (B. RAMAKOTAI AH) JUDICIAL MEMBER ACCOUNTA NT MEMBER BANGALORE, DATED, THE 18 TH MARCH, 2016. TNMM COPY TO: 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.