Market Tools Research P. Ltd, Hyderabad V. DCIT, cIRCLE-16(2), Hyderabad

ITA 1150/HYD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74551 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 7 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 15-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P SOMASEKHAR REDDYCIT
• Assessee Lawyers: KANCHAN KOUSAL
• Keywords: Depreciation; Transfer pricing; Opportunity of being heard; International transaction
• Section: 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1150/HYD/2011 : ASSESSMENT YEAR 2005-06 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. ( PAN - AADCM 9330 M ) V/S. DY. COMMISSIONER OF INCOME - TAX CIRCLE 16(2), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI KANCHAN KOUSAL & DHANESH BAFNA RESPONDENT BY : SH RI P. SOMASEKHAR REDDY(CIT - DR) DATE OF HEARING 1 7.1 2 .2013 DATE OF PRONOUNCEMENT 05 - 02 - 2014. O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THIS IS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 25-3- 2011 PASSED BY THE CIT (A)-III, HYDERABAD PERTAINING TO THE ASSESSMENT YEAR 2005-06. ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 2 2. BRIEFLY, THE FACTS ARE, THE ASSESSEE IS A COMPA NY REGISTERED UNDER THE INDIAN COMPANIES ACT, 1956. IT IS A WHOLLY OWN ED SUBSIDIARY OF MARKET TOOLS INC, USA (HEREINAFTER REFERRED TO AS ASSOCIAT ED ENTERPRISE, IN SHORT AE). THE ASSESSEE IS A CONTRACT SERVICE PROVIDER OF IT E NABLED BACK OFFICE SUPPORT SERVICES ONLY TO ITS AE. THE ASSESSEE IS A 100% EXP ORT ORIENTED UNIT(EOU) REGISTERED UNDER THE SOFTWARE TECHNOLOGY PARKS OF I NDIA (STPI) SCHEME. FOR THE PURPOSE OF PROVIDING SERVICES, THE ASSESSEE HAS ENTERED INTO A SERVICE AGREEMENT WITH ITS AE UNDER WHICH THE ASSESSEE WAS REMUNERATED AT COST PLUS MARK UP OF 13%. FOR THE ASSESSMENT YEAR UNDER DISPUTE THE ASSESSEE FILED ITS RETURN OF INCOME SHOWING LOSS OF RS.46,39 ,840/-. THE RETURN FILED BY THE ASSESSEE WAS INITIALLY PROCESSED UNDER S.143(1) OF THE ACT. SUBSEQUENTLY, DURING THE SCRUTINY ASSESSMENT PROCEEDING, THE ASSE SSING OFFICER NOTICING THAT THE ASSESSEE EARNED REVENUE FROM INTERNATIONAL TRAN SACTIONS ENTERED INTO WITH ITS AE, MADE A REFERENCE TO THE ADDITIONAL. CIT(TRA NSFER PRICING), HYDERABAD FOR DETERMINING THE ARMS LENGTH PRICE(ALP) OF THE INTERNATIONAL TRANSACTIONS. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE ENTE RED INTO FOLLOWING INTERNATIONAL TRANSACTIONS WITH ITS AE :- IT ENABLED BACK OFFICE SERVICES-RS.5,03,55,198.00 PURCHASE OF FIXED ASSETS- RS. 96,18,525. 00 REIMBURSEMENT OF EXPENSE- RS. 2,26,678.00 INTEREST FREE SHORT TERM CREDIT LOAN 3. THE TPO HAD NO DISPUTE TOWARDS PURCHASE OF FIXED ASSETS, REIMBURSEMENT OF EXPENSES AND INTEREST FREE SHORT T ERM CREDIT LOAN. HOWEVER, IN SO FAR AS PRICE CHARGED TOWARDS PROVISION OF ITE S IS CONCERNED THE TPO NOTICED FROM THE TP DOCUMENTATION SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE HAS CHOSEN MOST TRANSACTIONAL NET MARGIN M ETHOD (TNMM) AS THE MOST APPROPRIATE METHOD AND OP/TC AS THE PROFIT LEV EL INDICATOR(PLI). HE NOTICED THAT THE ASSESSEE IN THE TP STUDY HAS UNDER TAKEN SEARCH OF THE ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 3 DATABASES BY CONSIDERING FINANCIAL RESULTS OF THE C OMPANIES HAVING FINANCIAL YEARS ENDED DURING THE PERIOD 1.4.2002 TO 15.2.2005 AND IN THE PROCESS HAS SELECTED 22 COMPARABLES WITH AVERAGE MARGIN OF 12%. SINCE ASSESSEES MARGIN WAS 13%, THE PRICE CHARGED TO THE AE FOR PRO VIDING ITES WAS FOUND TO BE WITHIN ARMS LENGTH. THE TPO HOWEVER CALLED UP ON THE ASSESSEE TO FURNISH DATA RELATING TO THE FINANCIAL YEAR 2004-05 OF THE COMPARABLES. IN COMPLIANCE TO THE QUERY MADE BY THE TPO, THE ASSESS EE SUBMITTED A LIST OF 14 COMPARABLES WITH AVERAGE OP/TC OF 12%. 4. THE TPO HOWEVER, REJECTED THE TP STUDY OF THE ASSESSEE POINTING OUT VARIOUS DEFECTS AND DEFICIENCIES. BY APPLYING CERTA IN ADDITIONAL FILTERS THE TPO UNDERTOOK A FRESH SEARCH OF THE DATABASES WHICH YIE LDED 9 COMPANIES AS COMPARABLES HAVING AVERAGE MARGIN OF 23.75% AFTER W ORKING CAPITAL ADJUSTMENT. APPLYING THE AFORESAID AVERAGE MARGIN T O THE OPERATING COST HE DETERMINED THE ALP AT RS.6,03,20,332 AS AGAINST RS. 5,03,55,198 SHOWN BY THE ASSESSEE RESULTING IN A SHORTFALL OF RS.99,65,0 34/-, WHICH WAS TREATED AS ADJUSTMENT U/S92CA. 5. IN PURSUANCE TO THE ORDER PASSED BY THE TPO P ROPOSING THE AFORESAID TP ADJUSTMENT, THE ASSESSING OFFICER PASSED THE IMP UGNED ASSESSMENT ORDER MAKING ADDITION OF THE TRANSFER PRICING ADJUSTMENT OF RS.99,65,034/-AS RECOMMENDED BY THE TPO. THE ASSESSING OFFICER FURTH ER DISALLOWED AN AMOUNT OF RS.10,77,733/- U/S 40(A)(IA) OF THE ACT ON ACCOUNT OF NON DEDUCTION OF TAX U/S 194J OF THE ACT ON THE PAYMENT MADE TOWARDS CO MMUNICATION AND CIRCUIT CHARGES BY TREATING THE SAME TO BE IN THE NATURE O F FEES FOR TECHNICAL SERVICES. ACCORDINGLY, AS AGAINST LOSS OF RS.46,3 9,840/- DECLARED BY THE ASSESSEE, A PROFIT OF RS.70,06,099/- WAS DETERMINED BY THE ASSESSING OFFICER. BEING AGGRIEVED OF THE AFORESAID ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) RAISING VARIOUS GROUNDS. THE CIT(A) HOWEVER DISMISSED THE APPEAL OF THE ASSESSEE BY REJECTING A LL THE GROUNDS . BEING AGGRIEVED OF THE ORDER SO PASSED BY THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US RAISING SIX GROUNDS. ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 4 6. GROUND NO.1 BEING GENERAL IN NATURE, IS NOT REQU IRED TO BE ADJUDICATED UPON. 7. IN GROUND NO.2 AND 3, ASSESSEE HAS CHALLENGED TH E DISALLOWANCE OF COMMUNICATION AND CIRCUIT CHARGES OF RS.10,77,733/- U/S 40(A)(IA) OF THE ACT. AS CAN BE SEEN FROM THE IMPUGNED ASSESSMENT ORDER, IN COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER REQUIRED THE ASS ESSEE TO EXPLAIN WHY THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE ON COMMUNIC ATION AND CIRCUIT CHARGES AS THEY ARE IN THE NATURE OF FEES FOR TECHN ICAL SERVICES. THE ASSESSEE SUBMITTED THAT THE PAYMENT CANNOT BE TERMED AS FEES FOR TECHNICAL SERVICES AS THEY ARE IN THE NATURE OF ROYALTY AND AS SUCH THE P ROVISIONS CONTAINED U/S 194J IS NOT APPLICABLE. THE ASSESSING OFFICER HOW EVER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND BY RELYING UPON A DE CISION IN CASE OF HUTCHISON TELECOM EAST LTD. V/S. CIT (16 SOT 404) HELD THAT THE PAYMENT TOWARDS COMMUNICATION AND CIRCUIT CHARGES ARE AKIN TO FEE F OR TECHNICAL SERVICES, HENCE LIABLE FOR TDS U/S 194J. SINCE ASSESSEE HAS N OT DEDUCTED TAX AT SOURCE ON SUCH PAYMENT, HE DISALLOWED THE EXPENDITURE CLAI MED U/S 40(A)(IA) OF THE ACT AND ADDED IT TO THE INCOME OF THE ASSESSEE. TH E CIT(A) ALSO CONFIRMED THE ADDITION BY HOLDING THAT IN VIEW OF THE DECISI ON OF HONBLE SUPREME COURT IN CASE OF CIT V/S. BHARATI CELLULAR LTD. (330 IT R 239) WHEREIN THE SUPREME COURT REMANDED THE MATTER TO THE ASSESSING OFFICER FOR ASCERTAINING THE FULL FACTS FROM THE TECHNICAL EXPERTS, THE DISALLOWANCE HAS TO BE MAINTAINED. 8. WE HAVE HEARD THE PARTIES AND PERUSED THE MATERI ALS ON RECORD AS WELL AS THE ORDERS OF THE REVENUE AUTHORITIES. IT IS TH E CONTENTION OF THE LEARNED AR THAT THE PAYMENT CANNOT, UNDER ANY CIRCUMSTANCES , BE TREATED AS PAYMENT TOWARDS FEES FOR TECHNICAL SERVICES AS THERE IS NO ELEMENT OF PROVIDING ANY TECHNICAL SERVICES IS INVOLVED. IT WAS SUBMITTED T HAT THE PAYMENT WAS MADE TO THE INTERNET SERVICE PROVIDER WHO ONLY PROVIDES THE LINE AND NOT ANY PROFESSIONAL OR TECHNICAL SERVICES. IT WAS SUBMITT ED THAT THE SERVICES PROVIDED DO NOT REQUIRE ANY HUMAN INTERVENTION SO AS TO BR ING IT WITHIN THE SCOPE AND AMBIT OF TECHNICAL SERVICES. IT IS SEEN THAT IN CASE OF ACIT V/S. HUGHES ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 5 SOFTWARE SYSTEMS LTD., THE ITAT, DELHI BENCHES IN I TA NOS. 3966 AND 3967/DEL/2011 DATED 22-3-2013 AFTER TAKING INTO CO NSIDERATION THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT V/S. BH ARATI CELLULAR AND DECISIONS OF HONBLE DELHI AND MADRAS HIGH COURT HE LD THAT WHERE PAYMENTS ARE MADE TO THE SERVICE PROVIDER FOR PROVIDING SPA CE FOR TRANSMISSION OF DATA FOR CARRIAGE OF VOICE AND FOR AVAILING SERVICE OF INTERCOMMUNICATION, PORT ACCESS WHICH DO NOT REQUIRE ANY HUMAN INTERVENTION IT CANNOT COME WITHIN THE CATEGORY OF FEES FOR TECHNICAL SERVICES. THE ITAT , HYDERABAD BENCH IN THE CASE OF ACIT V/S. USHODAYA ENTERPRISES P. LTD. (53 SOT 193) ALSO EXPRESSED SIMILAR VIEW BY HOLDING AS UNDER:- 14. FURTHER, THE AUTHORITY FOR ADVANCING RULING HA S HELD IN THE CASE OF INTERTEK TESTING SERVICES INDIA P LTD. (307 ITR 418)( AAR) THAT THE OFFER OF A STANDARD FACILITY TO A NUMBER OF CUSTOMERS SUCH AS TELEPHONE/CELL PHONE USERS DOE S NOT AMOUNT TO RENDERING ANY TECHNICAL SERVICE WITHIN THE MEANING OF THE DEFIN ITION OF TECHNICAL SERVICE. TECHNICAL OR CONSULTANCY SERVICE RENDERED SHOULD BE OF SUCH A NA TURE THAT IT MAKES AVAILABLE THE TECHNICAL KNOWLEDGE, SKILLS ETC. MUST REMAIN WITH T HE PERSON RECEIVING THE SERVICES EVEN AFTER THE PARTICULAR CONTRACT COMES TO AN END. IT I S ENOUGH THAT THE SERVICES OFFERED ARE THE PRODUCT OF INTENSE TECHNOLOGICAL EFFORT AND A L OT OF TECHNICAL KNOWLEDGE AND EXPERIENCE OF THE SERVICE PROVIDER HAVE GONE INTO I T. THE TECHNICAL KNOWLEDGE OR SKILLS OF THE PROVIDER SHOULD BE IMPARTED TO AND ABSORBED BY THE RECEIVER SO THAT THE RECEIVER CAN DEPLOY SIMILAR TECHNOLOGY OR TECHNIQUES IN THE FUTURE WITHOUT DEPENDING UPON THE PROVIDER. HENCE, WE CONFIRM THE ORDER OF THE CIT(A) THAT TAX IS NOT DEDUCTIBLE ON PAYMENT DATA CIRCUIT RENTALS AND DISMISS THE DEPART MENTAL APPEAL ON THIS ISSUE. 15. THE NEXT ISSUE RAISED BY THE DEPARTMENT IS PAYM ENT OF BAND WIDTH CHARGES: THE ASSESSING OFFICER HELD THAT PAYMENTS MADE TO VA RIOUS COMPANIES TOWARDS BANDWIDTH CHARGES ARE LIABLE FOR TDS U/S 194J. HE B RUSHED ASIDE THE ASSESSEES PLEA THAT THE PAYMENTS WERE MADE OR PROVIDING FACILITIES AND NOT ANY SERVICES. IN APPEAL, THE CIT(A) ACCEPTED THE CONTENTION OF THE ASSESSEE AND HELD THAT THE PAYMENTS ARE IN THE NATURE OF RENT PAID FOR SPACE ITA NOS.1699 TO 1701/ H/2008 ITA NOS.1706 TO 1708/H/2008 M/S USHODAYA ENTERPRISES PVT. LTD., HYD ERABAD ALLOTTED IN THE TRANSPONDER AND THE SAME WILL NOT COME UNDER THE PU RVIEW OF SECTION 194J. THE CIT(A) FOLLOWED THE DECISION OF THE HONBLE MADRAS HIGH CO URT IN THE CASE OF SKYCELL COMMUNICATIONS LTD. VS. DCIT 251 ITR 53 MAD. THE CI T(A) ALSO RELIED ON THE DECISION OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF SOFTWARE TECHNOLOGY PARKS OF INDIA ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 6 VS. ITO 3 SOT BANG. THE CIT (A) HELD THAT SECTION 1 94J WILL NOT BE APPLICABLE TO THE IMPUGNED PAYMENTS. 16. AGGRIEVED, THE DEPARTMENT IS IN APPEAL BEFORE U S. 17. THE LEARNED COUNSEL FOR THE ASSESSEE SHIVA KUM AR RELIED ON THE DECISION OF THE TRIBUNAL MUMBAI BENCH IN THE CASE OF PACIFIC INTERN ET (INDIA) P LTD. VS. ITO 318 ITR (AT) 0197 MUM WHEREIN IT HAS BEEN HELD THAT PAYMENT MADE FOR USING BANDWIDTH AND NETWORK OPERATION ARE NOT TECHNICAL SERVICES AND TA X NEEDED NOT BE DEDUCTED FROM SUCH PAYMENTS U/S 194J. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS NOW SETTLED THAT MERE PROVISION OF FACILITY TO USE EQUI PMENT, WHATEVER MAY BE THE SOPHISTICATION THAT WENT INTO THE CREATION OF SUCH FACILITY, IS NOT TECHNICAL SERVICE. FOLLOWING DECISION OF THE COORDINATE BENCH IN PACIF IC INTERNET (INDIA) P LTD. VS. ITO 318 ITR (AT) 0197 MUM. WE UPHOLD THE ORDER OF THE CIT(A ) THAT PAYMENTS OF BANDWIDTH ARE NOT LIABLE FOR TDS UNDER SECTION 194J AND DISMISS T HE DEPARTMENTAL APPEAL ON THIS ISSUE. 9. IT IS VERY MUCH CLEAR FROM THE ASSESSMENT ORDER THAT THE AO ACCEPTS THE FACT THAT PAYMENTS WERE MADE TO THE SERVICE PRO VIDER FOR UTILIZING THE DATA CIRCUIT LINES FOR COMMUNICATING DATA TO VARIOUS PLA CES. NOTHING HAS BEEN BROUGHT ON RECORD BY THE DEPARTMENT TO SHOW THAT SE RVICE PROVIDED REQUIRED HUMAN INTERVENTION OR ANY TECHNICAL SERVICE WAS MAD E AVAILABLE WHICH THE ASSESSEE COULD DEPLOY IN FUTURE WITHOUT HAVING TO D EPEND UPON THE SERVICE PROVIDER. THEREFORE, RESPECTFULLY FOLLOWING THE AFO RESAID DECISIONS OF CO- ORDINATE BENCHES, WE HOLD THAT EXPENDITURE INCURRED TOWARDS COMMUNICATION AND CIRCUIT CHARGES CANNOT BE TREATED AS FEES FOR T ECHNICAL SERVICES REQUIRING DEDUCTION OF TAX AT SOURCE U/S 194J OF THE ACT. W E THEREFORE DIRECT THE ASSESSING OFFICER TO ALLOW THE EXPENDITURE CLAIMED. THESE GROUNDS ARE TREATED AS ALLOWED. 10. IN VIEW OF OUR FINDING IN GROUND NOS. 2 AND 3 A BOVE, GROUND NO.4 HAS BECOME REDUNDANT AND ACCORDINGLY DISMISSED. 11. GROUND NO.5 WITH ITS SUB GROUNDS AND GROUND NO. 6 RELATE TO TRANSFER PRICING ISSUES. SO FAR AS GROUND NO.5 IS CONCERNED THE LD. AR CONFINED HIS ARGUMENT TO SUB-GROUNDS (II) AND (III). THEREFORE, SUB-GROUND NOS. (I),(IV), (V) AND (VI) OF GROUND NO.5 ARE DISMISSED AS NOT P RESSERD. SUB-GROUND (II) ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 7 RELATES TO SELECTION OF CERTAIN COMPARABLES BY THE TPO WHICH WERE ALSO RETAINED BY THE CIT(A) . BEFORE US, THE ASSESSEE H AS SPECIFICALLY OBJECTED TO FOUR COMPARABLES SELECTED BY TPO. HEREINAFTER, WE W ILL DEAL WITH EACH OF THE COMPARABLES OBJECTED BY THE ASSESSEE. 12. VISHAL INFORMATION TECHNOLOGIES LTD. : OBJECTING TO THE AFORESAID COMPANY HAVING BEEN SELECTED AS COMPARABLE BY THE TPO, THE LEARNE D AR SUBMITTED THAT APART FROM THE FACT THAT THE SAID COMPANY IS FUNCTI ONALLY DIFFERENT AS IT IS IN THE BUSINESS OF PROVIDING DESIGNING AND PRINTING SOLUTIONS, THE PRIMARY REASON WHY THIS COMPANY SHOULD NOT BE SELECTED AS COMPARABLE IS IT HAS OUTSOURCED A CONSIDERABLE PART OF ITS BUSINESS TO THIRD PARTY VENDOR S WHICH IS EVIDENT FROM HUGE VENDOR PAYMENT MADE BY THE COMPANY. THIS IS PROVED FROM THE FACT THAT ITS WAGE TO TOTAL COST IS ONLY 1% AS AGAINST 30'40% R ANGE OF THE INDUSTRY.. IN SUPPORT OF SUCH CONTENTION, THE LEANED AR RELIED ON THE DE CISIONS OF HYDERABAD ITAT IN CASE OF CAPITAL IQ INFORMATION SYSTEMS INDIA PVT. LTD. (ITA NO. 1961/HYD/2011) . 13. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUBMITTED THAT THE TPO HAVING CONSIDERED ALL ASPECTS OF THE MATTER AND SELECTED THE AFORESAID COMPANY AS A COMPARABLE, IT SHOULD NOT BE EX CLUDED FROM THE COMPARABILITY ANALYSIS. 14. WE HAVE HEARD THE CONTENTIONS OF THE PARTIES AND PERU SED THE MATERIALS ON RECORD. ON A PERUSAL OF THE ORDER PASSED BY THE CO'ORDINATE BENCH IN THE CASE OF CAPITAL IQ INFORMATION SYSTEMS PVT. LTD. (SU PRA), IT IS TO BE NOTED THAT THE AFORESAID COMPANY HAS BEEN EXCLUDED AS A COMPARABLE B Y HOLDING AS UNDER: 17. AFTER CONSIDERING THE SUBMISSIONS OF THE LEARN ED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE, WE FIND THAT THE DRP, IN THE PROC EEDINGS FOR THE ASSESSMENT YEAR 2008-09 IN ASSESSEES OWN CASE, AFTER TAKING NOTE O F THE COMPOSITION OF THE VENDOR ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 8 PAYMENTS OF CORAL HUB FOR THE LAST THREE YEARS, AND THE FACT THAT IT HAS ALSO COMMENCED A NEW LINE OF BUSINESS OF PRINTING ON DEM AND(POD), WHEREIN IT PRINTS UPON CLIENTS REQUEST, CONCLUDED AS FOLLOWS- 18.4. IN VIEW OF THIS MAJOR DIFFERENCE IN FUNCTI ONALITY AND THE BUSINESS MODEL, THIS PANEL IS OF THE VIEW THAT CORAL HUB IS NOT A SUITABLE COMPARABLE TO THE TAXPAYER AND HENCE NEEDS TO BE DROPPED FORM THE FIN AL LIST OF COMPARABLES. IN CASE OF ACIT V/S. M/S. MAERSK GLOBAL SERVICE CEN TRE (SUPRA), THE ITAT MUMBAI BENCH HAS ALSO DIRECTED FOR EXCLUSION OF THE AFORES AID COMPANY, BY OBSERVING IN THE FOLLOWING MANNER- INSOFAR AS THE CASES OF TULSYAN TECHNOLOGIES LIMIT ED AND VISHAL INFORMATION TECHNOLOGIES LIMITED ARE CONCERNED, IT IS NOTICED F ROM THEIR ANNUAL ACCOUNTS THAT THESE COMPANIES OUTSOURCED A CONSIDERABLE PORTION O F THEIR BUSINESS. AS THE ASSESSEE CARRIED OUT ENTIRE OPERATIONS BY ITSELF, I N OUR CONSIDERED OPINION, THESE TWO CASES WERE RIGHTLY EXCLUDED. IN VIEW OF THE OBSERVATIONS MADE BY THE DRP AS WELL AS THE DECISION OF THE ITAT MUMBAI IN THE CASE OF MAERSK GLOBAL SERVICE CENTRE, (SUPRA), WE ACCEPT THAT THIS COMPANY CANNOT BE TAKEN AS A COMPARABLE. 17. AS COULD BE SEEN FROM THE FINDINGS OF THE CO-O RDINATE BENCH, THE AFORESAID COMPANY UNLIKE THE ASSESSEE HAS OUTSOURCED CONSIDER ABLE PORTION OF ITS BUSINESS TO THIRD PARTY VENDOR. HENCE, IT CANNOT BE CONSIDERED AS A COMPARABLE. THAT BESIDES THE DRP IN ASSESSEES OWN CASE FOR ASST. YEAR 2008- 09 HAS HELD THAT THIS COMPANY CANNOT BE TREATED AS A COMPARABLE. THEREFORE, CON SIDERING THE AFORESAID FACT, WE ARE OF THE VIEW THAT M/S VISHAL INFORMATION TECHNOL OGY LTD., CANNOT BE TAKEN AS A COMPARABLE AND DIRECT FOR EXCLUDING THE SAME FROM T HE LIST OF COMPARABLES.' ON PERUSAL OF THE DISCUSSIONS MADE BY TPO IN RESPECT OF AFORESAID COMPANY, WHICH IS AT PAGE 485 OF THE PAPER BOOK, IT IS SEEN THAT THE ASSESSEE HAD CONTENDED BEFORE THE TPO THAT THE EMPLOYEE COST OF THE COMPANY AS A PERCENTAGE OF TOTAL COST IS ONLY 1%. THIS FACT HAS NOT B EEN CONTROVERTED BY THE TPO. SUCH LOW EMPLOYEE COST PRESUPPOSES THAT THE COMPA NY IS OUTSOURCING A MAJOR PORTION OF ITS WORK TO OTHERS. THEREFORE, FOL LOWING OUR DECISION IN CASE OF CAPITAL IQ INFORMATION SYSTEMS PVT. LTD.(SUPRA), WE DIRECT AO/TPO TO EXCLUDE THE AFORESAID COMPANY AS A COMPARABLE. ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 9 15. MAPLE E SOLUTIONS LTD. : THE LEARNED AR OBJECTED TO THE AFORESAID COMPANY BEING TREATED AS COMPARABLE AS IT PROVIDES DE SIGN SERVICE ON LINE AND OUTLINE MEDIA RANGING FROM INTERFACE TO LOGO DESIGN. THE SERVICE INCLUDE WEBSITE EVALUATION, INTRANET/EXTRANET, EMAIL LIST MANAGEMENT CONTE NT MANAGEMENT, SECURITY ETC. HENCE, THE COMPANY IS FUNCTIONALLY DISS IMILAR TO THE ASSESSEE. HE FURTHER SUBMITTED THAT THE SAID COMPANY CANNOT ALSO BE TR EATED AS COMPARABLE AS THE DIRECTORS OF THE SAID COMPANY WERE FOUND TO BE INVOLVED IN FRAUD, HENCE FINANCIAL RESULTS OF THE COMPANY CANNOT BE TRUSTED AS REL IABLE. HE SUBMITTED THAT EXTRAORDINARY HIGH PROFIT SHOWN BY THE COMPANY MAY BE D UE TO THESE REASONS. THE LD.AR SUBMITTED THAT ITAT ,HYDERABAD BENCH IN ITS OWN CASE IN ITA NO.2066/H/2011 DT.31.01.2013 FOR THE ASST. YEAR2007'0 8 HAS HELD THIS COMPANY AS NOT COMPARABLE. HE CONTENDED THAT EVEN THE DISPUTE RESOL UTION PANEL(DRP) HAS EXCLUDED THIS COMPANY IN THE ASST. YEAR 2008'09. HE ALS O RELIED UPON ANOTHER DECISION OF THE HYDERABAD ITAT IN CASE OF HSBC ELECTR ONIC DATA PROCESSING INDIA LTD VS ACIT IN ITA NO.1624/HYD/2010 DT.28.06.2013.THE LD.DR HOWEVER SUPPORTED THE ORDERS OF THE CIT(A) AND TPO. 16. HAVING HEARD THE SUBMISSIONS OF THE PARTIES AND CONSI DERING THE MATERIAL ON RECORD, WE FIND THAT VARIOUS BENCHES OF THE ITAT INCLU DING HYDERABAD BENCHES HAVE HELD THAT THE AFORESAID COMPANY CANNOT BE TREA TED AS COMPARABLE AS ITS FINANCIAL RESULTS ARE NOT RELIABLE. AS CAN BE SEEN FROM THE MATERIALS PLACED ON RECORD, EVEN IN ASSESSEES OWN CA SE THE ITAT, HYDERABAD BENCH AND DRP RESPECTIVELY FOR THE ASSESSMENT YEARS 20 07'08 AND 2008'09 HAVE DIRECTED NOT TO TREAT THIS COMPANY AS A COMPARABLE. IN SUCH VIEW OF THE MATTER, WE DIRECT THE AO/TPO NOT TO CONSIDER THIS COMPANY AS A COMPARABLE. 17. NUCLEUS NETSOFT AND GIS INDIA LTD. : THE LEARNED AR OBJECTED TO THE AFORESAID COMPANY BEING TREATED AS COMPARABLE ON THE GR OUND THAT IT FAILS ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 10 EMPLOYEE COST FILTER. THE LEARNED AR SUBMITTED THAT A S PER THE ANNUAL REPORT OF THAT COMPANY FOR THE IMPUGNED YEAR, ON AN OPERATING REVENUE OF RS. 1,22,55,116 IT HAS AN EMPLOYEE COST OF RS. 24,02,259 WHICH WORKS OUT TO ONLY 19.60%. HE, THEREFORE, CONTENDED THAT SUCH LOW EMPLOY EE COST PROVES THAT THE COMPANY OUTSOURCES ITS WORK AND DOES NOT PROVIDE SERV ICES BY ITSELF. HE, FURTHER SUBMITTED THAT BUSINESS MODEL OF THE COMPANY HAS ALSO C HANGED DUE TO MERGER. THE COMPANY HAS DISCONTINUED MONEY CHANGING BUSINE SS AND HAS COMMENCED PORTFOLIO MANAGEMENT SERVICES. IN THIS CONT EXT, THE LEARNED AR RELIED UPON A DECISION OF THE ITAT, HYDERABAD BENCHES I N CASE OF HSBC ELECTRONIC DATA PROCESSING INDIA PVT. LTD., IN ITA NO. 1624/HYD/2010 DATED 28.6.2013. 18. WE HAVE HEARD THE PARTIES. THE SOLE CONTENTION OF THE ASSESSEE FOR EXCLUDING THE AFORESAID COMPANY IS THE EMPLOYEE COST AS A PERCENTAGE OF THE OPERATING REVENUE IS MUCH LOWER COMPARED TO THE ASSES SEE. ON A PERUSAL OF THE ORDER PASSED BY THE CO'ORDINATE BENCH IN THE CASE OF HSBC ELECTRONIC DATA PROCESSING INDIA PVT. LTD. (SUPRA), IT IS TO BE NOTED THAT THE CO'ORDINATE BENCH WHILE CONSIDERING THE OBJECTION OF THE ASSESSEE WITH REGAR D TO THE AFORESAID COMPANY IN PARA 13 AND 13.1 ACCEPTED ASSESSEE'S CONTENTI ON THAT THE COMPANY OUTSOURCED ITS WORK AND HAS HELD THAT THE COMPANY CANNOT BE SELECTED AS A COMPARABLE ON ACCOUNT OF ITS LOW EMPLOY EE COST. IN VIEW OF SUCH ORDER OF THE CO'ORDINATE BENCH, WE DIRECT THE AO/TPO T O EXAMINE THIS ASPECT AND IF THERE IS SUBSTANTIAL DIFFERENCE BETWEEN THE ASSES SEE AND THE AFORESAID COMPANY WITH REGARD TO EMPLOYEE COST, THEN THIS COMPANY CANNOT BE TREATED AS A COMPARABLE. 19. WIPRO BPO SOLUTIONS LTD . : WE HAVE HEARD THE CONTENTIONS OF THE PARTIES AND PERUSED THE MATERIALS ON RECORD IN THE CONTEXT OF ASSESSEE'S OBJECTION WITH REGARD TO AFORESAID COMPANY . THE GROUND ON WHICH ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 11 THE ASSESSEE HAS SOUGHT EXCLUSION OF THE AFORESAID COM PANY IS IT OPERATES UNDER CONTROLLED CONDITIONS, INCOMPARABLE SCALE OF OPERATIONS , DIVERSIFIED ACTIVITIES. LD. AR SUBMITTED THAT WIPRO BRAND COMMANDS A PREMIUM IN T HE PRICING OF ITS PRODUCTS AND SERVICES DUE TO GOODWILL, REPUTATION AND BRAND VALUE. THEREFORE, IT CANNOT BE COMPARED TO A RISK MITIGATED CAPTIVE SERVIC E PROVIDER LIKE THE ASSESSEE. HE FURTHER SUBMITTED THAT WIPRO BPO CANNOT B E A COMPARABLE CONSIDERING ITS TURNOVER ALSO. IN SUPPORT OF SUCH CO NTENTION THE LEARNED AR RELIED UPON THE FOLLOWING DECISIONS: CAPITAL IQ INFORMATION SYSTEMS INDIA PVT. LTD. (ITA NO. 1961/HYD/2011). MARKET TOOLS RESEARCH PVT. LTD. VS. ACIT (ITA NO. 2 066/HYD/2011). 20. IT IS A FACT THAT WIPRO BPO IS A BIG COM PANY OWNING INTANGIBLES AND HAVING SUBSTANTIAL BRAND VALUE. IT HAD GENERATED CONSID ERABLE GOODWILL, REPUTATION AND BRAND VALUE IN THE MARKET. IT IS ALSO A FACT THAT IT EARNS SUBSTANTIAL REVENUE FROM PRODUCTS WHICH ARE SOLD AT A PREMIUM UNLIKE THE ASSESSEE WHICH IS ONLY A CONTRACT SERVICE PROVIDER TO ITS AE. ANOTHER RELEVANT FACTOR WHICH CANNOT BE LOST SIGHT OF IS, AS CAN BE SEEN FROM PARA'14.5 OF HIS ORDER, THE TPO APPLYING THE TURNOVER FILTER HAS EXCLUDED COMPANIES HAVING TURNOVER FROM ITES AT LESS THAN 1 CRORE. APPLYING THE S AME LOGIC HE SHOULD ALSO HAVE EXCLUDED COMPANIES HAVING EXTRAORDINARILY HIGH TURNO VER. WHILE THE ASSESSEES TURNOVER IS ABOUT 5 CRORES, TURNOVER OF WI PRO BPO IS 617.71 CRORES I.E ALMOST 120 TIMES MORE. CONSIDERING THE AFORESAID FACT S WE ARE OF THE VIEW THAT WIPRO BPO CANNOT BE CONSIDERED TO BE A COMPARABLE TO T HE ASSESSEE. 21. GROUND NO. 5(III) READS AS UNDER:- III) ERRED IN NOT GRANTING AN ADJUSTMENT FOR THE DI FFERENCE IN RATE OF DEPRECIATION CHARGED AND THERE LEVEL OF INFRASTRUCT URAL COSTS INCURRED BY THE APPELLANT AND THE COMPARABLE COMPANIES., ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 12 22. THE LEARNED AR SUBMITTED BEFORE US THAT WHILE C OMPUTING THE MARGIN OF THE COMPARABLE COMPANIES, THE TPO SHOULD HAVE CONSI DERED ALL FACTS WHICH HAVE AN IMPACT IN THE FINANCIAL RESULT OF THE COMPA RABLE COMPANIES FOR MAKING AN ACCURATE ADJUSTMENT. IN THIS CONTEXT, HE SUBMIT TED THAT DIFFERENT RATE OF DEPRECIATION IS A RELEVANT FACTOR WHICH SHOULD BE T AKEN NOTE OF WHILE CONSIDERING THE MARGIN OF COMPARABLES AND SUITABLE ADJUSTMENT IS REQUIRED TO BE MADE FOR THE DIFFERENCE. IN SUPPORT OF SUCH CO NTENTION, THE LEARNED AR RELIED UPON THE DECISION OF CO-ORDINATE BENCH IN IT S OWN CASE FOR ASSESSMENT YEAR 2007-08 IN ITA NO.2066/HYD/11 DATED 31-01-13. 23. HAVING HEARD THE PARTIES, WE FIND THAT I N ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08, THE CO-ORDINATE BENCH IN I TS ORDER DATED 31-1-2013 (SUPRA ) HELD AS UNDER:- ALL FACTS WHICH IMPACT THE FINANCIAL RESULT OF COMP ARABLE COMPANIES SHOULD BE TAKEN INTO ACCOUNT AND REASONABLE ACCURAT E ADJUSTMENT SHOULD BE MADE FOR THE SAME. IN THIS CONNECTION, T HE RATES OF DEPRECIATION ADOPTED BY THE ASSESSEE ARE SIGNIFICAN TLY DIFFERENT FROM (STRAIGHT LINE AS COMPARED WITH WTP; HIGHER RATE TH AN THAT PRESCRIBED IN SCHEDULE VI) THOSE ADOPTED BY THE COMPARABLE COM PANIES SUITABLE ADJUSTMENT FOR THE DIFFERENT HAS TO BE MADE OR THE PROFIT BEFORE DEPRECIATION MAY BE CONSIDERED. 24. RESPECTFULLY FOLLOWING THE AFORESAID DE CISION OF COORDINATE BENCH IN ASSESSEES OWN CASE WE DIRECT THE AO/TPO TO EXAMINE THIS ASPECT BY EITHER MAKING SUITABLE ADJUSTMENT FOR THE DIFFERENCE IN DE PRECIATION OR MAY CONSIDER PROFIT BEFORE DEPRECIATION WHILE COMPUTING THE MARG IN. THIS ISSUE IS REMITTED TO THE FILE OF THE ASSESSING OFFICER /TPO FOR FRESH CONSIDERATION AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 25. GROUND NO. 6 READS AS UNDER: ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 13 THE LEARNED CIT(A) ERRED IN CONSIDERING THE PRE-OPE RATIVE EXPENSES OF RS.44.00,457/- AS A COMPONENT OF THE OPERATING COST S FOR THE DETERMINATION OF ARMS LENGTH REMUNERATION. 26. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE TPO SHOULD NOT HAVE CONSIDERED PRE-OPERATIVE EXPENSES OF RS.44,00,457 A S OPERATING COST WHILE COMPUTING THE ALP OF THE INTERNATIONAL TRANSACTION. AS CAN BE SEEN FROM THE FACTS ON RECORD IN THE ORDER PASSED U/S 92CA OF THE ACT, THE TPO HAD ADOPTED THE OPERATING COST AT RS.4,87,43,702/-. SUBSEQUENT LY, HOWEVER HE PASSED AN ORDER U/S 154 OF THE ACT BY ADOPTING THE OPERATING COST AT RS.4,89,62,580/- WHICH INCLUDED THE PRE-OPERATIVE EXPENSES OF RS.44, 00,457/-. THOUGH THE ASSESSEE TOOK UP THE ISSUE BEFORE THE CIT(A), HE HO WEVER DID NOT INTERFERE BY REJECTING ALL THE CONTENTIONS OF THE ASSESSEE. HE H ELD THAT AS PER CLAUSE 2.4 OF ARTICLE 2 OF THE AGREEMENT BETWEEN THE ASSESSEE WIT H ITS AE IT BECOMES CLEAR THAT THE ASSESSEE HAS CHARGED ITS AE FOR ALL SUCH COST INCURRED BY IT PRIOR TO ENTERING INTO SUCH AGREEMENT WITH THE AE. HE HELD T HAT IN ABSENCE OF ANY SPECIFIC DENIAL FROM THE ASSESSEE REGARDING NOT CHA RGING AE FOR SUCH COSTS INCURRED UP TO 31-3-2004 , IT HAS TO BE HELD THAT THE ASSESSEE HAS CHARGED AND RECOVERED SUCH COSTS INCURRED BY IT DURING THA T PERIOD. 27. THE LEARNED AR BY REFERRING TO THE AGREEMEN T ENTERED WITH THE AE, WHICH IS AT PAGE 1 OF THE PAPER BOOK, SUBMITTED THA T THE ASSESSEE WAS INCORPORATED ON 4-6-2004. THE AGREEMENT WAS ENTERED WITH ITS AE ON 1 ST SEPT. 2004. THEREFORE, THERE IS NO QUESTION OF ASSESSEE HAVING CHARGED PRE- OPERATIVE EXPENSES FROM ITS AE PRIOR TO THE DATE OF THE AGREEMENT. THE LEARNED AR IN THIS CONTEXT REFERRED TO THE FINANCIA L INFORMATION AS ON 31-3- 2005 PLACED IN THE PAPER BOOK WHEREIN PRE-OPERATIVE EXPENSES HAS BEEN EXCLUDED WHILE ARRIVING AT THE TOTAL COST. THE L EARNED AR SUBMITTED, EVEN AS PER CLAUSE 2.4 OF ARTICLE 2 OF THE AGREEMENT, THE C OST INCLUDES ALL OPERATING EXPENSES ONLY AND NOT PRE-OPERATIVE EXPENSES. THE LEARNED AR SUBMITTED THAT PRE-OPERATIVE EXPENSES CANNOT BE INCLUDED IN T HE OPERATING COST WHEN THERE IS NO MATERIAL BEFORE THE DEPARTMENTAL AUTHOR ITIES TO PROVE THAT THE ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 14 ASSESSEE HAS RECOVERED SUCH COST FROM THE AE. IN T HIS CONTEXT, THE LEARNED AR REFERRED TO A DECISION OF THE CO-ORDINATE BENCH IN CASE OF DCIT V/S. CONVERGYS INFORMATION MANAGEMENT INDIA PVT. LTD. (I TA 229/HYD/09 DATED 30-1-2011 WHEREIN IT WAS HELD AS UNDER: 10. THE CIT (A) NOTED THAT THE ASSESSEE HAS INCURRE D EXPENDITURE FROM 1-1-2004 TO 14-3-2004 I.E., AFTER ENTERING INT O AGREEMENT WITH AE ON 1-1-2004 AT RS.2,54,17,576/- AND THIS AMOUNT IS LIABLE FOR MARK UP AT 10% BECAUSE NO CUSTOMER WOULD PAY MARK UP BEF ORE ENTERING INTO AGREEMENT AND THE EXPENDITURE INCURRED IS ONLY AFTER AGREEMENT HAS TO BE MARK UP. ACCORDINGLY, THE CIT (A) IS JUS TIFIED IN CONSIDERING THE EXPENDITURE INCURRED AFTER 1-1-2004 TO 14-3-200 4 TO MAKE ADJUSTMENTS AT 10% OF THESE EXPENSES AT RS.24,41,75 7/-. THE REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO S HOW THAT THE ASSESSEE HAS INCURRED ANY EXPENDITURE BEFORE ENTERI NG INTO SERVICE AGREEMENT ON THE IMPUGNED ISSUE. ACCORDINGLY, WE C ONFIRM THE ORDER OF THE CIT (A) ON THIS ISSUE AND DISMISS THE GROUND TAKEN BY THE REVENUE. 28. ON A PERUSAL OF THE ORDERS OF THE TPO AS WELL A S CIT(A), IT COULD NOT BE KNOWN ON THE BASIS OF WHICH MATERIAL THEY HAVE COM E TO THE CONCLUSION THAT THE ASSESSEE HAS RECOVERED THE PRE-OPERATIVE EXPEN SES OF RS.44,00,547. IN ABSENCE OF ANY MATERIAL TO PROVE THAT IT HAS RECOVE RED THE PRE-OPERATIVE EXPENSES FROM ITS AE, THE CONCLUSION ARRIVED AT BY THE DEPARTMENTAL AUTHORITIES IS MERELY ON PRESUMPTION AND SURMISES. ADMITTEDLY, THE AGREEMENT, BETWEEN THE ASSESSEE AND ITS AE WAS ENTE RED ON 1 ST SEPT. 2004. THEREFORE, IT CANNOT BE CONCEIVED THAT THE AE WILL BEAR COST OF EXPENSES PRIOR TO THE DATE OF AGREEMENT. WHEN THE ASSESSEE HAS DE NIED OF HAVING BEEN REIMBURSED THE PRE-OPERATIVE EXPENSES THEN THE ONUS IS ON THE DEPARTMENT TO PROVE THE CONTRARY BY BRINGING COGENT MATERIAL ON R ECORD. THE ASSESSEE CERTAINLY CANNOT BE ASKED TO PROVE THE NEGATIVE. TH AT APART, THIS SORT OF EXERCISE, IN OUR VIEW, CANNOT BE TAKEN UP IN A PROC EEDING U/S 154 OF THE ACT. IN THESE CIRCUMSTANCES, FOLLOWING THE DECISION OF T HE CO-ORDINATE BENCH IN ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 15 CASE OF CONVERGYS MANAGEMENT (SUPRA) AND CONSIDERIN G THE FACT THAT THERE IS NO MATERIAL TO SHOW THAT THE ASSESSEE HAS RECOVERED THE PRE-OPERATIVE EXPENSES FROM ITS AE, THE AMOUNT OF RS.44,00,457/- CANNOT BE CONSIDERED AS PART OF THE OPERATING COST. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER/ TPO TO EXCLUDE IT FROM OPERATING COST WHILE COMPUTING T HE ALP. HENCE, THIS GROUND OF THE ASSESSEE IS ALLOWED. 29 . WE DIRECT THE AO/TPO TO COMPUTE THE ALP OF THE ASSE SSEE IN TERMS WITH OUR DIRECTIONS HEREINABOVE AND IF ON SUCH COMPUTATIO N ANY SHORTFALL IS FOUND, SAME MAY BE CONSIDERED TOWARDS TRANSFER PRICING ADJUSTMENT. 30. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLO WED. ORDER PRONOUNCED IN THE COURT ON 05-2-2014. SD/- SD/- ( B. RAMAKOTAIAH) ACCOUNT ANT MEMBER (SAKTIJIT DEY) JUDICIAL MEMBER DT/- 5 TH FEBRUARY, 2014. COPY FORWARDED TO: 1. M/S. MARKET TOOLS RESEARCH PVT. LTD., CYBER PEARL, BLOCK - II, 3 RD FLOOR, MADHAPUR, HYDERABAD 500 081 . 2. 3. 4 DY. COMMISSIONER OF I NCOME - TAX CIRCLE 16(2), HYDERABAD . CIT (A)-III, HYDERABAD. CIT-IV, HYDERABAD. 5 DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. JMR* ITA NO.1150 OF 2011 M/S. MARKET TOOLS RESEARCH PVT. LTD., HYDERABAD. 16