DCIT, CHENNAI V. Symantec Software and Services India Pvt ltd., CHENNAI

ITA 1289/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 8753 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2016
• Appeal Filed By: Department
• Bench Allotted: D
• Next Hearing Date: 16-06-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 27-05-2015
• Court: TRIBUNAL
• Department Lawyers: ANURAG SAHAY
• Keywords: Transfer pricing; Condonation of delay
• Section: 234B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , ! ' ! # . $ % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.1289/MDS./2015 & C.O. NO.86/MDS./2015 / ASSESSMENT YEAR :2010-11 DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(2), AYAKAR BHAVAN,7 TH FLOOR, NEW BLOCK, CHENNAI-34. VS. M /S.SYMANTEC SOFTWARE AND SERVICES INDIA PVT. LTD., 1-124,BLOCK 1C, 5 TH FLOOR, DLF IT PARK, MOUNT POONAMALLEE ROAD, MOONLIGHT STOP, CHENNAI 600 089. [PAN AAKCS 5422 K ] ( () / APPELLANT) ( *+() /RESPONDENT/ CROSS OBJECTOR) ./ I.T.A.NO.1004/MDS./2015 / ASSESSMENT YEAR : 2010-11 M /S.SYMANTEC SOFTWARE AND SERVICES INDIA PVT. LTD., 1-124,BLOCK 1C, 5 TH FLOOR, DLF IT PARK, MOUNT POONAMALLEE ROAD, MOONLIGHT STOP, CHENNAI 600 089. VS. DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 6(2), AYAKAR BHAVAN,7 TH FLOOR, NEW BLOCK, CHENNAI-34. [PAN AAKCS 5422 K ] ITA NOS.1004,1289/MDS./15 CO NO.86/MDS./15 M/S.SYMANTEC SOFTWARE AND SERVICES INDIA P LTD :- 2 -: ( () / APPELLANT) ( *+() /RESPONDENT) ASSESSEE BY : MR.PERCY PARDIWALLA,SENIOR COUNSEL MR.VIKRAM VIJARAGHWAN,ADVOCATE MR.SHEKHAR DHORE REVENUE BY : MR.ANURAG SAHAY, CIT D.R / DATE OF HEARING : 16 - 06 - 201 6 / DATE OF PRONOUNCEMENT : 20 - 07 - 2016 , / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THE ASSESSEES APPEAL IS DIRECTED AGAINST THE OR DER OF THE ASSESSING OFFICER DATED 27.02.2015 PASSED U/S.143( 3) R.W.S.92CA(4) OF THE ACT, WHICH IS EMANATED FROM DIRECTION OF THE DISPUTE RESOLUTION PANEL (DRP), CHENNAI DATED 29.12.2014 U/S.144C(5) O F THE ACT PERTAINING TO ASSESSMENT YEAR 2010-11. 1.1 THE REVENUES APPEAL IS DIRECTED AGAINST THE O RDER OF DRP PASSED U/S.144(5) DATED 29.12.2014 AND CORRESPONDIN GLY, THE ASSESSEE FLED A CROSS OBJECTION IN C.O.NO.86/MDS./2 015. FIRST WE TAKE UP REVENUES APPEAL IN ITA NO.1289/MD S./15 2. ON PERUSING THE APPEAL, WE FIND THAT THE AO HAD FILED THE APPEAL WITH DELAY OF 29 DAYS. THE LEARNED AO HAS SUBMITTED A PETITION DATED 27.05.2015 SEEKING CONDONATION OF DELAY AND THE AO STATED IN THIS PETITION THAT THE DELAY OF 29 DAYS IN FILING THE AP PEAL BEFORE THIS TRIBUNAL IS ON ACCOUNT OF MIXING UP OF PAPERS IN HI S OFFICE AND IT TOOK ITA NOS.1004,1289/MDS./15 CO NO.86/MDS./15 M/S.SYMANTEC SOFTWARE AND SERVICES INDIA P LTD :- 3 -: TIME TO LOCATE THE SAME AND AS SOON AS HE TRACED TH E RECORDS, HE FILED THE APPEAL ON 27.05.2015. IN OUR OPINION, THE REASO NS EXPLAINED BY THE AO FOR FILING THE APPEAL BELATEDLY IS BONAFIDE. ACCORDINGLY, THE DELAY IS CONDONED. 3. IN THIS CASE, THE ASSESSEE CONSIDERED M/S.QUINTEGRA SOLUTIONS LIMITED ( QUINTEGRA ) AS COMPARABLE. THE TPO REJECTED THE SAME ON THE REASON THAT THE COMPANY IS BEING REPORTED LOSS SINCE THE YEAR ENDED 31.03.2009. ANOTHER REASON FOR EXCLUSION OF THE COMPARABLE IS THAT THE COMPARABLE HAD BEEN INCURRING HEAVY LOSSES CONTINUOUSLY DUE TO EXTRAORDINARY EVENTS I.E., TAKEOVER OF COMPANIES BY THE COMPARABLE DURING THE F.Y. 2008-09 & 2009-10 AS MENTIONED IN D IRECTORS REPORT. THE DRP DIRECTED TO EXCLUDE, ONLY IF THERE IS LOSS IN CONTINUOUS YEARS I.E. F.Y 2007-08, 2008-09 & 2009-10. FURTHER, THE D RP HAS ALSO CONCURRED WITH THE SUBMISSIONS OF THE ASSESSEE THAT THE IMPACT OF TAKEOVER OF COMPANIES BY QUINTEGRA GROUP WILL EFFEC T CONSOLIDATED FINANCIAL STATEMENT, NOT STAND ALONE FINANCIAL STAT EMENT OF QUINTEGRA FOR F.Y 2009-10. AGAINST THIS FINDING OF THE DRP, THE REVENUE IS IN APPEAL BEFORE US. 4. THE LD.D.R SUBMITTED THAT QUINTEGRA HAS BEEN CO NTINUOUSLY INCURRING LOSSES FROM THE F.Y 2008-09 TO 2011-12. AS SUCH IT IS NOT NORMAL TO CONSIDER THAT AS COMPARABLE TO THE ASSESS EES CASE. IT IS ALSO SUBMITTED THAT AS PER THE DIRECTORS REPORT, THE CO MPANY HAS NOT ITA NOS.1004,1289/MDS./15 CO NO.86/MDS./15 M/S.SYMANTEC SOFTWARE AND SERVICES INDIA P LTD :- 4 -: RECOVERED FROM THE BURDEN OF THE HEAVY LOSS INCURRE D BY TAKEOVER OF SOME COMPANIES AS BRIEFED IN THE LAST ANNUAL REPORT . THEREFORE, IT CANNOT BE COMPARABLE TO THE ASSESSEES CASE. 5. ON THE OTHER HAND, THE LD.A.R SUBMITTED THAT QU INTEGRA IS HAVING OPERATIONAL PROFIT TO DEMONSTRATE IT, DREW OUR ATTE NTION TO THE FINANCIAL ANALYSIS REPORTED IN PAGE-275 OF THE PAPER BOOK HER EIN BELOW REPRODUCED AND SUBMITTED THAT THERE IS OPERATING PR OFIT AT 0.75% AFTER EXCLUDING THE WRITE OFF ACCOUNT BALANCE OF SUBSIDIA RY AT ` 4,16,79,943 PURSUANT TO AN ORDER OF GOVERNMENT OF SINGAPORE. SYMANTEC SOFTWARE AND SERVICES INDIA P LTD . TRANSFER PRICING ASSESSMENT FOR A.Y 2010-11 FINANCIAL ANALYSIS OF COMPARABLE COMPANY-QUINTEGRA SOLUTIONS LIMITED PARTICULARS AMOUNT (RS.) TOTAL INCOME (AS PER P&L) 37,39,04,836 LESS: NON OPERATING INCOME -- TOTAL OPERATING INCOME 37,39,04,836 TOTAL EXPENSES (AS PER P&L) 53,16,92,022 LESS: NON OPERATING EXPENSES - FINANCE INTEREST 12,70,07,619 - MISCELLANEOUS EXPENSES W/O 4,16,79,943 - INTEREST ON TERM LOAN - 81,15,618 ADD: FRINGE BENEFIT TAX - TOTAL OPERATING EXPENSES 37,11,20,078 TOTAL OPERATING PROFIT 27,84,758 OPERATING PROFIT/OPERATING COST 0.75% ITA NOS.1004,1289/MDS./15 CO NO.86/MDS./15 M/S.SYMANTEC SOFTWARE AND SERVICES INDIA P LTD :- 5 -: FURTHER, HE SUBMITTED THAT QUINTEGRA IS NOT CONTINU OUSLY LOSS MAKING, BUT ITS OPERATING PROFIT IS AS FOLLOWS:- FINANCIAL YEAR PERCENTAGE OF OPERATING PROFIT 2007 - 08 21.74% 2008 - 09 ( - ) .62% 2009 - 10 NOT AVAILABLE AT THE TIME OF ASSESSMENT FURTHER, HE RELIED ON THE JUDGEMENT OF CO-ORDINATE BENCH OF HYDERABAD IN THE CASE OF BRIGADE GLOBAL SERVICES P. LTD., IN ITA NO.1494/HYD./2010 VIDE ORDER DATED 26.11.2012 WHERE IN OBSERVED THAT REGARDING LOSS MAKING COMPANY IS AS FOLLOWS:- 26. WE HAVE HEARD BOTH THE PARTIES ON THESE COMPAR ABS. THE CONTENTION OF THE ASSESSEE IS THAT THE LOSS MAK ING COMPANIES WERE NOT TO BE TAKEN OUT FROM THE COMPARA BLES WHILE DETERMINING THE ALP. WE FMD MERIT IN THE ARGU MENT OF THE ASSESSEES COUNSEL. DETERMINING OF ALP IS DE PEND UPON THE COMPARABLES OF IDENTICAL OR SIMILAR IN CON TROLLED TRANSACTIONS IN SIMILAR OR COMPARABLE CIRCUMSTANCES AND THEREAFTER SUITABLE ADJUSTMENT HAS TO BE MADE TO SE T OFF THE DIFFERENCE TO MAKE THE TRANSACTION COMMERCIALLY COMPARABLE. UPON CAREFUL CONSIDERATION OF THE ASSES SEES COUNSEL PLEA, WE FIND OURSELVES IN AGREEMENT WITH T HE ASSESSEES CONTENTION THAT ONLY ABNORMAL LOSS MAKIN G COMPANIES ARE TO BE TAKEN OUT FROM THE COMPARABLES. THE JUDGEMENT RELIED ON BY THE ASSESSEES COUNSEL IN QU ARK SYSTEMS PVT. LTD. (32 TTJ 1) (CHD.)(SB) SUPPORTS TH E ASSESSEES COUNSEL ARGUMENTS. BEING SO, FOR PROPER COMPARABLES THESE THREE COMPANIES VIZ., ITEMS AT 11 , 13 ITA NOS.1004,1289/MDS./15 CO NO.86/MDS./15 M/S.SYMANTEC SOFTWARE AND SERVICES INDIA P LTD :- 6 -: AND 14 ARE TO BE INCLUDED IN THE COMPARABLES IF THE IR LOSS IS ON ACCOUNT OF NORMAL BUSINESS REASONS AND SEGMENTAL TURNOVER IS ABOVE RS. 1 CRORE. THIS VIEW OF OURS IS ALSO SUPPORTED BY THE ORDER OF THE TRIBUNAL DELHI BENCH IN THE CASE OF SAPIENT CORPORATION PVT. LTD. (15 ITR (TRIB ) 285), GENISYS INTEGRATING SYSTEMS INDIA PVT. LTD. (15 ITR (TRIB) 475) (BANGALORE BENCH) WHEREIN HELD THAT WHEN COMPANIES WHICH ARE LOSS MAKING ARE EXCLUDED FROM COMPARABLES, THEN SUPER PROFIT MAKING COMPANIES ARE ALSO TO BE EXCLUDED FROM THE COMPARABLES FOR DETERMINING THE ALP. BEING SO, IN OUR OPINION, THE ASSESSING OFFICE R HAS TO RECALCULATE THE ALP AFTER EXCLUDING ONLY THE DATA O F THE COMPANIES WHICH HAVE LOSSES DUE TO EXTRAORDINARY RE ASONS. IN OTHER WORDS, IF THERE IS LOSS IN ORDINARY COURSE OF BUSINESS WHICH IS NORMAL/NOMINAL CANNOT BE EXCLUDED FROM THE COMPARABLES. HOWEVER, WE MAKE IT CLEAR THAT IF THERE IS ANY ABNORMAL LOSS OR IF THERE IS CONTINUOUS LOSS YE AR BY YEAR, IN SUCH SITUATION THAT COMPANY DATA CANNOT BE CONSIDERED AS COMPARABLE WITH THE ASSESSEE COMPANY. FOR EXAMPLE, F.I. SOFEX LTD., VANS INFORMATION LTD. AND MUKUND ENGINEERS LTD. AND THESE COMPANIES ARE TO BE EXCLUDED FROM THE COMPARABLES. ACCORDING TO HIM, THE SAME ORDER WAS FOLLOWED BY TH E CO-ORDINATE BENCH OF MUMBAI IN THE CASE OF GOLDMAN SACHS (INDIA ) SECURITIES PVT LTD VS. ACIT., IN ITA NO.7724/MUM./2011 VIDE ORDER DATED 23.01.2013 WHEREIN OBSERVED AS FOLLOWS:- 19. AFTER HEARING BOTH THE SIDES, WE FIND THAT TP O REJECTED CAPITAL TRUST AS A COMPARABLE SIMPLY BECAU SE FOR THE TWO OUT OF THE LAST THREE YEARS TAKEN INTO ITA NOS.1004,1289/MDS./15 CO NO.86/MDS./15 M/S.SYMANTEC SOFTWARE AND SERVICES INDIA P LTD :- 7 -: CONSIDERATION, CAPITAL TRUST WAS IN THE RED AND NOT BECAUSE THE NATURE OF BUSINESS HAD ANY VARIANCE WIT H THAT OF THE ASSESSEE. WHEN WE LOOK INTO THE BUSINE SS SEGMENT OF CAPITAL TRUST, WE FIND THAT IN THE FOREI GN CONSULTANCY SEGMENT, WHICH WE ARE CONCERNED WITH, I N THE YEAR 2004-05, IT HAD OP/OC AT 27.25%. SINCE TH E NATURE OF SERVICES ARE RENDERED BY THE COMPARABLE W AS EXACTLY ON THE SIMILAR LINES, AS THAT OF THE ASSESS EE, THOUGH, DURING THE YEAR, IT WAS IN LOSS, CANNOT BE DISQUALIFIED AS NOT A LEGITMATE COMPARABLE. WE ARE WELL SUPPORTED BY THE DECISION, CITED BY THE AUTHOR IZED REPRESENTATIVE OF ASSESSEE, IN THE CASE OF BRIGADE GLOBAL (SUPRA), RELEVANT PORTION OF WHICH HAS ALREA DY BEEN REPRODUCED EARLIER IN THE ORDER, WE HOLD THAT THE ASSESSEE HAD RIGHTLY TAKEN CAPITAL TRUST AS A VALID COMPARABLE AND THE REVENUE AUTHORITIES ERRED IN EXCLUDING THE SAME. THIS ORDER OF THE MUMBAI TRIBUNAL WAS CONFIRMED BY THE MUMBAI HIGH COURT IN ITA NO.2222 OF 2013 DATED 04.04.2016. THUS , ACCORDING TO HIM, THE LOSS IN CASE OF QUINTEGRA IS NOT OPERATING LOSS, BUT ONLY BECAUSE OF NON OPERATING EXPENSES CLAIMED BY THE QU INTEGRA. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. ON CAREFUL CONSIDERATION, WE TAKE NOTE OF T HE DECISION OF ITAT BANGALORE IN THE CASE OF M/S.3DPLM SOFTWARE SOLUTIO NS LTD. VS. DCIT IN ITA NO.1303/BANGALORE/.2012 OBSERVED AS FOLLOWS: - ITA NOS.1004,1289/MDS./15 CO NO.86/MDS./15 M/S.SYMANTEC SOFTWARE AND SERVICES INDIA P LTD :- 8 -: WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED AN D CAREFULLY CONSIDERED THE MATERIAL ON RECORD. IT IS SEEN FROM THE DETAILS BROUGHT ON RECORD THAT THIS COMPAN Y I.E. QUINTEGRA SOLUTIONS LTD. IS ENGAGED IN PRODUCT ENGINEERING SERVICES AND IS NOT PURELY A SOFTWARE DEVELOPMENT SERVICE PROVIDER AS IS THE ASSESSEE IN THE CASE ON HAND. IT IS ALSO SEEN THAT THIS COMPANY IS ALSO ENGAGED IN PROPRIETARY SOFTWARE PRODUCTS AND HAS SUBSTANTIAL R&D ACTIVITY WHICH HAS RESULTED IN CREA TION OF ITS IPRS. HAVING APPLIED FOR TRADE MARK REGISTRATIO N OF ITS PRODUCTS, IT EVIDENCES THE FACT THAT THIS COMPANY O WNS INTANGIBLE ASSETS. THE CO-ORDINATE BENCH OF THIS TR IBUNAL IN THE CASE OF 2417 CUSTOMER.COM PVT. LTD. (1TA NO.227/8ANG/201O DT.9.11.2012) HAS HELD THAT IF A COMPANY POSSESSES OR OWNS 1TA NO. 5401/DEL/2012 INTANGIBLES OR IPRS, THEN IT CANNOT BE CONSIDERED A S A COMPARABLE COMPANY TO ONE THAT DOES NOT OWN INTANGIBLES AND REQUIRES TO BE OMITTED FROM THE LIS T OF COMPARABLES, AS IN THE CASE ON HAND. THE CO-ORDINATE BENCH OF DELHI TRIBUNAL IN THE CA SE OF PYRAMID IT CONSULTING P LTD, IN ITA NO.5401/DEL./12 FOR ASSESS MENT YEAR 2008-09 HAS CAREFULLY CONSIDERED THE ABOVE DECISION TAKEN IN THE CASE OF M/S.3DPLM SOFTWARE SOLUTIONS LTD.(SUPRA) 6.2 FURTHER, THE CO-ORDINATE BENCH OF CHENNAI IN T HE CASE OF M/S.KUMARAN SYSTEMS P. LTD.,CHENNAI IN ITA NO.906/M DS./15 VIDE ORDER DATED 06.01.2016 OBSERVED AS FOLLOWS:- 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. BEFORE US, LD.A.R SUBMITTED THAT THERE I S NO EXTRA ITA NOS.1004,1289/MDS./15 CO NO.86/MDS./15 M/S.SYMANTEC SOFTWARE AND SERVICES INDIA P LTD :- 9 -: ORDINARY EVENT TOOK PLACE IN THE CASE OF QUINTEGRA SOLUTIONS LTD. AND IT WAS ONLY WITH THE CASE OF SINGAPORE COM PANY. BEING SO, WE ARE INCLINED TO GIVE DIRECTION TO THE TPO TO SEE WHETHER ANY MERGER TAKEN PLACE IN THE CASE OF QUINTEGRA SOLUTIONS LTD. OR NOT. IF ANY MERGER TAK EN PLACE IN SOME OTHER SUBSIDIARY THEN, QUINTEGRA SOLU TIONS LTD., IS TO BE CONSIDERED AS A COMPARABLE CASE. ACCORDINGLY, THIS ISSUE IS REMITTED BACK TO THE TPO FOR FRESH CONSIDERATION. IN OUR OPINION, IT IS APPROPRIATE TO REMIT THE ISS UE TO THE FILE OF AO TO SEE WHETHER ANY EXTRAORDINARY EVENT TOOK PLACE IN THIS ASSESSMENT YEAR OR NOT AND ALSO TO SEE WHETHER THE LOSS IS PER SISTING CONTINUOUSLY OR NOT, DECIDE THE ISSUE ACCORDINGLY. 7. THE NEXT GROUND IN THIS APPEAL IS THAT THE DRP ERRED THE AO TO EXCLUDE TO REDUCE SAME AMOUNTS WHICH HAS REDUCED FR OM EXPORT TURNOVER FROM TOTAL TURNOVER ALSO FOR COMPUTING THE DEDUCTION U/S.10AA RELYING UPON THE DECISION OF THE SPECIAL B ENCH OF ITAT CHENNAI IN THE CASE OF M/S.SAK SOFT LTD REPORTED IN (2009) 30 SOT 55(CHENNAI)(SB) AGAINST WHICH THE DEPARMENT FILED A PPEAL U/S.260A BEFORE THE HONBLE MADRAS HIGH COURT. 8. AFTER HEARING THE LD.D.R AND PERUSING THE MATERIALS ON RECORD, IT APPEARS THAT THE LD. ASSESSING OFFICER W AS OF THE VIEW THAT SINCE THE REVENUE WAS ON APPEAL AGAINST THE DE CISION OF THE ITA NOS.1004,1289/MDS./15 CO NO.86/MDS./15 M/S.SYMANTEC SOFTWARE AND SERVICES INDIA P LTD :- 10 - : CHENNAI SPECIAL BENCH IN THE CASE OF SAK SOFT LTD., (SUPRA) BEFORE THE HONBLE MADRAS HIGH COURT, HE NEED NOT F OLLOW THAT DECISION. FURTHER, IT IS NOT THE CASE OF THE REVE NUE THAT THE JUDGMENT OF THE CHENNAI SPECIAL BENCH IN THE CASE O F SAK SOFT LTD., (SURPA) IS STAYED BY THE MADRAS HIGH COURT. I T IS PERTINENT TO MENTION THAT IN THE ABSENCE OF ANY STAY GRANTED BY THE BY THE HONBLE MADRAS HIGH COURT AGAINST THE OPERATION OF THE JUDGMENT OF THE CHENNAI SPECIAL BENCH IN THE CASE OF SAK SOF T LTD., (SURPA), ALL THE LOWER JUDICIARIES BEING QUASI JUDI CIAL AUTHORITIES ARE BOUND TO FOLLOW THE DECISION OF THE CHENNAI SPECIAL BENCH IN THE CASE OF SAK SOFT LTD., (SURPA). SINCE THE LD.CIT( A) HAS RIGHTLY FOLLOWED THE DECISION OF THE DECISION OF SAK SOFT LTD., CITED SUPRA AND HELD THE ISSUES IN FAVOUR OF THE ASSESSEE. 8.1 IN THE RESULT, THE REVENUES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. NOW COMING TO ASSESSEES APPEAL IN ITA NO.1004/MDS ./15 9. THE ASSESSEE IN THIS APPEAL HAS RAISED THE FOLL OWING GROUNDS FOR OUR ADJUDICATION. A. GENERAL 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED AO HAS ERRED IN ASSESSING THE TOTAL INCOME AT RS 1, 85,40,404/- AS AGAINST ITA NOS.1004,1289/MDS./15 CO NO.86/MDS./15 M/S.SYMANTEC SOFTWARE AND SERVICES INDIA P LTD :- 11 - : INCOME OF RS.1,12,09,519 (AS PER THE RETURN OF INCO ME FILED BY THE APPELLANT ON 29 SEPTEMBER 2010); B. REDUCTION OF DEDUCTION CLAIMED UNDER SECTION 10A A OF THE ACT 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE HONBLE DRP AND CONSEQUENTIALLY THE LEARNED AO HAS ERRED BY REDUCING ENTIRE EXPENDITURE INCURRED IN FOREIGN CURRENCY AND INSURA NCE EXPENSES FROM EXPORT TURNOVER WHILE COMPUTING DEDUCTION UNDER SECTION 1O AA OF THE ACT; 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED AO HAS ERRED IN NOT FOLLOWING THE DIRECTIONS OF HON BLE DRP CHENNAI BY NOT REDUCING THE FOREIGN CURRENCY EXPENSES (INCURRED ON TRAVELLING AND CONVEYANCE, PROFESSIONAL FEES AND COMPUTER SUPPLIES ), TELECOMMUNICATION CHARGES AND INSURANCE EXPENSES FROM TOTAL TURNOVER WHICH WERE DEDUCTED FROM EXPORT TURNOVER FOR COMPUTING DEDUCTION UNDER SECTION 1OAA OF THE ACT; C. OTHER GROUNDS OF OBJECTION 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED AO HAS ERRED IN LEVYING INTEREST UNDER SECTION 234B , SECTION 234C AND SECTION 234D OF THE ACT; 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS UNDE R SECTION 271 (1)(C) OF THE ACT WITHOUT CONSIDERING THAT THERE WAS NO CONCEALME NT OF FACTS BY THE APPELLANT BUT ADDITIONS WERE ON ACCOUNT OF RE-COMPU TATION OF DEDUCTION UNDER SECTION 1OAA OF THE ACT; 9 .1 GROUND NO.A IS GENERAL IN NATURE AND NEEDS NO A DJUDICATION. ITA NOS.1004,1289/MDS./15 CO NO.86/MDS./15 M/S.SYMANTEC SOFTWARE AND SERVICES INDIA P LTD :- 12 - : 9.2 GROUND NO.B HAS ALREADY DECIDED IN REVENUE APP EAL IN ITA NO.1289/MDS./2015 AT PARA NO.8 OF THIS ORDER. AS D ISCUSSED THEREIN, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE. 9.3. GROUND NO.4 IN TITLE C IS RELATED TO CHARGING OF INTEREST UNDER SECTION 234B, SECTION 234C AND SECTION 234D OF THE ACT. AS REGARDS GROUND NO.4, INTEREST U/S. 234B, 234C & 234D IS CON SEQUENTIAL AND MANDATORY IN NATURE AND TO BE CHARGED ACCORDINGLY 9.4 GROUND NO.5 IN TITLE C IS REGARDING INITIATION OF PENALTY U/S.271(1)(C) OF THE ACT. THE ASSESSEE CANNOT HAVE ANY GRIEVANCE AT THIS STAGE ON THIS ISSUE AS IT IS TOO PREMATURE AT THIS STAGE, THE GROUND IS DISMISSED. 10. THE ASSESSEES APPEAL IS PARTLY ALLOWED. 11. NEXT WE TAKE UP ASSESSEES C.O IN C.O NO.86/MDS./15 IN THE CROSS OBJECTION, THE ASSESSEE RAISED THE G ROUND THAT THE TRIBUNAL SHALL NOT ADMIT THE APPEAL OF THE REVENUE AS TIME BARRED. THIS ISSUE HAS ALREADY BEEN DISPOSED IN REVENUES A PPEAL. HENCE, ACCORDINGLY, THIS GROUND IS DISMISSED. 11.1 FURTHER, THE ASSESSEE HAS RAISED VARIOUS GROU NDS RELATING TO INCLUSION OR EXCLUSION OF VARIOUS COMPARABLES AND A LSO RELATING TO VARIOUS TRANSFER PRICING ADJUSTMENTS. IN OUR OPINI ON, THESE GROUNDS ITA NOS.1004,1289/MDS./15 CO NO.86/MDS./15 M/S.SYMANTEC SOFTWARE AND SERVICES INDIA P LTD :- 13 - : ARE INFRUCTUOUS IN VIEW OF OUR FINDINGS IN CORRESPO NDING REVENUES APPEAL. FURTHER, WE MAKE IT CLEAR THAT AT THIS STA GE WE DO NOT GO TO THE LEGALITY OF FILING THE CROSS OBJECTIONS BY THE ASSESSEE. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES & CROSS OBJECTIONS FILED BY AS SESSEE STANDS DISMISSED AND THE APPEAL OF ASSESSEE IS PARTLY ALLO WED ORDER PRONOUNCED ON 20 TH JULY, 2016, AT CHENNAI. SD/ - SD/ - ( . ! ) ( DUVVURU RL REDDY ) ) % / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER #$ / CHENNAI %& / DATED: 20 TH JULY, 2016 K S SUNDARAM &' ) *+ ,+ / COPY TO: 1 . -. / APPELLANT 3. / () / CIT(A) 5. +01 ) 2 / DR 2. )3-. / RESPONDENT 4. / / CIT 6. 1! 4 / GF