Appeal details
Counselvise Citation
[2016] 131 COUNSELVISE.COM (IT) 9246 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 11 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-11-2016
Appeal Filed By
Department
Order Result
Dismissed
Bench Allotted
A
Next Hearing Date
02-11-2016
Assessment Year
2005-2006
Appeal Filed On
05-12-2011
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER IT(TP)A NO.1211/BANG/2011 ASSESSMENT YEAR : 2005-06 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12(2), BANGALORE. VS. M/S. NVIDIYA GRPAHICS PVT. LTD., C-1, JACARANDA, WING-A, MANYATA EMBASSY BUSINESS PARK, OUTER RING ROAD, BANGALORE 560 046. PAN: AABCN 9200H APPELLANT RESPONDENT CO NO.48/BANG/2012 [IN IT(TP)A NO.1211/BANG/2011] ASSESSMENT YEAR : 2005-06 M/S. NVIDIYA GRPAHICS PVT. LTD., BANGALORE 560 045. PAN: AABCN 9200H VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12(2), BANGALORE. CROSS OBJECTOR RESPONDENT APPELLANT BY : SHRI KAMALADHAR, STANDING COUNSEL RESPONDENT BY : SHRI CHAVALI NARAYAN, CA DATE OF HEARING : 02.11.2016 DATE OF PRONOUNCEMENT : 23.11.2016 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 2 OF 19 1. THE ORDER OF THE LEARNED CIT(A) IN SO FAR AS I T RELATES TO THE FOLLOWING GROUNDS IS OPPOSED TO LAW AND FACTS O F THE CASE. 2. THE ID. CIT(A) ERRED IN HOLDING THAT ALL COMPAN IES HAVING RELATED PARTY TRANSACTIONS OUGHT TO BE EXCLUDED AS COMPARABLES IRRESPECTIVE OF THE PERCENTAGE OF RELATED PARTY TRA NSACTIONS. 3. THE ID. CIT(A) ERRED IN DIRECTING THE TPO/AO TO EXCLUDE THE COMPANIES HAVING PROFITS MORE THAN 50% ON THE C OST FROM THE LIST OF COMPARABLES. 4. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE SI ZE, TURNOVER AND BRAND OF THE COMPANY ARE DECIDING FACTORS FOR T REATING A COMPANY AS A COMPARABLE, AND ACCORDINGLY ERRED IN E XCLUDING M/S INFOSYS TECHNOLOGIES LTD. AS A COMPARABLE. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN HOLDING THAT FOREIGN EXCHANGE LOSS OR GAIN IS A PART OF OPERATING COST OR OPERATING INCOME, AS THE CASE MAY BE, WHEN THE TPO HAS EXCLUDED THIS DATA FROM THAT OF TH E COMPARABLES. 6. THE LEARNED CIT(A) ERRED IN HOLDING THAT THE AS SESSEE IS ELIGIBLE FOR A STANDARD DEDUCTION OF 5% FROM THE AR M'S LENGTH PRICE (ALP) DETERMINED BY THE TPO/AO. 7. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT( A) IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND TH AT OF THE ASSESSING OFFICER MAY BE RESTORED. 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR DELETE ANY OF THE GROUNDS MENTIONED ABOVE. 2. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION ASSA ILING THE ORDER OF CIT(APPEALS) ON CERTAIN GROUNDS WHICH ARE AS UNDER: - IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 3 OF 19 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW: 1. THE LEARNED CIT(A) HAS ERRED, IN LAW AND IN FAC TS, BY NOT ACCEPTING THE RESPONDENT'S PLEA IN ENTIRETY AND CON FIRMING WITH THE LEARNED ASSESSING OFFICER ('AO)/ TRANSFER PRICI NG OFFICER ('TPO') ON NOT ACCEPTING THE ECONOMIC ANALYSIS UNDE RTAKEN BY THE RESPONDENT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT READ WITH THE INCOME TAX RULES, 1962 AND CONDUCTING A FR ESH ECONOMIC ANALYSIS FOR THE DETERMINATION OF THE ARM' S LENGTH PRICE IN CONNECTION WITH THE IMPUGNED INTERNATIONAL TRANS ACTION AND HOLDING THAT THE RESPONDENT'S INTERNATIONAL TRANSAC TION IS NOT AT ARM'S LENGTH. 2. THE LEARNED CIT(A) HAS ERRED, IN LAW AND IN FAC TS, BY IGNORING THE FACT THAT SINCE THE RESPONDENT IS AVAI LING TAX HOLIDAY U/S 10A OF THE ACT, THERE IS NO MOTIVE OR REASON TO SHIFT PROFITS OUT OF INDIA, CURBING WHICH IS THE BASIC INTENTION OF INTRODUCING THE TRANSFER PRICING PROVISIONS. 3. THE LEARNED CLT(A) HAS ERRED, IN LAW AND IN FAC TS IN NOT ACCEPTING THE RESPONDENT'S PLEA AND CONFIRMING WITH THE LEARNED AO/TPO BY DETERMINING THE ARM'S LENGTH MARGIN/PRICE USING FINANCIAL YEAR 2004-2005 DATA WHICH WAS NOT AVAILAB LE TO THE RESPONDENT AT THE TIME OF COMPLYING WITH THE TRANSF ER PRICING DOCUMENTATION REQUIREMENTS. 4. THE LEARNED CLT(A) HAS ERRED, IN LAW AND IN FAC TS, BY REJECTING COMPANIES BY APPLYING DIFFERENT QUANTITAT IVE AND QUALITATIVE FILTERS: A. THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS BY NOT ACCEPTING THE RESPONDENT'S PLEA THAT 'ONSITE REVENUES GREATER THAN 75% OF THE REVENUES' SHOULD NOT BE USED AS A COMPARABILITY CRITERION. B. THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS, B Y NOT ACCEPTING RESPONDENT'S PLEA THAT COMPANIES HAVING E CONOMIC PERFORMANCE CONTRARY TO THE INDUSTRY BEHAVIOUR (E.G . COMPANIES WHICH SHOWED A DIMINISHING REVENUE TREND AND/OR UNDER-UTILISATION OF ASSETS, ETC) SHOULD NOT BE REJ ECTED. C. THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS, B Y NOT ACCEPTING THE RESPONDENT'S PLEA THAT CERTAIN COMPAR ABLE COMPANIES IDENTIFIED IN THE TRANSFER PRICING DOCUME NTATION, IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 4 OF 19 WHERE CONSOLIDATED RESULTS HAD BEEN USED FOR ANALYS IS SHOULD NOT BE REJECTED. THE RESPONDENT HAD CONSIDERED THE CONSOLIDATED RESULTS IN ONLY THOSE CASES WHERE THE INCOME OF THE INDIAN COMPANY CONSTITUTED MORE THAN 75% OF THE CONSOLIDATED COMPANY-WIDE/ SEGMENTAL REVENUES. D. THE LEARNED CIT(A) HAS ERRED IN LAW AND FACTS, B Y NOT ACCEPTING THE RESPONDENT'S PLEA THAT COMPANIES HAVI NG DIFFERENT ACCOUNTING YEAR (I.E. COMPANIES HAVING AC COUNTING YEAR OTHER THAN MARCH 31 OR COMPANIES WHOSE FINANCI AL STATEMENTS WERE FOR A PERIOD OTHER THAN 12 MONTHS) SHOULD NOT BE REJECTED. 5. THE LEARNED CIT(A) HAS ERRED IN LAW BY UPHOLDIN G THE TPO'S APPROACH OF EXERCISING HIS POWERS UNDER SECTI ON 133(6) OF THE ACT TO OBTAIN INFORMATION WHICH WAS NOT AVAILAB LE IN PUBLIC DOMAIN AND RELYING ON THE SAME FOR COMPARABILITY PU RPOSES. 6. THE LEARNED CIT(A) HAS ERRED, IN LAW AND IN FAC TS, BY ACCEPTING/REJECTING CERTAIN COMPARABLE COMPANIES US ING UNREASONABLE COMPARABILITY CRITERIA. 7. THE LEARNED CIT(A) HAS ERRED, IN LAW AND IN FAC TS, BY REJECTING A COMPANY HAVING MARGIN LESS THAN THE MAR GIN OF THE RESPONDENT COMPANY. 8. THE LEARNED CIT(A) HAS ERRED, IN LAW AND FACTS, BY NOT MAKING SUITABLE ADJUSTMENTS TO ACCOUNT FOR DIFFEREN CES IN THE RISK PROFILE OF THE RESPONDENT VIS-A-VIS THE COMPARABLES . THE RESPONDENT SUBMITS THAT EACH OF THE ABOVE GROUN DS IS INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. THE RESPONDENT CRAVES LEAVE TO ADD, ALTER, VARY, OM IT, AMEND OR DELETE ONE OR MORE OF THE ABOVE GROUNDS OF CROSS-OB JECTIONS AT ANY TIME BEFORE, OR AT THE TIME OF, HEARING OF THE APPEAL, SO AS TO ENABLE THE APPELLATE TRIBUNAL TO DECIDE THIS RESPON SE ACCORDING TO LAW. IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 5 OF 19 3. THROUGH THE APPEAL AND THE CO, THE PARTIES TO TH E APPEAL HAVE CONTESTED CERTAIN INCLUSION AND EXCLUSION OF THE CO MPARABLES CONSIDERED BY THE TPO. IN ORDER TO DEMONSTRATE THE NEED OF IN CLUSION/EXCLUSION OF THE COMPARABLES, THE LD. COUNSEL FOR THE ASSESSEE HAS F ILED A CHART DETAILING THE TURNOVER, NET MARGIN, RELATED PARTY TRANSACTIONS AN D THE REASONS FOR THE EXCLUSION/INCLUSION OF THE COMPARABLES AND ACCORDIN GLY ARGUMENTS WERE HEARD IN THE LIGHT OF THE CHART AND BRIEF SYNOPSIS FILED BY THE ASSESSEE DURING THE COURSE OF HEARING. 4. THE FACTS IN BRIEF RELATING TO THE TP ISSUE CULL ED OUT FROM THE ORDERS OF LOWER AUTHORITIES ARE THAT THE ASSESSEE, NIVIDIA GRAPHICS PVT. LTD., IS A SUBSIDIARY OF NIVIDIA INTERNATIONAL INC., US. NIVI DIA INDIA, THE ASSESSEE, PROVIDES RESEARCH & DEVELOPMENT SERVICES TO NIVIDIA INTERNATIONAL FROM ITS BANGALORE, PUNE AND HYDERABAD FACILITIES. NIVIDIA INDIA IS COMPENSATED ON A COST PLUS MARK-UP BASIS FOR THE PROVISION OF R&D SERVICES TO NIVIDIA INTERNATIONAL. 5. THE ASSESSEE FILED A RETURN OF INCOME DECLARING LOSS OF RS.71,21,810. THE RETURN OF INCOME WAS PROCESSED A ND HAS BEEN SELECTED FOR SCRUTINY ON ACCOUNT OF INTERNATIONAL TRANSACTIO NS ENTERED BY THE ASSESSEE WITH ITS AE. A REFERENCE WAS MADE TO TPO FOR DETERMINATION OF ARMS LENGTH PRICE (ALP) AND THE LD. TPO PASSED AN ORDER MAKING AN ADJUSTMENT OF INR 5,11,58,733 FOR THE RESEARCH & DE VELOPMENT SERVICES TRANSACTIONS. IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 6 OF 19 6. IN THE TP STUDY, THE ASSESSEE HAS SELECTED 45 CO MPARABLES AND THE TPO HAS REJECTED 35 COMPARABLES OUT OF THEM AND INC LUDED 7 NEW COMPARABLES. ACCORDINGLY 17 COMPARABLES WERE TAKEN BY THE TPO FOR DETERMINATION OF ALP. ACCORDINGLY, ASSESSMENT ORDE R WAS PASSED AGAINST WHICH AN APPEAL WAS FILED BEFORE THE CIT(APPEALS) A ND THE CIT(APPEALS) HAVING EXAMINED THE CLAIM OF ASSESSEE HAS DIRECTED THE AO TO EXCLUDE CERTAIN COMPARABLES FROM THE SET OF FINAL COMPARABL ES SELECTED BY THE TPO. 7. AGGRIEVED WITH THE ORDER OF CIT(APPEALS), THE RE VENUE IS IN APPEAL BEFORE THE TRIBUNAL AND THE ASSESSEE HAS FILED CO W ITH THE REQUEST FOR THE EXCLUSION OF SOME MORE COMPARABLES AND INCLUSION OF CERTAIN COMPARABLES. 8. THE TOTAL 17 COMPARABLES TAKEN BY THE TPO ARE AS UNDER:- 1. BODHTREE CONSULTING LTD. 2. SANKHYA INFOTECH LTD. 3. VISUAL SOFT TECHNOLOGIES LTD. (SEG.) 4. INFOSYS TECHNOLOGIES LTD. 5. SATYAM COMPUTER SERVICES 6. GEOMETRIC SOFTWARE SOLUTIONS CO. LTD. 7. TATA ELXSI LTD. (SEG.) 8. R S SOFTWARE (INDIA) LTD. 9. SASKEN COMMUNICATION TECHNOLOGIES LTD. (SEG.) 10. FLEXTRONICS SOFTWARE SYSTEMS LTD. (SEG.) IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 7 OF 19 11. IGATE GLOBAL SOLUTIONS LTD. 12. L & T INFOTECH LTD. 13. THIRDWARE SOLUTIONS LTD. 14. EXENSYS SOFTWARE SOLUTIONS LTD. 15. FOUR SOFT LTD. 16. SASKEN NETWORK SYSTEMS LTD. 17. LGS GLOBAL LTD. (LANCO GLOBAL SOLUTIONS LTD.) 9. OUT OF THE 17 COMPARABLES, THE CIT(APPEALS) HAS DIRECTED THE AO TO EXCLUDE THE FOLLOWING COMPARABLES, TO WHICH ASSESSE E HAS NO OBJECTION:- (1) SASKEN NETWORK SYSTEMS LTD. (2) FOUR SOFT LTD. (3) THIRDWARE SOLUTIONS LTD. (4) R S SOFTWARE (INDIA) LTD. (5) GEOMETRIC SOFTWARE SOLUTIONS CO. LTD. (6) TATA ELXSI LTD. (SEG.) (7) SASKEN COMMUNICATIONS TECHNOLOGIES LTD. (SEG.) (8) IGATE GLOBAL SOLUTIONS LTD. (9) FLEXTRONICS SOFTWARE SYSTEMS LTD. (10) L&T INFOTECH LTD. (11) SATYAM COMPUTER SERVICES (12) INFOSYS TECHNOLOGIES LTD. IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 8 OF 19 THE CIT(APPEALS) ALSO EXCLUDED LGS GLOBAL LTD. ON T HE BASIS OF MARGIN LESSER THAN THE TESTED PARTYS MARGIN AND THE LD. C OUNSEL FOR THE ASSESSEE HAS REQUESTED FOR THE INCLUSION OF THIS COMPARABLE WITH THE SUBMISSION THAT ON THE BASIS OF LESSER MARGIN THAN THE TESTED PARTY S MARGIN, COMPARABLE CANNOT BE EXCLUDED. 10. THE REVENUE HAS CHALLENGED THE EXCLUSION OF THE SE COMPARABLES IN ITS APPEAL, WHEREAS THE ASSESSEE FURTHER WANTS THE EXCLUSION OF SANKHYA INFOTECH LTD. AND EXENSYS SOFTWARE SOLUTIONS LTD. 11. WE HAVE HEARD THE ARGUMENT OF THE RIVAL PARTIES ON THE POINT OF EXCLUSION/INCLUSION OF THE COMPARABLES. WE THEREFO RE PREFER TO DEAL WITH THESE COMPARABLES ONE BY ONE. 12. DURING THE COURSE OF HEARING, THE LD. COUNSEL F OR THE ASSESSEE HAS INVITED OUR ATTENTION THAT VISUAL SOFT TECHNOLOGIES LTD ., INFOSYS TECHNOLOGIES LTD. , SATYAM COMPUTER SERVICES , GEOMETRIC SOFTWARE SOLUTIONS CO. LTD. , TATA ELXSI LTD. (SEG.) , R S SOFTWARE (INDIA) LTD. , SASKEN COMMUNICATION TECHNOLOGIES LTD. (SEG.) , FLEXTRONICS SOFTWARE SYSTEMS LTD. (SEG.) , IGATE GLOBAL SOLUTIONS LTD. AND L&T INFOTECH LTD. CANNOT BE CALLED TO BE GOOD COMPARABLES AS THEIR TURNOVER IS MORE THAN 10 TIMES OF THE TURNOVER OF THE ASSESSEE. THE ASSESSEES TURNO VER IS RS.4.95 CRORES, WHEREAS TURNOVER OF THESE COMPANIES RANGES FROM RS. 81.69 CRORES TO RS.6859.66 CRORES. THEREFORE, ON THE BASIS OF TURN OVER FILTER, THESE COMPARABLES ARE REQUIRED TO BE EXCLUDED FROM THE LI ST OF COMPARABLES. IN IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 9 OF 19 SUPPORT OF THIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE UPON THE ORDERS OF THE TRIBUNAL IN THE CA SE OF ITO V. MAXIM INDIA INTEGRATED CIRCUIT DESIGNS PVT. LTD. IN IT(TP)A NO.28/BANG/2012 IN WHICH IT HAS BEEN HELD THAT IF THE TURNOVER OF THE COMPARABL ES IS MORE THAN 10 TIMES OF THE TURNOVER OF THE TESTED PARTY, THE SAME HAS T O BE EXCLUDED FROM THE LIST OF COMPARABLES. SINCE WE HAVE TAKEN A CONSIST ENT VIEW IN THIS REGARD, WE FIND NO INFIRMITY IN EXCLUSION OF THESE COMPARAB LES. 13. WITH REGARD TO SANKHYA INFOTECH LTD ., THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THIS COMPANY IS FUNCTIO NALLY DIFFERENT FROM THE ASSESSEE COMPANY. IT WAS ENGAGED IN SOFTWARE PRODUCTS SILICON LMS/QT AND SILICON ATHENA AND THE REVENUE RECOGNITI ON TALKS OF ONLY SOFTWARE DEVELOPMENT, BUT THERE IS NO MENTION OF TH E PRODUCTS. IT WAS FURTHER CONTENDED THAT SEGMENTAL INFORMATION WAS AL SO NOT AVAILABLE. THE JUSTIFICATION OF ITS EXCLUSION WAS EXAMINED BY THE TRIBUNAL IN THE CASE OF ITO V. SUNQUEST INFORMATION SYSTEMS (INDIA) PVT. LT D. IN IT(TP)A NO.1032/BANG/2011 , COPY OF WHICH IS PLACED ON RECORD. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL IS EXTRACTED HEREUNDER FOR THE SAKE OF REFERENCE:- 19. IT WAS SUBMITTED BY THE LEARNED COUNSEL FOR TH E ASSESSEE THAT SANKHYA IS ENGAGED IN THE BUSINESS OF DEVELOPMENT O F SOFTWARE PRODUCTS & SERVICES AND TRAINING. THE COMPANY FOCUS ES ON THE DEVELOPMENT OF NICHE PRODUCTS FOR THE TRANSPORT AND AVIATION INDUSTRY. HOWEVER, SEGMENTAL INFORMATION IN RELATION TO THE A BOVE MENTIONED ACTIVITIES IS NOT AVAILABLE IN PUBLIC DOMAIN. THERE FORE, AS SANKHYA ENGAGES ITSELF IN PRODUCTS AND SERVICES AS WELL AS SOFTWARE TRAINING, IT IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 10 OF 19 CANNOT BE CONSIDERED AS A COMPARABLE OF THE APPELLA NT. THE PRODUCTS DEVELOPED AND OWNED BY SANKHYA ARE LISTED BELOW: (1) SILICON TM TRAINING SUITE OF PRODUCTS: THE PRODUCTS ARE A COMPREHENSIVE ENTERPRISE WIDE TRAINING PLATFO RM THAT COVERS THE ENTIRE SPECTRUM OF TRAINING IN A PAPERLESS ENVI RONMENT. IT COMPRISES OF FOUR PRODUCTS:- - SILICON TM LMS (TRAINING MANAGEMENT INFORMATION - SILICON TM QT (ONLINE ASSESSMENT SYSTEM) - SILICON TM LCMS (LEARNING CONTENT MANAGEMENT SYSTEM) - IRMAQ TM : THIS IS AN INTEGRATED RESOURCE PLANNING, MANAGEMENT TRACKING SYSTEM EXCLUSIVELY DEVELOPED FO R AIRLINE OPERATIONS. IT IS AN END-TO-END SOLUTION FOR ALL FL IGHT OPERATIONS. - SAKAI CLE : THIS IS A WIDELY USED AND POPULAR O PEN SOURCE LMS USED IN MANY LEADING EDUCATIONAL INSTITUTIONS A ND CORPORATE. THE RELEVANT EXTRACT FROM THE ANNUAL REPORT SUBSTAN TIATING THAT THE COMPANY ALSO ENGAGES IN DIFFERENT ACTIVITIES IS REPRODUCED BELOW: 2. ACTIVITIES THE COMPANY AS ENGAGED IN THE BUSINESS OF DEVELOPME NT OF SOFTWARE PRODUCTS & SERVICES AND TRAINING. THE PROD UCTION OF SOFTWARE IS NOT CAPABLE OF BEING EXPRESSED IN ANY G ENERIC UNIT AND HENCE 11 IS RIOT POSSIBLE TO GIVE THE INFORMATION A S REQUIRED BY CERTAIN CLAUSES OF PARAGRAPHS 3.4C AND 4 D OF PART II OF SCHEDULE VI OF THE COMPANIES ACT, 1956. THE DELHI TRIBUNAL IN ITO V. COLT TECHNOLOGY SERVICES INDIA PVT. LTD. (JUDGMENT DATED 23.10.2012 IN ITA NO. 609I/DEL/2011 FOR THE ASSESSMENT YEAR 2005-06) HAS HELD THAT THE SAID COM PANY IS NOT A COMPARABLE TO THE ASSESSEE THEREIN WHICH WAS ALSO I N THE BUSINESS OF SOFTWARE DEVELOPMENT. IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 11 OF 19 20. THE SUBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE ARE CONSIDERED. THE ACTIVITIES SET OUT ABOVE AND THE D ECISION OF THE DELHI ITAT RENDERED IN THE CONTEXT OF A SOFTWARE DEVELOPM ENT COMPANY SUCH AS THE ASSESSEE MAKES IT AMPLY CLEAR THAT THIS COMP ANY SANKHYA CANNOT BE REGARDED AS A COMPARABLE. THE SAME IS DIRECTED TO BE EXCLUDED FROM THE LIST OF COMPARABLE COMPANIES. 14. SIMILARLY, THIS COMPANY WAS ALSO EXAMINED BY TH E TRIBUNAL IN THE CASE OF DCIT V. TEXTRON GLOBAL TECHNOLOGY CENTRE PVT. LTD. IN IT(TP)A NO.29/BANG/2012 , OF WHICH COPY IS PLACED AT PAGES 935 TO 955 OF TH E ASSESSEES COMPILATION AND THE TRIBUNAL WHILE ADJUD ICATING THE ISSUE OF EXCLUSION OF THIS COMPARABLE, HAS EXAMINED THE PROF ILE OF THIS COMPARABLE AND HAS DIRECTED THE TPO/AO FOR ITS EXCLUSION. 15. SINCE THE PROFILE OF THIS COMPANY WAS EXAMINED BY THE TRIBUNAL IN THE AFORESAID ORDERS AND THE ASSESSMENT YEAR INVOLV ED IS ALSO THE SAME, WE FIND NO JUSTIFICATION TO READJUDICATE THE JUSTIF IABILITY OF ITS EXCLUSION FROM THE LIST OF COMPARABLES. WE ACCORDINGLY FOLLOWING THE AFORESAID ORDERS OF THE TRIBUNAL, HOLD THAT THIS COMPANY IS NOT A GOOD COMPARABLE AND WE ACCORDINGLY DIRECT THE AO FOR ITS EXCLUSION FROM TH E LIST OF COMPARABLES. 16. WITH REGARD TO THIRDWARE SOLUTIONS LTD. , THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THIS COMPANY IS ALSO FU NCTIONALLY DIFFERENT THAN THE ASSESSEE COMPANY AS THIS COMPANY WAS INVOL VED IN TRADING OF SOFTWARE AND REVENUE WAS FROM SALE OF LICENSE AND S UBSCRIPTION. IT WAS FURTHER CONTENDED THAT ITS EXCLUSION WAS EXAMINED B Y THE TRIBUNAL IN THE IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 12 OF 19 CASE OF SUNQUEST INFORMATION SYSTEMS (INDIA) PVT. LTD. (SUP RA) AND TEXTRON GLOBAL TECHNOLOGY CENTRE PVT. LTD. (SUPRA) [COPIES OF THE ORDERS ARE PLACED ON RECORD] AND WE FIND THAT THIS COMPANY WAS EXAMIN ED BY THE TRIBUNAL AND FOLLOWING THE ORDER OF THE HYDERABAD BENCH OF T HE TRIBUNAL IN THE CASE OF CNO IT SERVICES (INDIA) PVT. LTD. [FORMERLY CONSECO DATA SERVICES (I) PVT. LTD.] V. DCIT, CIR. 1(2), IN IT(TP)A NO.1280/H YD/2010 FOR THE AY 2005- 06 , THE TRIBUNAL DIRECTED THE TPO FOR ITS EXCLUSION F ROM THE LIST OF COMPARABLES. THE RELEVANT OBSERVATIONS OF THE TRIB UNAL ARE EXTRACTED AS UNDER:- 21. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTE D BEFORE US THAT TWO OF THE COMPARABLE COMPANIES OUT OF THE 10 EXCLUDED BY THE CIT(A) BY APPLYING RPT FILTER AND WHICH GETS INCLUD ED IN THE COMPARABLE COMPANIES BECAUSE OF 15% RPT BEING ADOPT ED AS THRESHOLD LIMIT FOR EXCLUDING COMPANIES FOR THE PUR POSE OF COMPARABILITY , VIZ., FOUR SOFT LTD., AND THIRDWARE SOLUTIONS LTD., WILL HAVE TO BE EXCLUDED AS THESE COMPANIES WERE CONSIDE RED AS NOT COMPARABLE. THESE COMPANIES ACCORDING TO HIM, WILL HOWEVER, HAVE TO BE EXCLUDED AS THESE TWO COMPANIES WERE HELD TO BE NOT COMPARABLE WITH AN ASSESSEE SUCH AS THE ASSESSEE IN THE PRESEN T CASE PROVIDING SOFTWARE DEVELOPMENT SERVICES BY THE ITAT HYDERABAD BENCH IN THE CASE OF CNO IT SERVICES (INDIA) PVT. LTD. (FORMERLY KNOWN AS CONSECO DATA SERVICES (INDIA) PVT. LTD.) HYDERABAD VS. DCIT, CIRCLE 1(2) HYDERABAD, IN ITA.NO.1280/HYD/2010 ASSESSMENT YEAR 2005- 2006 ORDER DATED 12.2.2014. 22. WE HAVE CONSIDERED HIS SUBMISSION AND FIND TH AT THE ITAT HYDERABAD BENCH ON IDENTICAL FACTS, HELD THAT THE A FORESAID TWO COMPANIES VIZ., FOUR SOFT LTD., AND THIRDWARE SOLU TIONS LTD., ARE NOT COMPARABLE COMPANIES IN SOFTWARE DEVELOPMENT SERVIC ES COMPANIES. THE FOLLOWING WERE THE RELEVANT OBSERVATIONS:- 15.4. FOURSOFT LIMITED : .. IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 13 OF 19 15.5. THIRDWARE SOFTWARE SOLUTIONS LIMITED : THIS COMPANY IS OBJECTED TO BY THE ASSESSEE ON THE REASON THAT THE SAID THIRDWARE SOFTWARE SOLUTIONS LTD. IS ENGAGED I N SALE OF SOFTWARE LICENCE AND RELATED SERVICES AND NOT A SER VICE PROVIDER. REFERRING TO THE ANNUAL REPORT, IT WAS SUBMITTED TH AT THIS COMPARABLE WAS REJECTED BY THE ITAT, PUNE IN THE CA SE OF EGAIN COMMUNICATIONS LTD. THIS COMPANY HAVING REVENUE FRO M PRODUCT LICENSE AND EARNING EXTRAORDINARY PROFIT DU E TO INTANGIBLE OWNS. 15.6. THESE THREE COMPARABLE ABOVE FLEXTRONICS SOFT WARE LIMITED, FOURSOFT LIMITED AND THIRDWARE SOFTWARE SO LUTION LIMITED WERE ANALYSED BY THE COORDINATE BENCH OF TH E TRIBUNAL IN THE CASE OF INTOTO SOFTWARE SOLUTIONS PVT. LTD. (SUPRA) WHEREIN IT HAS BEEN HELD AS UNDER : '23. THE OTHER COMPANIES WHICH ARE OBJECTED TO BY T HE ASSESSEE ARE FLEXTRONICS SOFTWARE LIMITED, FOURSOFT LIMITED AND THIRDWARE SOFTWARE SOLUTION LIMITED. AS FAR AS THESE THREE COMPANIES ARE CONCERNED, THE LEARNED COUNSEL APPEARING ON BEHALF OF THE ASSESSEE SUBMITT ED THAT THEY ARE INTO BOTH SOFTWARE AS WELL AS PRODUCT DEVELOPMENT. HE SUBMITTED THAT THE TPO HAS TAKEN NO TE OF THE FACT THESE COMPANIES ARE ALSO INTO PRODUCT DEVELOPMENT BUT HAS SELECTED THESE COMPANIES AS COMPARABLES BY APPLYING THE FILTER OF MORE THAN 70% OF ITS REVENUE BEING FROM SOFTWARE DEVELOPMENT SERVICES. T HE LEARNED COUNSEL SUBMITTED THAT THE FUNCTIONS OF THE SE COMPANIES ARE DIFFERENT FROM THE ASSESSEE WHO WAS I NTO SOLE ACTIVITY OF SOFTWARE DEVELOPMENT FOR ITS ASSOC IATED ENTERPRISE. HE SUBMITTED THAT THE TPO HAS ALLOCATED THE EXPENDITURE IN THE PROPORTION OF THE REVENUE OF THE SE COMPANIES FROM SOFTWARE SERVICES AND SOFTWARE PRODU CTS AND HAS ADOPTED THE FIGURE AS SEGMENTAL MARGIN OF T HE COMPANY AND HAS TAKEN THESE COMPANIES AS COMPARABLE S. HE SUBMITTED THAT BY TAKING THE PROPORTIONATE EXPENDITURE, THE CORRECT FINANCIAL RESULTS WOULD NO T EMERGE. HE SUBMITTED THAT NOTHING PREVENTED THE ASSESSING OFFICER/TPO FROM OBTAINING THE SEGMENTAL DETAILS FROM THE RESPECTIVE COMPARABLE COMPANIES BE FORE ADOPTING THEM AS COMPARABLE COMPANIES AND BEFORE TAKING THE OPERATING MARGIN FOR ARRIVING AT THE ARM S LENGTH PRICE. HE SUBMITTED THAT WHEREVER THE SEGMEN TAL DETAILS ARE NOT AVAILABLE, THEN THE SAID COMPANIES SHOULD IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 14 OF 19 NOT BE TAKEN AS COMPARABLES. FOR THIS PURPOSE, HE P LACED RELIANCE UPON THE DECISION OF THE BANGALORE TRIBUNA L IN THE CASE OF FIRST ADVANTAGE OFFSHORE SERVICES PVT. L TD. VS. THE DCIT IN ITA.NO.1252/BANG/2010 WHEREIN THESE COMPANIES WERE DIRECTED TO BE EXCLUDED FROM THE LIS T OF COMPARABLES. 23. THE LEARNED D.R. HOWEVER, SUPPORTED THE ORDE RS OF THE AUTHORITIES BELOW. 24. HAVING HEARD BOTH THE PARTIES AND HAVING GON E THROUGH THE MATERIAL ON RECORD, WE FIND THAT THE TPO AT PAGE 37 OF HIS ORDER HAS BROUGHT OUT THE DIFFERENCES BETWEEN A PRODUCT COMPA NY AND A SOFTWARE DEVELOPMENT SERVICES PROVIDER. THUS, IT IS CLEAR TH AT HE IS AWARE OF THE FUNCTIONAL DISSIMILARITY BETWEEN A PRODUCT COMPANY AND A SOFTWARE DEVELOPMENT SERVICE PROVIDER. HAVING TAKEN NOTE OF THE DIFFERENCE BETWEEN THE TWO FUNCTIONS, THE ASSESSING OFFICER OU GHT NOT TO HAVE TAKEN THE COMPANIES WHICH ARE INTO BOTH THE PRODUCT DEVELOPMENT AS WELL AS SOFTWARE DEVELOPMENT SERVICE PROVIDER AS CO MPARABLES UNLESS THE SEGMENTAL DETAILS ARE AVAILABLE. EVEN IF HE HAS ADOPTED THE FILTER OF MORE THAN 75% OF THE REVENUE FROM THE SOFTWARE SERV ICES FOR SELECTING A COMPARABLE COMPANY, HE OUGHT TO HAVE TAKEN THE SEGM ENTAL RESULTS OF THE SOFTWARE SERVICES ONLY. THE PERCENTAGE OF EXPEN DITURE TOWARDS THE DEVELOPMENT OF SOFTWARE PRODUCTS MAY DIFFER FROM CO MPANY TO COMPANY AND ALSO IT MAY NOT BE PROPORTIONATE TO THE SALES FROM THE SALE OF SOFTWARE PRODUCTS. UNDER SECTION 133(6) OF THE I .T. ACT, THE TPO HAS THE POWER TO CALL FOR THE NECESSARY DETAILS FROM TH E COMPARABLE COMPANIES. IT IS SEEN THAT THE ASSESSING OFFICER/TP O AS EXERCISED THIS POWER TO CALL FOR DETAILS WITH REGARD TO THE VARIOU S COMPANIES. AS SEEN FROM THE ANNUAL REPORT OF FOURSOFT LIMITED WHICH IS REPRODUCED AT PAGE 7 OF THE TPOS ORDER, THE SAID COMPANY HAS DERIVED INCOME FROM SOFTWARE LICENCE ALSO AND AMCS. 25. AS FAR AS THIRDWARE SOFTWARE SOLUTION LIMIT ED IS CONCERNED, WE FIND FROM THE INFORMATION FURNISHED BY THE SAID COMPANY THAT THOUGH THE SAID COMPANY IS ALSO INTO PRODUCT DEVELO PMENT, THERE ARE NO SOFTWARE PRODUCTS THAT THE COMPANY INVOICED DURING THE RELEVANT FINANCIAL YEAR AND THE FINANCIAL RESULTS ARE IN RES PECT OF SERVICES ONLY. THUS, IT IS CLEAR THAT THERE IS NO SALE OF SOFTWARE PRODUCTS DURING THE YEAR BUT THE SAID COMPANY MIGHT HAVE INCURRED EXPEN DITURE TOWARDS THE DEVELOPMENT OF THE SOFTWARE PRODUCTS. IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 15 OF 19 26. AS FAR AS FLEXTRONICS SOFTWARE LIMITED IS CON CERNED, WE FIND THAT AT PAGE 90 OF HIS ORDER, THE TPO HAS ALSO OBSE RVED THAT THE SAID COMPANY HAS INCURRED EXPENDITURE FOR SELLING OF PRO DUCTS AND HAS INCURRED R & D EXPENDITURE FOR DEVELOPMENT OF THE P RODUCTS. THE ABOVE FACTS CLEARLY DEMONSTRATE THAT THERE IS FUNCT IONAL DISSIMILARITY BETWEEN THE ASSESSEE AND THESE COMPANIES AND WITHOU T MAKING ADJUSTMENT FOR THE DISSIMILARITIES BROUGHT OUT BY T HE TPO HIMSELF, THESE COMPANIES CANNOT BE TAKEN AS COMPARABLE COMPANIES. THE METHOD ADOPTED BY THE TPO TO ALLOCATE EXPENDITURE PROPORTI ONATELY TO THE SOFTWARE DEVELOPMENT SERVICES AND SOFTWARE PRODUCT ACTIVITY CANNOT BE SAID TO BE CORRECT AND REASONABLE. WHEREVER, THE AS SESSING OFFICER/TPO CANNOT MAKE SUITABLE ADJUSTMENT TO THE FINANCIAL RE SULTS OF THE COMPARABLE COMPANIES WITH THE ASSESSEE COMPANY TO B RING THEM ON PAR WITH THE ASSESSEE, THESE COMPANIES ARE TO BE EXCLUD ED FROM THE LIST OF COMPARABLES. THEREFORE, WE DIRECT THE ASSESSING OFF ICER/TPO TO EXCLUDE THESE THREE COMPANIES FROM THE LIST OF COMP ARABLES. 17. SIMILARLY, ITS EXCLUSION WAS ALSO EXAMINED IN T HE CASE OF TEXTRON GLOBAL TECHNOLOGY CENTRE PVT. LTD. (SUPRA) . SINCE THE TRIBUNAL HAS TAKEN CONSISTENT VIEW WITH RESPECT TO THIS COMPARABLE BY HOLDING THAT IT IS FUNCTIONALLY DIFFERENT, WE FIND NO JUSTIFICATION TO READJUDICATE IT AGAIN. WE ACCORDINGLY FOLLOWING THE AFORESAID ORDERS OF THE T RIBUNAL, HOLD THAT THIS COMPANY CANNOT BE CALLED TO BE A GOOD COMPARABLE AN D WE ACCORDINGLY DIRECT THE TPO/AO TO EXCLUDE THIS COMPANY VIZ., THI RDWARE SOLUTIONS LTD., FROM THE LIST OF COMPARABLES. 18. WITH REGARD TO EXENSYS SOFTWARE SOLUTIONS LTD. , THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THIS COMPANY IS ALS O FUNCTIONALLY DIFFERENT AS THERE WAS AMALGAMATION OF THIS COMPANY WITH HOLO OL INTERNATIONAL LTD. DURING THE IMPUGNED ASSESSMENT YEAR. IT WAS ALSO E NGAGED IN DEVELOPMENT AND CONSULTANCY IN SOFTWARE, BUT THE BR EAK-UP OF THE SAME IS IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 16 OF 19 NOT GIVEN IN THE ANNUAL REPORT. THERE WERE HEAVY R &D EXPENDITURE, BUT DETAILS OF THE SAME WERE NOT ADEQUATELY PROVIDED IN THE ANNUAL REPORT. COPY OF THE ANNUAL REPORT IS PLACED AT PAGES NO.744 TO 766 OF THE COMPILATION OF THE ASSESSEE. 19. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTEN DED THAT JUSTIFICATION OF ITS EXCLUSION WAS CONSIDERED BY THE TRIBUNAL IN THE CASE OF SUNQUEST INFORMATION SYSTEMS (INDIA) PVT. LTD. (SUPRA) AND TEXTRON GLOBAL TECHNOLOGY CENTRE PVT. LTD. (SUPRA) . COPIES OF THE ORDERS ARE AVAILABLE ON RECORD AT PAGES 903 TO 955 OF THE COMPILATION OF TH E ASSESSEE. IN THE CASE OF SUNQUEST INFORMATION SYSTEMS (INDIA) PVT. LTD. (SUP RA) , THIS COMPANY WAS EXAMINED BY THE TRIBUNAL IN PARA 14 OF ITS ORDE R IN WHICH THE TRIBUNAL HAS DIRECTED THE AO/TPO FOR ITS EXCLUSION, FOLLOWIN G ANOTHER ORDER OF THE TRIBUNAL IN THE CASE OF AGNITY INDIA TECHNOLOGIES V. ITO IN IT(TP)A NO.3856/DEL/2010 . THE RELEVANT OBSERVATIONS OF THE TRIBUNAL ARE EXT RACTED HEREUNDER FOR THE SAKE OF REFERENCE:- GROUND NO.3 RAISED BY THE REVENUE IS MISCONCEIVED AND THE ISSUE DOES NOT ARISE OUT OF THE ORDER OF THE CIT(A) . AS WE HAVE ALREADY SEEN THE CIT(A) REJECTED SOME OF THE COMPAR ABLE COMPANIES CHOSEN BY THE TPO BY APPLYING RELATED PAR TY TRANSACTION FILTER. THE FILTER OF COMPANIES DEALIN G IN SOFTWARE PRODUCTS AND ABNORMAL PROFITS OWING TO AMALGAMATION OF THE COMPANIES DURING THE RELEVANT PERIOD THEREBY SHOWIN G ABNORMAL PROFITS WAS APPLIED TO EXCLUDE EXENSYS SOFTWARE SOL UTIONS LTD. INFOSYS TECHNOLOGIES LTD., WAS EXCLUDED FOR REASONS OF HIGH TURNOVER AND HIGH RISK PROFILE. SATYAM COMPUTER SE RVICES LTD., HAS TO BE EXCLUDED FROM THE COMPARABLE COMPANIES FO R NON- RELIABILITY OF FINANCIAL DATA AS IT WAS INVOLVED IN FINANCIAL SCAM. IN DOING SO, THE CIT(A) FOLLOWED THE DECISION OF TH IS HONBLE IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 17 OF 19 TRIBUNAL IN AGNITY INDIA TECHNOLOGIES V. ITO (ITA 3856/DEL/2010) AND SAP INDIA PVT. LTD V. ITO [ITA N O. 398/8/2008]. THEREFORE THE GRIEVANCE AS PROJECTED BY THE REVENUE IN GROUND NO.3 IS MISCONCEIVED. ON THE FAC TS OF THE PRESENT CASE, WE ARE OF THE VIEW THAT THE CIT(A) RI GHTLY EXCLUDED EXENSYS SOFTWARE SOLUTIONS LTD., INFOSYS TECHNOLOGI ES LTD., AND SATYAM COMPUTERS LTD., FROM THE LIST OF COMPARABLE COMPANIES. 20. SIMILARLY, ITS EXCLUSION WAS ALSO EXAMINED BY T HE TRIBUNAL IN THE CASE OF TEXTRON GLOBAL TECHNOLOGY CENTRE PVT. LTD. (SUPRA) IN PARA 14 OF ITS ORDER. 21. SINCE THE TRIBUNAL HAS TAKEN A CONSISTENT VIEW THAT THIS COMPANY IS NOT A GOOD COMPARABLE, WE FIND NO JUSTIFICATION TO TAKE A CONTRARY VIEW, WHERE THE PROFILE OF ASSESSEE COMPANY AND EXENSYS S OFTWARE SOLUTIONS LTD. ARE ALMOST SAME AND WE ACCORDINGLY HOLD THAT E XENSYS SOFTWARE SOLUTIONS LTD. IS NOT A GOOD COMPARABLE AND WE DIRE CT THE AO/TPO FOR ITS EXCLUSION FROM THE LIST OF COMPARABLES. 22. WITH REGARD TO FOUR SOFT LTD ., THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THIS COMPANY WAS REJECTED BY THE CIT (APPEALS) BY APPLYING RPT FILTER. IN THE CASE OF THIS COMPARABLE RPT WAS 19.89%, WHEREAS THE TRIBUNAL HAS REPEATEDLY HELD THAT COMPARABLE WHICH HAS MORE THAN 15% RPT TRANSACTION HAS TO BE EXCLUDED FROM THE LIST OF COMPARABLES. IN THIS CASE, RPT WAS 19.89%, THEREFORE THE CIT(APPEALS) HA S RIGHTLY EXCLUDED THE SAME FROM THE LIST OF COMPARABLES BY FOLLOWING THE RPT FILTER. IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 18 OF 19 23. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO INVIT ED OUR ATTENTION THAT THIS COMPARABLE WAS ALSO EXCLUDED BY THE TRIBUNAL I N THE CASE OF SUNQUEST INFORMATION SYSTEMS (INDIA) PVT. LTD. (SUPRA) ON THE GROUND OF FUNCTIONAL DIFFERENCE; WHEREAS THIS COMPANY CAN ALSO BE EXCLUD ED BY APPLYING THE RPT FILTER. THIS COMPANY WAS ALSO EXAMINED BY THE TRIBUNAL IN THE CASE OF TEXTRON GLOBAL TECHNOLOGY CENTRE PVT. LTD. (SUPRA) IN PARA 22 OF ITS ORDER AND THE TRIBUNAL HAS HELD THAT THIS COMPARABLE BE E XCLUDED FROM THE LIST OF COMPARABLE COMPANIES. BESIDES BEING FUNCTIONALLY DIFFERENT, THIS COMPANY HAS MORE RELATED PARTY TRANSACTIONS (RPT), THEREFOR E APPLYING THE RPT FILTER ALSO, THIS COMPANY CANNOT BE INCLUDED IN THE LIST OF COMPARABLES. WE ACCORDINGLY UPHOLD THE ORDER OF CIT(APPEALS) WHO HA S RIGHTLY DIRECTED ITS EXCLUSION. 24. WITH REGARD TO LGS GLOBAL LTD. (LANCO GLOBAL SOLUTIONS LTD.), THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THIS CO MPANY WAS EXCLUDED BY THE CIT(APPEALS) ONLY FOR THE SIMPLE REASON THAT ITS MARGIN WAS LESSER THAN THE TESTED PARTY MARGIN. BESIDES, NO OTHER RE ASONS WERE CITED BY THE CIT(APPEALS) FOR ITS EXCLUSION. 25. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTEN DED THAT ITS TURNOVER WAS 6.11 CRORES, WHEREAS THE TURNOVER OF ASSESSEE I S 4.59 CRORES, THEREFORE LESSER MARGIN CANNOT BE A GROUND FOR EXCL USION OF THE COMPANY FROM THE LIST OF COMPARABLES. WE ACCORDINGLY DIREC T THE AO/TPO TO INCLUDE IT(TP)A NO.1211/BANG/2011 & CO NO.48/BANG/2012 PAGE 19 OF 19 THIS COMPARABLE IN THE LIST OF COMPARABLES. ACCORD INGLY, APPEAL OF THE REVENUE AND CO OF THE ASSESSEE ARE DISPOSED OF. 26. IN THE RESULT, THE APPEAL OF REVENUE IS DISMIS SED AND CO OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 23 RD DAY OF NOVEMBER, 2016. SD/- SD/- ( S. JAYARAMAN ) (SUNIL KUMAR YA DAV ) ACCOUNTANT MEMBER JUDIC IAL MEMBER BANGALORE, DATED, THE 23 RD NOVEMBER, 2016. /D S/ COPY TO: 1. REVENUE 2. ASSESSEE 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.
