M/s. Aris Global software Pvt. Ltd., Bangalore V. Income Tax Officer, Bangalore

CO 31/BANG/2016

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 2901 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-04-2017
• Assessment Year: misc
• Appeal Filed On: 08-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADAMCHAND KHINCHA
• Assessee Lawyers: G R REDDY BENGALURU
• Keywords: Transfer pricing
• Section: 143(3); 10; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER IT(TP)A NO.94/BANG/2014 ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER, WARD 11(1), BANGALORE. VS. M/S ARIS GLOBAL SOFTWARE PRIVATE LTD., NO.19/2, 15 TH CROSS, DOLLARS COLONY, J P NAGAR 4 TH PHASE, BANGALORE 560 078. PAN: AAECA 7218F APPELLANT RESPONDENT CO NO.31/BANG/2016 [IN IT(TP)A NO.94/BANG/2014] ASSESSMENT YEAR : 2009-10 M/S ARIS GLOBAL SOFTWARE PRIVATE LTD., BANGALORE 560 078. PAN: AAECA 7218F VS. THE INCOME TAX OFFICER, WARD 11(1), BANGALORE. CROSS OBJECTOR RESPONDENT APPELLANT BY : SHRI G.R. REDDY, CIT(DR)(ITAT)-1, BENGALURU RESPONDENT BY : SHRI PADAM CHAND KHINCHA, CA DATE OF HEARING : 04.04.2017 DATE OF PRONOUNCEMENT : 28.04.2017 IT(TP)A NO. 94 & CO 31/BANG/2016 PAGE 2 OF 12 O R D E R PER A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE AND THESE ARE DIRECTED AGAINST THE ASS ESSMENT ORDER DATED 03.01.2014 PASSED BY THE ASSESSING OFFICER FOR THE ASSESSMENT YEAR 2009- 10 U/S. 143(3) R.W.S. 144C (13) OF THE INCOME-TAX A CT, 1961. 2. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL S ARE AS UNDER:- 1. THE DIRECTION OF THE DRP IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE DRP ERRED IN DIRECTING THE INCLUSION OF THI NK SOFT GLOBAL SERVICES LIMITED AS COMPARABLES WITHOUT APPR ECIATING THE FACT THAT THE TPO HAD EXCLUDED THE COMPANIES AS RUL E 10B(3) REQUIRES THAT NOT ONLY THE TRANSACTIONS BUT THE ENT ERPRISES SHOULD ALSO BE COMPARABLE IN TNMM. 3. THE DRP ERRED IN DIRECTING THE AO TO CARRY OUT THE WORKING CAPITAL ADJUSTMENT AS PER THE ACTUAL FIGURE S WORKED OUT BY THE ASSESSEE WITHOUT PUTTING ANY CAP ON THE GROU ND THAT THERE IS TIME VALUE OF MONEY WITHOUT APPRECIATING THE FAC T THAT THE TPO HAD PUT A CAP ON THE BASIS OF THE AVERAGE COST OF W ORKING CAPITAL OF THE COMPARABLES SELECTED BY THE TPO AND THAT THE ACCURATE DETAILS OF DEBTORS AND CREDITORS OF THE AS SESSEE AND THE COMPARABLES WERE NOT AVAILABLE. 4. THE DRP ERRED IN DIRECTING THE AO TO FOLLOW THE RATIO OF THE HON'BLE COURT IN THE CASE OF TATA ELXSI LIMITED 349 ITR 98 AND EXCLUDE RS. 35,85,192 AND RS. 55,73,381 BEING T HE LEASE LINE EXPENSES AND EXPENDITURE INCURRED IN FOREIGN CURREN CY FROM THE TOTAL TURNOVER ALSO WHILE COMPUTING THE DEDUCTION U /S 10A OF THE I.T. ACT AS THE DECISION OF THE HIGH COURT IS BINDI NG, WITHOUT APPRECIATING THE FACT THAT THERE IS NO PROVISION IN SECTION 10A THAT SUCH EXPENSES SHOULD BE REDUCED FROM THE TOTAL TURN OVER ALSO, AS CLAUSE (IV) OF THE EXPLANATION TO SECTION 10A PROVI DES THAT SUCH EXPENSES ARE TO BE REDUCED ONLY FROM THE EXPORT TUR NOVER. IT(TP)A NO. 94 & CO 31/BANG/2016 PAGE 3 OF 12 5. THE DRP ERRED IN NOT APPRECIATING THE FACT THAT THE JURISDICTIONAL HIGH COURT'S DECISION IN THE CASE OF TATA ELXSI LIMITED 349 ITR 98 HAS NOT BEEN ACCEPTED BY THE DEP ARTMENT AND AN APPEAL HAS BEEN FILED BEFORE THE HON'BLE SUPREME COURT. 6. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING. IT IS HUMBLY PRAYED THAT THE DIREC TIONS OF THE DRP BE REVERSED. 7. THE APPELLATE CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL. 3. THE GROUNDS RAISED BY THE ASSESSEE IN ITS CROSS OBJECTION ARE AS UNDER:- 1. THE ORDER OF ASSESSING OFFICER ('AO') AND TRANS FER PRICING OFFICER ('TPO') PURSUANT TO DIRECTIONS OF D ISPUTE RESOLUTION PANEL ['DRP'], BANGALORE [COLLECTIVELY R EFERRED TO AS LOWER AUTHORITIES'] TO THE EXTENT PREJUDICIAL TO TH E RESPONDENT IS BAD IN LAW. 2. THE LEARNED DRP HAS ERRED IN CONFIRMING THE ACTI ON OF THE AO IN MAKING A REFERENCE TO TRANSFER PRICING OFFICE R ('TPO') FOR DETERMINING THE ARM'S LENGTH PRICE WITHOUT DEMONSTR ATING AS TO HOW OR WHY IT WAS NECESSARY AND EXPEDIENT TO DO SO. 3. THE LEARNED DRP, HAS ERRED IN CONFIRMING THE ACT ION OF THE AO AND TPO IN: A. NOT APPRECIATING THAT THE CHARGING OR COMPUTATI ON PROVISION RELATING TO INCOME UNDER THE HEAD 'PROFITS & GAINS OF BUSINESS OR PROFESSION' DO NOT REFER TO OR INCLUDE THE AMOUNTS COMPUTED UNDER CHAPTER X AND THEREFORE THE ADDITION MADE UNDER CHAPTER X IS BAD IN LAW; AND B. PASSING THE ORDER WITHOUT DEMONSTRATING THAT THE RESPONDENT HAD ANY MOTIVE OF TAX EVASION; IT(TP)A NO. 94 & CO 31/BANG/2016 PAGE 4 OF 12 4. THE LEARNED DRP HAS ERRED IN CONFIRMING THE ACT ION OF THE TPO IN: A. REJECTING COMPARABLES SELECTED AND TRANSFER PRICING ANALYSIS UNDERTAKEN BY THE RESPONDENT ON UNJUSTIFIABLE GROUN DS AND CONDUCTING A FRESH TRANSFER PRICING ANALYSIS; B. ADOPTING INAPPROPRIATE FILTERS LIKE ONE SIDED T URNOVER FILTER OF 1 CRORE TO INFINITY, PERSISTENT LOSS FILTER, 25% RP T FILTER, ETC., FOR SELECTING COMPARABLES. C. ADOPTING COMPANIES LIKE PERSISTENT SYSTEMS LIMIT ED, TATA ELXSI LIMITED, KALS INFORMATION SYSTEMS LIMITED, SA SKEN COMMUNICATION AND INFOSYS LTD EVEN THOUGH THEY ARE NOT COMPARABLE IN TERMS OF FUNCTIONS PERFORMED, RISKS A SSUMED, ASSETS UTILIZED, SIZE, HIGH TURNOVER ETC; D. ADOPTING BODHTREE CONSULTING LIMITED AS A COMPARABL E EVEN THOUGH IT IS FUNCTIONALLY DIFFERENT FROM THE RESPON DENT AND HAS FLUCTUATING MARGINS DUE TO DIFFERENT REVENUE RE COGNITION MODEL; AND E. NOT MAKING PROPER ADJUSTMENT FOR ENTERPRISE LEV EL AND TRANSACTIONAL LEVEL DIFFERENCES BETWEEN THE RESPOND ENT AND THE COMPARABLE COMPANIES. 4. REGARDING APPEAL OF THE REVENUE, IT WAS SUBMITTE D BY THE LD. DR OF REVENUE THAT GROUND NO.1 IS GENERAL IN NATURE. REG ARDING GROUND NO.2, HE SUPPORTED THE ORDER PASSED BY THE TPO. LEARNED AR O F ASSESSEE SUPPORTED THE DIRECTIONS OF THE DRP AND IN THIS REG ARD, HE HAS DRAWN OUR ATTENTION TO PAGE 13 OF DIRECTIONS OF DRP. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AS PER THE ORDER OF TPO AT PAGE NO.11 & 12, IT IS NOTED BY HIM THAT THIS COMPANY IS FUNCTIONALLY SIMILAR TO THE ASSESSEE BUT HE HAS EXC LUDED THIS COMPARABLE ON IT(TP)A NO. 94 & CO 31/BANG/2016 PAGE 5 OF 12 THIS BASIS THAT WORKING CAPITAL ADJUSTMENT IS MORE THAN 4% OF THE PROFIT AND THEREFORE, HE CONCLUDED THAT BECAUSE OF THIS REASON THAT WORKING CAPITAL ADJUSTMENT IS MORE THAN 4% OF PROFIT, THE ACTIVITY OF THIS COMPANY IS NOT FOR EARNING PROFIT FROM CORE OPERATING ACTIVITIES AND I T IS FROM FINANCIAL ACTIVITY. AS AGAINST THIS, IT IS HELD BY DRP THAT IN VIEW OF THIS DECISION OF DRP THAT WORKING CAPITAL ADJUSTMENT SHOULD BE CARRIED OUT ON ACTUAL BASIS WITHOUT CAPPING, THE EXCLUSION OF THIS COMPANY ON THIS BASI S THAT WORKING CAPITAL ADJUSTMENT IS IN EXCESS OF 4% IS NOT JUSTIFIED. 6. IN OUR CONSIDERED OPINION, THIS FINDING OF DRP I S WITHOUT ANY INFIRMITY BECAUSE ONCE WORKING CAPITAL ADJUSTMENT IS MADE ON THE BASIS OF ACTUAL, THE REMAINING PROFIT MARGIN IS ONLY FROM CORE OPERA TING ACTIVITIES AND AS A RESULT, THE COMPANY HAS TO BE ACCEPTED AS A GOOD CO MPARABLE. IN THIS VIEW OF THE MATTER, WE DECLINE TO INTERFERE ON THIS ISSU E. ACCORDINGLY, GROUND NO.2 OF REVENUES APPEAL IS REJECTED. 7. REGARDING GROUND NO.3, THE LD. DR OF REVENUE SUP PORTED THE ORDER OF AO/TPO WHEREAS THE LD. AR OF ASSESSEE SUPPORTED THE ORDER OF DRP. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AS PER THE ORDER OF TPO ON PAGE 16 & 17, IT IS STATED BY THE T PO IN PARA 3.7 THAT THE WORKING CAPITAL ADJUSTMENT IS RESTRICTED TO AVERAGE COST OF CAPITAL COMPUTED AT 1.71% IN THE CASE OF UNCONTROLLED COMPARABLES SE LECTED BY THE TPO. THEREAFTER, HE HAS STATED THAT CALCULATION IS AS PE R ANNEXURE-C. BUT THIS COPY OF ANNEXURE-C IS NOT AVAILABLE ON RECORD. WE FIND THAT THE SAME IS IT(TP)A NO. 94 & CO 31/BANG/2016 PAGE 6 OF 12 NOT ENCLOSED WITH THE ORDER OF TPO AND IN THE ASSES SEES PAPER BOOK ALSO, COPY OF TPOS ORDER IS AVAILABLE ON PAGES 219 TO 29 5 BUT THERE ALSO, ANNEXURE-C OF TPOS ORDER IS NOT AVAILABLE. UNDER THESE FACTS, WE DO NOT KNOW AS TO WHAT IS THE BASIS OF THIS PERCENTAGE OF 1.71% WORKED OUT BY THE TPO IN RESPECT OF UNCONTROLLED COMPARABLES SELECTED BY THE TPO. THE DRP HAS HELD ON PAGE 50 OF ITS DIRECTIONS THAT THE ASSESSEE HAS FILED A PETITION U/S. 154 REQUESTING THE TPO TO RECTIFY THE WORKING CAPITAL ADJUSTMENT AND AFTER NOTING THESE FACTS, THE DRP DI RECTED THE TPO TO CONSIDER THE RECTIFICATION PETITION ON MERITS AND D ISPOSE THE SAME IF IT HAS NOT BEEN DONE TILL THAT POINT OF TIME. IT IS THE SUBMISSION OF THE LD. AR BEFORE US THAT TILL NOW, IT IS NOT DISPOSED OF BY T HE TPO. BE THAT AS IT MAY, BUT IN VIEW OF THIS DIRECTION OF DRP AS PER WHICH T PO WAS DIRECTED TO DISPOSE OF THE ASSESSEES PETITION FOR RECTIFICATIO N U/S. 154 IN RESPECT OF WORKING CAPITAL ADJUSTMENT, WE FIND NO INFIRMITY IN THE DIRECTIONS OF THE DRP AND THEREFORE, GROUND NO.3 OF THE REVENUES APPEAL IS REJECTED. 9. REGARDING GROUND NOS.4 & 5 OF REVENUES APPEAL, THE LD. DR OF REVENUE SUPPORTED THE ORDER OF AO WHEREAS IT IS SUB MITTED BY THE LD. AR OF ASSESSEE THAT THIS ISSUE IS NOW SQUARELY COVERED IN FAVOUR OF ASSESSEE BY THE JUDGMENT OF HONBLE KARNATAKA HIGH COURT RENDER ED IN THE CASE OF TATA ELXSI LTD. AS REPORTED IN 349 ITR 98. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT THIS DIRECTION OF DRP TO THE TPO IS THAT THE TWO AMOUNTS OF RS.35,85,192 AND IT(TP)A NO. 94 & CO 31/BANG/2016 PAGE 7 OF 12 RS.55,73,381 BEING THE LEASE LINE EXPENSES AND EXPE NDITURE INCURRED IN FOREIGN CURRENCY WHICH WERE REDUCED BY THE AO/TPO F ROM THE EXPORT TURNOVER SHOULD ALSO BE REDUCED FROM THE TOTAL TURN OVER. AS PER THE JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT RENDER ED IN THE CASE OF TATA ELXSI LTD. (SUPRA) , IT WAS HELD THAT TOTAL TURNOVER IS SUM TOTAL OF E XPORT TURNOVER AND DOMESTIC TURNOVER AND THEREFORE, IF AN AMOUNT IS REDUCED FROM EXPORT TURNOVER, THEN THE TOTAL TURNOVER ALSO GOES DOWN BY THE SAME AMOUNT AUTOMATICALLY. RESPECTFULLY FOLLOWING THIS JUDGMENT OF THE HONBLE KARNATAKA HIGH COURT, WE DECLINE TO INTERFERE ON TH IS ISSUE ALSO. ACCORDINGLY, GROUND NOS. 4 & 5 OF REVENUES APPEAL ARE ALSO REJECTED. 11. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISS ED. 12. NOW WE TAKE UP THE CROSS OBJECTION FILED BY THE ASSESSEE. IT IS SUBMITTED BY THE LD. AR OF ASSESSEE THAT AS PER THE TPO, THERE ARE 11 COMPARABLES, OUT OF WHICH, THE ASSESSEE HAS REQUEST ED FOR EXCLUSION OF 6 COMPARABLES I.E., BODHTREE CONSULTING LTD., KALS IN FORMATION SYSTEMS LTD., TATA ELXSI LTD. (SEG.), SASKEN COMMUNICATION TECHNOLOGIES LTD. (SEG.), PERSISTENT SYSTEMS LTD. AND INFOSYS LTD. 13. OUT OF THESE 6 COMPARABLES FOR WHICH THE ASSESS EE IS REQUESTING FOR EXCLUSION, ONE COMPANY I.E., KALS INFORMATION SYSTE MS LTD. HAS TO BE EXCLUDED BECAUSE OF LOW TURNOVER FILTER, BECAUSE TH IS COMPANY IS HAVING TURNOVER OF ONLY RS.2.14 CRORES, WHEREAS THE ASSESS EE COMPANY IS HAVING IT(TP)A NO. 94 & CO 31/BANG/2016 PAGE 8 OF 12 A TURNOVER OF RS.69.07 CRORES AND THEREFORE, TURNOV ER OF THIS COMPANY IS LESS THAN 1/10 TH OF TURNOVER OF THE ASSESSEE COMPANY. 14. IT WAS FURTHER SUBMITTED THAT TURNOVER OF INFOS YS LTD. IS OF RS.20,264 CRORES AND THEREFORE, THIS COMPANY HAS TO BE EXCLUD ED ON ACCOUNT OF HIGH TURNOVER FILTER. 15. THEREAFTER, HE SUBMITTED THAT THREE MORE COMPAN IES I.E., ZYLOG SYSTEMS LTD., MINDTREE LTD. AND LARSEN & TOUBRO INF OTECH ARE ALSO HIT BY HUGE TURNOVER FILTER AND THEREFORE, THESE 3 COMPARA BLES MAY ALSO BE EXCLUDED BY APPLYING HIGH TURNOVER FILTER. ALTHOUG H AS PER ASSESSEE, THESE ARE GOOD COMPARABLES AND THEY ARE FUNCTIONALLY SIMI LAR. 16. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF A UTHORITIES BELOW. 17. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE FIND THAT THIS TRIBUNAL IS APPLYING TURNOVER FILTER AS PER WHICH A NY COMPARABLE COMPANY WHOSE TURNOVER IS EITHER LESS THAN 1/10 TH OF THE TURNOVER OF THE TESTED PARTY OR MORE THAN 10 TIMES OF THE TURNOVER OF THE TESTED PARTY, ARE TO BE EXCLUDED FROM THE LIST OF FINAL COMPARABLES BY APPL YING THIS TURNOVER FILTER. ACCORDINGLY, WE DIRECT THE AO/TPO TO EXCLUDE THESE 5 COMPANIES FROM THE LIST OF FINAL COMPARABLES VIZ., (1) KALS INFORMATIO N SYSTEMS LTD. (2) ZYLOG SYSTEMS LTD. (3) MINDTREE LTD. (SEG.) (4) LARS EN & TOUBRO INFOTECH (5) INFOSYS LTD. IT(TP)A NO. 94 & CO 31/BANG/2016 PAGE 9 OF 12 18. REGARDING REMAINING 4 COMPANIES I.E., BODHTREE CONSULTING LTD., TATA ELXSI LTD. (SEG.), SASKEN COMMUNICATION TECHNO LOGIES LTD. AND PERSISTENT SYSTEMS LTD. AND IT IS THE ARGUMENT OF T HE LD. AR OF ASSESSEE THAT THESE COMPANIES SHOULD BE EXCLUDED ON ACCOUNT OF FUNCTIONAL DISSIMILARITY. RELIANCE HAS BEEN PLACED ON THE TRI BUNALS ORDER RENDERED IN THE CASE OF ARM EMBEDDED TECHNOLOGIES P. LTD. V. DCIT, TS-466- ITAT- 2015 (BANG)-TP (COPY AVAILABLE ON PAGES 573 TO 591 OF PB) IN SUPPORT OF THE REQUEST FOR EXCLUSION OF BODHTREE CONSULTING LT D. FOR EXCLUSION OF TATA ELXSI LTD. ALSO, RELIANCE HAS BEEN PLACED ON THE SA ME TRIBUNALS ORDER. FOR EXCLUSION OF SASKEN COMMUNICATION TECHNOLOGIES LTD. , RELIANCE HAS BEEN PLACED ON THE TRIBUNALS ORDER RENDERED IN THE CASE OF DCT V. PLANET ONLINE PVT. LTD. AS REPORTED IN 56 TAXMANN.COM 202 (HYD) . FOR EXCLUSION OF PERSISTENT SYSTEMS LTD., RELIANCE HAS BEEN PLACED O N THE TRIBUNALS ORDER RENDERED IN THE CASE OF INFINERA INDIA PVT. LTD. V. ITO AS REPORTED IN TS- 476-ITAT-2016 (BANG) TP. 19. REGARDING EXCLUSION OF BODHTREE CONSULTING LTD. , WE FIND THAT AS PER TRIBUNALS ORDER RENDERED IN THE CASE OF ARM EMBEDDED TECHNOLOGIES P. LTD. (SUPRA) AND CISCO SYSTEMS (INDIA) PRIVATE LTD. V. DCIT, TS-246- ITAT-2014(BANG)-TP, THIS COMPANY IS FUNCTIONALLY DIFFERENT. THOSE TWO COMPANIES I.E., ARM EMBEDDED TECHNOLOGIES P. LTD. (SUPRA) AND CISCO SYSTEMS (INDIA) PRIVATE LTD. WERE ALSO ENGAGED IN P ROVIDING SOFTWARE DEVELOPMENT SERVICES AND THEREFORE, THE FACTS BEING SIMILAR, RESPECTFULLY FOLLOWING THOSE TWO TRIBUNAL ORDERS, WE DIRECT THE AO/TPO THAT IN THE IT(TP)A NO. 94 & CO 31/BANG/2016 PAGE 10 OF 12 PRESENT CASE ALSO, THIS COMPANY I.E., BODHTREE CONS ULTING LTD. SHOULD BE EXCLUDED FROM THE LIST OF FINAL COMPARABLES. 20. IN RESPECT OF EXCLUSION OF TATA ELXSI LTD., REL IANCE HAS BEEN PLACED ON THE TRIBUNALS ORDER RENDERED IN THE CASE OF INFINERA INDIA PVT. LTD. (SUPRA) , COPY AVAILABLE ON PAGES 592 TO 611 OF PB. WE FI ND THAT THIS TRIBUNAL ORDER IS ALSO OF THE SAME ASSESSMENT YEAR AND IN THIS TRIBUNAL ORDER ALSO, THE TRIBUNAL HAD CONSIDERED THE DECISIO N RENDERED IN THE CASE OF CISCO SYSTEMS (INDIA) PRIVATE LTD. (SUPRA) AND HELD THAT THIS COMPANY IS FUNCTIONALLY DIFFERENT. 21. WE HAVE ALREADY SEEN THAT IN THE CASE OF CISCO SYSTEMS (INDIA) PRIVATE LTD. (SUPRA) , THE ASSESSEE COMPANY WAS ENGAGED IN RENDERING SOFTWARE DEVELOPMENT SERVICES AND THEREFORE, RESPEC TFULLY FOLLOWING THIS TRIBUNALS ORDER, WE HOLD THAT IN THE PRESENT CASE ALSO, THIS COMPANY I.E., TATA ELXSI LTD. SHOULD BE EXCLUDED FROM THE LIST OF FINAL COMPARABLES FOR THE REASON THAT THIS COMPANY IS NOT FUNCTIONALLY SIMILA R TO THE PRESENT ASSESSEE COMPANY. 22. REGARDING EXCLUSION OF SASKEN COMMUNICATION TEC HNOLOGIES LTD., RELIANCE HAS BEEN PLACED ON THE TRIBUNAL ORDER REND ERED IN THE CASE OF DCT V. PLANET ONLINE PVT. LTD. (SUPRA) , COPY AVAILABLE ON PAGES 612 TO 638 OF PB. AS PER PARA 2 OF THIS TRIBUNAL ORDER, THAT COMPANY WAS ENGAGED IN PROVIDING SOFTWARE DEVELOPMENT SERVICES TO ITS AE A ND THEREFORE, THE FUNCTIONAL PROFILE OF THAT ASSESSEE AND THE PRESENT ASSESSEE IS SIMILAR. IT IT(TP)A NO. 94 & CO 31/BANG/2016 PAGE 11 OF 12 WAS HELD BY THE TRIBUNAL IN THAT CASE IN PARA 10.10 THAT THE ENTIRE ANNUAL REPORT OF THAT COMPANY HAS NOT BEEN PLACED BEFORE T HE TRIBUNAL AND THEREFORE, THE TRIBUNAL FOUND ITSELF NOT IN A POSIT ION TO GIVE A CONCLUSIVE FINDING IN THIS REGARD AND THE TRIBUNAL RESTORED BA CK THE MATTER TO AO/TPO FOR A FRESH DECISION. SIMILARLY, IN THE PRESENT CA SE ALSO, WE RESTORE THIS MATTER BACK TO AO/TPO FOR A FRESH DECISION. 23. REGARDING EXCLUSION OF PERSISTENT SYSTEMS LTD., RELIANCE HAS BEEN PLACED ON THE TRIBUNAL ORDER RENDERED IN THE CASE O F INFINERA INDIA PVT. LTD. (SUPRA) , COPY AVAILABLE ON PAGES 592 TO 611 OF PB. AS PER THIS TRIBUNAL ORDER, IT IS SEEN THAT THE TRIBUNAL FOLLOWED ANOTHE R TRIBUNAL ORDER RENDERED IN THE CASE OF UNISYS INDIA PVT. LTD. IN IT(TP)A NO.67(BANG)/2015 AND IT WAS HELD THAT THIS COMPANY I.E., PERSISTENT SYSTEMS LTD. IS IN PRODUCT DESIGNING SERVICES AND IS ALSO PROVIDING SOFTWARE P RODUCT DEVELOPMENT AND THEREFORE, THE SAME CANNOT BE A GOOD COMPARABLE WIT H THE COMPANY WHICH IS PROVIDING ONLY SOFTWARE DEVELOPMENT SERVICES TO ITS AE. RESPECTFULLY FOLLOWING THIS TRIBUNAL ORDER, WE HOLD THAT IN THE PRESENT CASE ALSO, PERSISTENT SYSTEMS LTD. IS NOT A GOOD COMPARABLE AN D THEREFORE, THE SAME SHOULD BE EXCLUDED FROM THE LIST OF FINAL COMPARABL ES. 24. AS PER THE ABOVE DISCUSSION, THE TPO SHOULD EXC LUDE BODHTREE CONSULTING LTD., TATA ELXSI LTD. AND PERSISTENT SYS TEMS LTD. ALSO AND HE SHOULD DECIDE AFRESH THE MATTER REGARDING COMPARABI LITY OF SASKEN IT(TP)A NO. 94 & CO 31/BANG/2016 PAGE 12 OF 12 COMMUNICATION TECHNOLOGIES LTD. AND THEN WORK OUT T HE ALP AND THE REQUIRED TP ADJUSTMENT, IF ANY. 25. IN THE RESULT, THE CO OF ASSESSEE STANDS ALLOWE D FOR STATISTICAL PURPOSES IN THE TERMS INDICATED ABOVE. 26. IN THE COMBINED RESULT, THE APPEAL OF REVENUE I S DISMISSED AND CO OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF APRIL, 2017. SD/- SD/- (LALIET KUMAR) ( A.K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 28 TH APRIL, 2017. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.