M/s.IGEFI Software India Private Limited, Bangalore V. ITO,Ward-11(2), Bangalore

CO 60/BANG/2016

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3176 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 21 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 17-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 21-08-2017
• Assessment Year: misc
• Appeal Filed On: 26-10-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B R RAMESH
• Assessee Lawyers: NARENDRA JAIN
• Keywords: Transfer pricing; Opportunity of being heard; Principle of natural justice
• Section: 92C; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBERAN D SHRI LALIET KUMAR, JUDICIAL MEMBER IT (TP)A NO. 461/BANG/2013 ASSESSMENT YEAR : 2005 - 06 THE INCOME TAX OFFICER, WARD 3(1)(2), BANGALORE. VS. M/S. IGEFI SOFTWARE INDIA PVT. LTD., (ERSTWHILE M/S. FINCH SOFTWARE INDIA PVT. LTD.) NO. 3, SAFINA TOWERS, 2 ND , 3 RD , 4 TH AND 5 TH FLOOR, ALI ASKAR ROAD, VASANTH NAGAR, NEAR HIGH GROUNDS, BANGALORE 560 052. PAN: AAACF 4678A APPELLANT RESPONDENT C.O. NO. 60/BANG/2016 (IN IT(TP)A NO. 461/BANG/2013) ASSESSMENT YEAR : 2005 - 06 M/S. IGEFI SOFTWARE INDIA PVT. LTD., (ERSTWHILE M/S. FINCH SOFTWARE INDIA PVT. LTD.) NO. 3, SAFINA TOWERS, 2 ND , 3 RD , 4 TH AND 5 TH FLOOR, ALI ASKAR ROAD, VASANTH NAGAR, NEAR HIGH GROUNDS, BANGALORE 560 052. PAN: AAACF 4678A VS. THE INCOME TAX OFFICER, WARD 11(2), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI NARENDRA JAIN, CA REVENUE BY : SHRI B.R. RAMESH, JCIT (DR) DATE OF HEARING : 13 . 1 1 .201 7 DATE OF PRONOUNCEMENT : 1 7 .1 1 .2017 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS IS A REVENUES APPEAL AND CO IS FILED BY THE A SSESSEE AND THESE ARE DIRECTED AGAINST THE ORDER OF LD. CIT (A) IV, BAN GALORE DATED 29.01.2013 FOR ASSESSMENT YEAR 2005-06. IT(TP)A NO. 461/BANG/2013 & C.O. NO. 60/BANG/2016 PAGE 2 OF 8 2. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL ARE AS UNDER. 1. THE ORDER OF THE LEARNED CIT (APPEALS), IN SO FA R AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE, IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE CIT(A) ERRED IN DIRECTING THE AO TO EXCLUDE FROM THE TOTAL TURNOVER EXPENSES EXCLUDED FROM THE EXPORT TURNOVER AND ACCORDINGLY MODIFY THE COMPUTATION OF RELIEF ALLOWABLE UNDER SE CTION 10A. 3. THE LD. CIT(A) ERRED IN NOT APPRECIATING THAT TH ERE IS NO PROVISION IN SECTION 10A WHICH REQUIRES THE CONCERNED EXPENSE S, WHICH ARE REQUIRED TO BE REDUCED FROM THE EXPORT TURNOVER AS PER CLAUSE (IV) OF THE EXPLANATION TO SECTION 10A TO BE REDUCED FROM T HE TOTAL TURNOVER ALSO. 4. THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FAC T THAT THE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF M /S TATA ELXSI LTD. RELIED UPON BY HIM HAS NOT BEEN ACCEPTED BY THE DEP ARTMENT AND A SLP HAS BEEN FILED BEFORE THE HON'BLE SUPREME COURT WHICH IS PENDING. 5. THE CIT(A) ERRED IN HOLDING THAT EXENSYS SOFTWAR E SOLUTIONS LIMITED, FLEXTRONICS LIMITED, IGATE GLOBAL SOLUTION S LIMITED, L&T INFOTECH LIMITED, SATYAM COMPUTER SERVICES LIMITED, INFOSYS TECHNOLOGIES LIMITED AND THIRDWARE SOLUTIONS LIMITE D SHOULD NOT BE TAKEN AS COMPARABLES. 6. THE CIT (A), IN THE FACTS AND CIRCUMSTANCES OF T HE CASE, ERRED IN HOLDING THAT INTERTEC COMMUNICATIONS LIMITED SHOULD BE CONSIDERED AS A COMPARABLE. 7. THE CIT (A), IN THE FACTS AND CIRCUMSTANCES OF T HE CASE, ERRED IN HOLDING THAT BODHTREE CONSULTING LIMITED SHOULD BE EXCLUDED FROM THE LIST OF COMPARABLES BEING FUNCTIONALLY DIFFERENT. 8. THE CIT (A), IN THE FACTS AND CIRCUMSTANCES OF T HE CASE. ERRED IN HOLDING THAT THE SET OF 8 CORNPARABLES LISTED OUT B Y HIM SHOULD BE CONSIDERED FOR DETERMINATION OF THE AVERAGE MARGIN OF COMPARABLES AND ALLOW CONSEQUENT WORKING CAPITAL ADJUSTMENT ON THE ALP THUS COMPLETED. 9. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING. IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(A) BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 10. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEA RING OF THE APPEAL. IT(TP)A NO. 461/BANG/2013 & C.O. NO. 60/BANG/2016 PAGE 3 OF 8 3. THE GROUNDS RAISED BY THE ASSESSEE IN ITS CO ARE AS UNDER. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - IV, BANGALORE [CIT (APPEALS)], TO THE EXTENT PREJUD ICIAL TO THE RESPONDENT IS BAD IN LAW. 2. THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMIN G THE ACTION OF THE ASSESSING OFFICER ('AO') IN MAKING A REFERENCE TO T RANSFER PRICING OFFICER ('TPO') FOR DETERMINING THE ARM'S LENGTH PR ICE WITHOUT DEMONSTRATING AS TO HOW OR WHY IT WAS NECESSARY AND EXPEDIENT TO DO SO. 3. THE LOWER AUTHORITIES HAVE ERRED IN RELYING UPON REPLIES RECEIVED UNDER SECTION 133(6) DISREGARDING THE PRINCIPLES OF NATURAL JUSTICE. 4. THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMIN G THE ACTION OF THE TPO IN: A. REJECTING THE TRANSFER PRICING ANALYSIS UNDERTAK EN BY THE RESPONDENT ON UNJUSTIFIABLE GROUNDS AND CONDUCTING A FRESH TRANSFER PRICING ANALYSIS; B. REJECTING THE COMPARABLES SELECTED BY THE RESPON DENT ON UNJUSTIFIABLE GROUNDS; C. ADOPTING UNJUSTIFIABLE AND INAPPROPRIATE FILTERS LIKE ONE-SIDED TURNOVER FILTER, 25% RPT FILTER, ETC. IN THE PROCES S OF SELECTING CORNPARABLES; D. ADOPTING COMPANIES AS COMPARABLES EVEN THOUGH TH EY ARE NOT COMPARABLE IN RESPECT OF FUNCTIONS PERFORMED, RISKS ASSUMED, ASSET UTILISED, SIZE, TURNOVER ETC; E. NOT APPRECIATING THAT, APART FROM FAILING UPPER TURNOVER FILTER, FLEXTRONICS SOFTWARE SYSTEMS LTD IS FUNCTIONALLY DI FFERENT FROM THE APPELLANT, INFOSYS LTD IS A LARGE COMPANY HAVING HU GE BRAND VALUE AND INTANGIBLE AND FINANCIAL STATEMENTS OF SATYAM C OMPUTER SERVICES LTD ARE NOT RELIABLE. F. NOT APPRECIATING THAT, APART FROM HAVING ABNORMA L PROFITS, EXENSYS SOFTWARE IS FUNCTIONALLY DIFFERENT FROM THE APPELLA NT & HAS EXTRAORDINARY EVENT OF MERGER DURING THE YEAR UNDER CONSIDERATION AND THIRDWARE SOLUTIONS IS FUNCTIONALLY DIFFERENT F ROM THE APPELLANT. G. ADOPTING FOURSOFT LTD. AND GEOMETRIC SOFTWARE SO LUTIONS COMPANY LTD AS COMPARABLES EVEN THOUGH THEY ARE FUNCTIONALL Y DIFFERENT FROM THE APPELLANT AND FAIL 15%RPT FILTER. H. ADOPTING SANKHYA INFOTECH LTD AS A COMPARABLE EV EN THOUGH IT IS FUNCTIONALLY DIFFERENT FROM THE APPELLANT. IT(TP)A NO. 461/BANG/2013 & C.O. NO. 60/BANG/2016 PAGE 4 OF 8 I. NOT APPRECIATING THAT TATA EIXSI LTD IS FUNCTION ALLY DIFFERENT FROM THE APPELLANT. 5. THE LOWER AUTHORITIES HAVE ERRED IN: A. NOT MAKING PROPER ADJUSTMENT FOR ENTERPRISE LEVE L AND TRANSACTIONAL LEVEL DIFFERENCES BETWEEN THE RESPOND ENT AND THE COMPARABLE COMPANIES; B. NOT CONSIDERING THAT THE RESPONDENT IS INSULATED FROM CERTAIN RISKS, AS AGAINST COMPARABLES, WHICH ASSUME THESE RISKS AN D THEREFORE HAVE TO BE CREDITED WITH A RISK PREMIUM ON THIS ACCOUNT; AND C. NOT ALLOWING THE BENEFIT OF THE +/-5% RANGE MENT IONED IN THE PROVISO TO SECTION 92C (2). 4. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT GROU ND NOS. 1 AND 3 OF THE CO ARE GENERAL AND GROUND NO. 2 IS NOT PRESSED AND HENCE, GROUND NO. 2 OF THE CO IS REJECTED AS NOT PRESSED AND WE HOLD THAT FOR GROUND NOS. 1 AND 3, NO SEPARATE ADJUDICATION IS REQUIRED. 5. REGARDING GROUND NO. 4, IT WAS SUBMITTED THAT AS PER THIS GROUND, THE MAIN GRIEVANCE OF THE ASSESSEE IS REGARDING THIS ASPECT THAT IN RESPECT OF EXCLUSION OF VARIOUS COMPARABLES SUCH AS FLEXTRONICS SOFTWARE SYSTEMS LTD, INFOSYS LTD., EXENSYS SOFTWARE SOLUTIONS LTD., FOURSOFT LTD., GEO METRIC SOFTWARE SOLUTIONS COMPANY LTD., SANKHYA INFOTECH LTD. ETC., THE LD. C IT(A) HAD DECIDED ONLY ONE ASPECT I.E. HIGH TURNOVER AND HIGH PROFIT RATIO BUT THE ASSESSEES OBJECTION WAS REGARDING FUNCTIONAL DISSIMILARITY ALSO IN RESPECT OF SOME OF THE COMPARABLES AND RPT FILTER IN RESPECT OF SOME OF THE COMPARABLE S APART FROM THIS CONTENTION THAT FINANCIAL STATEMENTS OF SATYAM COMPUTER SERVIC ES LTD. IS NOT RELIABLE. HE SUBMITTED THAT THESE CONTENTIONS OF THE ASSESSEE WE RE NOT EXAMINED AND DECIDED BY LD. CIT(A). HE ALSO SUBMITTED THAT IN A PPEAL OF THE REVENUE, APART FROM THE ISSUE IN RESPECT OF CORPORATE TAXATION BEI NG COMPUTATION OF DEDUCTION ALLOWABLE U/S. 10A OF IT ACT, THE REVENUE IS AGGRIE VED FOR EXCLUSION OF SEVERAL COMPARABLES SUCH AS EXENSYS SOFTWARE SOLUTIONS LTD. , FLEXTRONICS LTD., IGATE GLOBAL SOLUTIONS LTD., L & T INFOTECH LTD., SATYAM COMPUTER SERVICES LTD., INFOSYS TECHNOLOGIES LTD. AND THIRDWARE SOLUTIONS L TD. ON THE BASIS OF HIGH TURNOVER / HIGH PROFIT RATIO OF THESE COMPARABLES. AT THIS JUNCTURE, IT WAS POINTED OUT BY THE BENCH THAT NOW THIS TRIBUNAL IS FOLLOWIN G THE JUDGMENT OF HONBLE IT(TP)A NO. 461/BANG/2013 & C.O. NO. 60/BANG/2016 PAGE 5 OF 8 DELHI HIGH COURT RENDERED IN THE CASE OF CHRYSCAPIT AL INVESTMENT ADVISORS (INDIA) (P.)LTD. VS. DCIT AS REPORTED IN 376 ITR 18 3 AND RESTORING THE MATTER BACK TO THE FILE OF AO/TPO FOR FRESH DECISION IN TH E LIGHT OF THIS JUDGMENT BECAUSE IT WAS HELD BY HONBLE DELHI HIGH COURT IN THIS CASE THAT HUGE PROFIT OR HUGE TURNOVER DOES NOT LEAD IPSO FACTO TO THE EXCLU SION OF A COMPARABLE AND THE TPO FIRST HAD TO SATISFY THAT SUCH DIFFERENCES DO NOT MATERIAL AFFECT THE PRICE OR COST AND SECONDLY, AN ATTEMPT SHOULD BE MADE TO MAKE REASONABLE ADJUSTMENT TO ELIMINATE THE MATERIAL EFFECT OF SUCH DIFFERENCES. IN REPLY, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT AS PER THE JUD GMENT OF HON'BLE BOMBAY HIGH COURT RENDERED IN THE CASE OF CIT VS. M/S. PEN TAIR WATER INDIA PVT. LTD. IN TAX APPEAL NO. 18 OF 2015 DATED 16.09.2015 WHICH IS AFTER THE JUDGMENT OF HON'BLE DELHI HIGH COURT DELIVERED ON 27.04.2015, I T WAS HELD THAT THE TURNOVER IS RELEVANT FACTOR TO CONSIDER THE COMPARABILITY. HE SUBMITTED THAT THIS LATER JUDGMENT OF HON'BLE BOMBAY HIGH COURT SHOULD BE FOL LOWED INSTEAD OF JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN TH E CASE OF CHRYSCAPITAL INVESTMENT ADVISORS (INDIA) (P.)LTD. VS. DCIT (SUPR A). THE LD. DR OF REVENUE SUBMITTED THE COPY OF TRIBUNAL ORDER RENDERED IN TH E CASE OF M/S. NTT DATA GLOBAL DELIVERY SERVICES LTD. VS. ACIT IN IT (TP) A NO. 1487/BANG/2013 DATED 06.04.2016 AND POINTED OUT THAT AS PER PARA NO. 10 OF THIS TRIBUNAL ORDER, IT WAS HELD BY THE TRIBUNAL IN THIS CASE FOR THE SAME ASSE SSMENT YEAR THAT EXENSYS SOFTWARE SOLUTIONS LTD. IS A GOOD COMPARABLE AND TH E SAME CANNOT BE EXCLUDED FROM THE LIST OF COMPARABLES. HE FURTHER SUBMITTED THAT AS PER PARA NO. 11 OF THIS TRIBUNAL ORDER, IT WAS HELD THAT FLE XTRONICS SOFTWARE SYSTEMS LTD. IS ALSO A GOOD COMPARABLE AND IT CANNOT BE EXCLUDED FROM THE LIST OF COMPARABLES. THEN HE POINTED OUT THAT AS PER PARA NO. 15 OF THIS TRIBUNAL ORDER, THE TRIBUNAL HELD THAT THIRDWARE SOLUTIONS L TD. IS NOT A GOOD COMPARABLE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL WE DEAL WITH THIS ASPECT AS TO WHETHER HIGH TURNOVER AND HIGH PROFIT RATIO O F A COMPARABLE COMPANY CAN BE A BASIS FOR EXCLUDING THAT COMPANY FROM THE LIST OF COMPARABLES. AS PER THE JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN TH E CASE OF CHRYSCAPITAL INVESTMENT ADVISORS (INDIA) (P.)LTD. VS. DCIT (SUPR A), MERELY ON THE BASIS OF HIGH PROFIT AND HIGH TURNOVER, THE COMPARABLE CANNO T BE EXCLUDED AND IN DOING IT(TP)A NO. 461/BANG/2013 & C.O. NO. 60/BANG/2016 PAGE 6 OF 8 SO, VARIOUS ASPECTS HAS TO BE LOOKED INTO AS TO WHE THER SUCH HIGH PROFIT OR HIGH TURNOVER IS AFFECTING THE PRICE OR COST MATERIALLY AND THIS IS ALSO REQUIRED TO BE SEEN AS TO WHETHER REASONABLE ADJUSTMENT CAN BE MAD E TO ELIMINATE THE MATERIAL EFFECT OF SUCH DIFFERENCES. THIS IS WORTH NOTING THAT IN TP STUDY, THE PURPOSE OF STUDY IS TO SEE THAT THE PRICES CHARGED BY THE ASSESSEE ARE AT ARMS LENGTH AND THEREFORE, THE SIZE OF THE TURNOVER OF T HE TESTED PARTY AND COMPARABLE COMPANY, THIS IS A VITAL FACTOR TO SEE T HAT SUCH DIFFERENCE IN TURNOVER OR PROFIT IS AFFECTING THE PRICE OR COST O R NOT AND WHETHER SUCH MATERIAL EFFECT OF DIFFERENCES CAN BE REMOVED BY MAKING SUIT ABLE ADJUSTMENTS. IF IT IS FOUND THAT SUCH HIGH TURNOVER OR HIGH PROFIT IS AFF ECTING THE PRICE OR COST AND SUITABLE ADJUSTMENT IS NOT POSSIBLE TO BE MADE TO R EMOVE SUCH DIFFERENCES THEN ONLY SUCH COMPARABLE SHOULD BE EXCLUDED ON ACCOUNT OF HIGH TURNOVER OR HIGH PROFIT. HENCE, IT IS SEEN THAT AS PER THIS JUDGMEN T, THIS IS NOT A RATIO THAT HIGH TURNOVER AND/OR HIGH PROFIT IS NOT RELEVANT. AS PER THIS JUDGMENT, EVEN IN CASE OF HIGH TURNOVER AND/OR HIGH PROFIT, SOME MORE ASPECTS SHOULD BE LOOKED INTO BEFORE DECIDING ABOUT THE NEED AND JUSTIFICATION OF EXCLUSION OF THAT COMPARABLE. NOW WE EXAMINE THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT CITED BY LD. AR OF ASSESSEE HAVING BEEN RENDERED IN THE CASE OF CIT VS. M/S. PENTAIR WATER INDIA PVT. LTD. (SUPRA). WE FIND THA T AS PER PARA NO. 5 OF THIS JUDGMENT OF HON'BLE BOMBAY HIGH COURT, IT WAS NOTED THAT THE TURNOVER OF ONE COMPARABLE I.E. HCL COMET SYSTEMS& SERVICES LTD. WA S ABOUT 23 TIMES OF THE TURNOVER OF THE ASSESSEE COMPANY AND THE TURNOVER O F THE SECOND COMPARABLE INFOSYS BPO LTD. WAS MORE THAN 65 TIMES OF THE ASSE SSEES TURNOVER AND SIMILARLY, THE TURNOVER OF THE THIRD COMPARABLE WIP RO LTD. WAS 939.78 CRORES AGAINST THE TURNOVER OF ASSESSEE COMPANY IN THAT CA SE OF RS. 11 CRORES ONLY. WE ALSO FIND THAT IN THAT CASE, THE TURNOVER WAS AB OVE 23 TIMES, 65 TIMES AND 85 TIMES OF THE TURNOVER OF THE ASSESSEE COMPANY AN D SIMPLY ON THE BASIS OF THESE FACTS, IT WAS HELD THAT THESE THREE COMPANIES ARE NOT GOOD COMPARABLE WITHOUT GOING INTO THIS ASPECT AS TO WHETHER SUCH H IGH TURNOVER IS AFFECTING THE PRICES OF THOSE COMPARABLE COMPANIES BECAUSE THIS W AS NOT AN ARGUMENT RAISED BEFORE HON'BLE BOMBAY HIGH COURT. ANY JUDGM ENT IS AN AUTHORITY IN RESPECT OF THAT ASPECT ONLY WHICH IS ACTIVELY EXAMI NED AND DECIDED BY THAT JUDGMENT. SINCE THIS ASPECT THAT HIGH TURNOVER IS AFFECTING THE PRICE OR NOT WAS IT(TP)A NO. 461/BANG/2013 & C.O. NO. 60/BANG/2016 PAGE 7 OF 8 NOT EXAMINED OR DECIDED BY HON'BLE BOMBAY HIGH COUR T BUT WAS DECIDED BY HON'BLE DELHI HIGH COURT AND WHICH IS VERY IMPORTAN T AND RELEVANT ASPECT, IN OUR CONSIDERED OPINION, WE FEEL IT PROPER TO FOLLOW THE JUDGMENT OF HON'BLE DELHI HIGH COURT IN PREFERENCE TO THE JUDGMENT OF HON'BLE BOMBAY HIGH COURT ON THIS ISSUE BECAUSE THE JUDGMENT OF HONBLE DELHI HIGH CO URT IS NOT IN CONFLICT OF THE JUDGMENT OF HONBLE BOMBAY HIGH COURT AND IT ONLY S AYS THAT SOME MORE ASPECTS SHOULD BE LOOKED INTO BEFORE DECIDING ABOUT THE NEED AND JUSTIFICATION OF EXCLUSION OF THAT COMPARABLE. 7. REGARDING THE RELIANCE PLACED BY LD. DR OF REVEN UE ON THE TRIBUNAL ORDER RENDERED IN THE CASE OF M/S. NTT DATA GLOBAL DELIVE RY SERVICES LTD. VS. ACIT (SUPRA), WE WANT TO OBSERVE THAT SINCE WE ARE SENDI NG BACK THE MATTER TO THE FILE OF AO/TPO FOR FRESH DECISION IN THE LIGHT OF T HIS JUDGMENT OF HON'BLE DELHI HIGH COURT RENDERED IN THE CASE OF CHRYSCAPITAL INV ESTMENT ADVISORS (INDIA) (P.) LTD. VS. DCIT (SUPRA), ALL THE ASPECTS CAN BE EXAMINED AND DECIDED BY THE AO/TPO AFRESH. MOREOVER AS PER THIS TRIBUNAL ORDER ALSO, ALL THE ASPECTS WERE NOT DECIDED BECAUSE THEY WERE NEVER ARGUED BEFORE T HE TRIBUNAL. IN PARA NO. 10 OF THIS TRIBUNAL ORDER, REGARDING EXENSYS SOFTWA RE SOLUTIONS LTD., THE ONLY ASPECT IN DISPUTE WAS WHETHER THERE WAS ABNORMAL PR OFITS ON ACCOUNT OF AMALGAMATION. IT WAS HELD BY THE TRIBUNAL IN THIS CASE THAT SINCE THE AMALGAMATED COMPANY WAS ALSO HAVING SIMILAR FUNCTIO NS, EVENT OF MERGER CANNOT BE A FACTOR FOR EXCLUSION OF THIS COMPANY FR OM THE LIST OF COMPARABLES. HENCE IT IS SEEN THAT NO OTHER ASPECT WAS EXAMINED BY TRIBUNAL IN THAT ORDER BECAUSE THE SAME WAS NEVER ARGUED BY TRIBUNAL IN TH AT CASE. IN THE PRESENT CASE, SEVERAL ASPECTS HAVE TO BE EXAMINED AND DECID ED I.E. HIGH TURNOVER, FUNCTIONAL SIMILARITY, HIGH PROFIT ETC. HENCE WE F EEL IT PROPER THAT THE MATTER SHOULD GO BACK TO THE FILE OF AO/TPO FOR A FRESH DE CISION ON ALL ASPECTS AFTER CONSIDERING THE JUDGMENT OF HON'BLE DELHI HIGH COUR T RENDERED IN THE CASE OF CHRYSCAPITAL INVESTMENT ADVISORS (INDIA) (P.)LTD. V S. DCIT (SUPRA). WE ORDER ACCORDINGLY. IT(TP)A NO. 461/BANG/2013 & C.O. NO. 60/BANG/2016 PAGE 8 OF 8 8. THE TP ISSUE REGARDING EXCLUSION OF VARIOUS COMP ARABLES IS RESTORED BACK TO THE FILE OF AO/TPO FOR FRESH DECISION IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO AS SESSEE. 9. THE ONLY OTHER ISSUE TO BE DECIDED IS REGARDING CORPORATE TAX ISSUE BEING COMPUTATION OF DEDUCTION ALLOWABLE U/S. 10A OF IT A CT. THIS ISSUE IS COVERED BY THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDER ED IN THE CASE OF CIT VS. TATA ELXSI LTD. AS REPORTED IN 349 ITR 98. IT WAS HELD IN THIS CASE THAT TOTAL TURNOVER IS SUM TOTAL OF EXPORT TURNOVER AND DOMEST IC TURNOVER AND THEREFORE, IF ANY AMOUNT IS REDUCED FROM EXPORT TURNOVER THAN TOT AL TURNOVER ALSO GETS REDUCED AUTOMATICALLY BY THE SAME AMOUNT. THE DIREC TION OF DRP ON THIS ISSUE IS IN LINE WITH THIS JUDGMENT AND THEREFORE, WE FIN D NO INFIRMITY IN THE SAME. THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE REVENUE AND TH E C. O. OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 17 TH NOVEMBER, 2017. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.