M/s. KPIT Cummins Infosystems Ltd, Pune V. Income-tax Officer, Ward-11(3), Pune

ITA 1510/PUN/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2643 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 12-11-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 28-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K RASTOGI
• Keywords: Business income; Depreciation; Transfer pricing; Opportunity of being heard; International transaction; Wholly owned subsidiary; Reason to believe; Unabsorbed depreciation; Reassessment proceedings
• Section: 143(3); 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1510/PN/2011 $& ' !(' / ASSESSMENT YEAR : 2007-08 KPIT CUMMINS INFOSYSTEMS LIMITED, PLOT NO. 35 & 36, RAJIV GANDHI INFOTECH PARK, HINJEWADI, PUNE-411057 PAN : AAACK7308N ....... / APPELLANT )& / V/S. INCOME TAX OFFICER, WARD 11(3), PUNE / RESPONDENT ASSESSEE BY : SHRI KISHOR PHADKE REVENUE BY : SHRI S.K. RASTOGI / DATE OF HEARING : 07-12-2015 / DATE OF PRONOUNCEMENT : 04-03-2016 * / ORDER PER VIKAS AWASTHY, JM : THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE AS SESSMENT ORDER DATED 04-10-2011 PASSED U/S. 143(3) R.W.S. 144C(1 3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE AC T) FOR THE ASSESSMENT YEAR 2007-08. 2 ITA NO. 1510/PN/2011, A.Y. 2007-08 2. THE FACTS OF THE CASE AS EMANATING FROM THE RECORDS ARE: THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF ON-SITE AND OFF-SITE SOFTWARE DEVELOPMENT. THE SERVICES PROVIDED BY ASSESSEE INCLUDE DEVELOPMENT, MAINTENANCE AND SUPPORT OF SOFTWARE APPLICATIO NS, IMPLEMENTATION OF SOFTWARE PACKAGES, SUPPLY CHAIN MANAGEME NT SOLUTIONS, DEVELOPMENT OF PC-BASED TOOLS, EMBEDDED SOFTWARE AND NETWORKING SOLUTIONS FOR AUTOMOTIVE COMPANIES, DEVELOPMENT OF BUSINESS INTELLIGENCE TOOLS, CHIP DESIGN, VERIFICATION AND TESTING FOR SEMICONDUCTOR COMPANIES, SAP IMPLEMENTATION, RISK MANAGEMEN T AND COMPLIANCE SERVICES, TRANSACTION PROCESSING, TECHNOLOGY BAS ED AND KNOWLEDGE BASED SERVICES. THE ASSESSEE HAS FOUR ASSOCIA TED ENTERPRISES BEING WHOLLY OWNED SUBSIDIARIES IN THE USA, UK AND POLAND. APART FROM THE ABOVE, THE ASSESSEE IS ALSO HAVING ASSOCIATED ENTERPRISE IN FRANCE WITH 73% HOLDING, SUBSIDIARY SOLVCENTRA L COM INC USA WITH 90% HOLDING, KPIT INFOSYSTEMS LIMITED UK HOLDING C OMPANY FOR KPIT INFOSYSTEMS GMBH, GERMANY WITH 60% HOLDING. THUS , IN ALL THE ASSESSEE COMPANY IS HAVING 7 ASSOCIATED ENTERPRISES . DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL, T HE ASSESSEE HAD UNDERTAKEN VARIOUS INTERNATIONAL TRANSACTIONS WHICH INTER ALIA INCLUDE INTEREST RECEIVED ON LOANS. DURING THE PERIOD UNDER CONS IDERATION THE ASSESSEE GRANTED LOAN OF POLISH ZLOTY (PLN) 10,00,000 EQUIVALE NT TO ` 1,48,60,000/- TO ITS 100% SUBSIDIARY, KPIT INFOSYSTEMS CENT RAL EUROPE SP. Z.O.O., POLAND. ON THE SAID LOAN, THE ASSESSEE CH ARGED INTEREST OF ` 1,83,793/- @ 5.47% AT WARSAW INTERBANK OFFER RATE (WIBOR) (4.47%) + 1%. THE INTERNATIONAL TRANSACTION WAS BENCHMARKED BY ASSESSEE FOLLOWING COMPARABLE UNCONTROLLED PRICE (CUP) METHOD. THE TRANSFER PRICING OFFICER (TPO) HELD THAT T HE LOAN GIVEN BY ASSESSEE TO ITS AE IN PLN IS NOT A FOREIGN CURRE NCY DEMAND 3 ITA NO. 1510/PN/2011, A.Y. 2007-08 DEPOSIT, BECAUSE THE LOAN GIVEN TO AE IS IN PLN WHICH IS LOC AL CURRENCY OF POLAND. THUS, FOR THE AE THE LOAN IS NOT IN A FOREIGN CUR RENCY. THE TPO FURTHER OBSERVED THAT THE AE CANNOT BE EQUATED W ITH NATIONAL BANK OF POLAND IN SO FAR AS CREDIBILITY IS CONCERNED. ACCORD INGLY, THE TPO REJECTED THE BENCHMARKING ADOPTED BY THE ASSESSE E. THE TPO FOR BENCHMARKING THE TRANSACTION, PROPOSED TO ADOPT CUP ME THOD AT BANKING PRIME LENDING RATE (BPLR) OF STATE BANK OF INDIA (S BI) @ 12.25%, THE RATE AS WAS APPLICABLE ON 31-03-2007. THE AS SESSEE RAISED OBJECTION TO THE BPLR PROPOSED BY THE TPO FOR B ENCHMARKING THE TRANSACTION. THE TPO REJECTED THE CONTENTIONS OF T HE ASSESSEE AND COMPUTED THE ARMS LENGTH PRICE (ALP) BY CONSIDERING THE RATE OF BPLR (12.25%) AS THE BENCHMARK RATE AND MADE AN ADJUSTMENT OF ` 2,27,807/- IN RESPECT OF INTERNATIONAL TRANSACTION TOWARDS INTEREST RECEIVABLE FROM ITS AE. 3. DURING THE YEAR, THE ASSESSEE HAD DECLARED TURNOVE R OF ` 315.78 CRORES. THE ASSESSEE FILED ITS RETURN OF INCOME ON 30-10- 2007 DECLARING TOTAL INCOME AS NIL, AFTER CLAIMING THE BENEFIT OF D EDUCTION U/S. 10A ON THE ELIGIBLE STP UNITS. THE ASSESSEE COMPUTED DEDUCTION BEFORE SETTING OFF THE PROFITS OF THE ELIGIBLE UNITS WITH THE LO SSES OF OTHER ELIGIBLE /NON-ELIGIBLE UNITS AND THE BROUGHT FORWARD LOSSES FRO M ASSESSMENT YEAR 2005-06. THE ASSESSING OFFICER IN DRAFT ASSESSMENT ORDER DATED 21-10-2010 DISALLOWED THE CLAIM OF DEDUCTION U /S. 10A. THE ASSESSING OFFICER FOLLOWING HIS EARLIER ORDER IN ASSESSMENT YEAR 2005-06 REJECTED THE CLAIM OF THE ASSESSEE. AGGRIEVED, BY THE ORDER OF TPO AND DISALLOWANCE OF DEDUCT ION U/S. 10A IN THE DRAFT ASSESSMENT ORDER, THE ASSESSEE FILED OBJECTIONS BEFORE THE DISPUTE RESOLUTION PANEL (DRP). THE DRP REJECT ED THE 4 ITA NO. 1510/PN/2011, A.Y. 2007-08 OBJECTIONS OF THE ASSESSEE AND UPHELD THE FINDINGS OF TPO AND THE ASSESSING OFFICER. ON THE BASIS OF DIRECTIONS OF DRP DATED 0 3-08-2011, THE ASSESSING OFFICER MADE ADDITIONS IN THE INCOME RETURNED BY THE ASSESSEE VIDE ASSESSMENT ORDER DATED 04-10-2011. AGA INST THE ASSESSMENT ORDER, THE ASSESSEE HAS FILED PRESENT APPEAL. 4. IN GROUNDS OF APPEAL THE ASSESSEE HAS RAISED 8 GRO UNDS ASSAILING THE FINDINGS OF DRP AND ASSESSING OFFICER. SHRI KISHOR PHADK E APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUT SET THAT HE WOULD NOT BE PRESSING GROUND NOS. 2, 4 AND 7 RAISED IN TH E GROUNDS OF APPEAL. THUS, IN VIEW OF THE STATEMENT MADE BY THE LD. AR OF THE ASSESSEE AT BAR, GROUND NOS. 2, 4 AND 7 ARE DISMISSED AS NOT PRESSED. 5. THE OTHER GROUNDS RAISED IN THE APPEAL IN THE GROUND S OF APPEAL ARE AS UNDER: 1. THE LEARNED DISPUTE RESOLUTION PANEL (DRP), TRAN SFER PRICING OFFICER (TPO) AND THE INCOME-TAX OFFICER, WARD 11(3 ) (I.E. ITO) ERRED IN LAW AND ON FACTS IN DECIDING THE TAXABLE INCOME OF THE APPELLANT AT RS.7,69,28,572/- INSTEAD OF RS. NIL AS RETURNED BY THE APPELLANT. 3. THE DRP & THE TPO ERRED IN LAW AND ON FACTS IN M AKING ADDITION OF RS.2,27,809/- TO THE TRANSFER PRICE OF THE INTERNATIONAL TRANSACTION OF 'CHARGE OF INTEREST' WITHOUT APPRECIATING THE FACTS OF THE CASE AND BUSINESS PRUDENCE. 5. THE DRP & THE AO ERRED IN LAW AND ON FACTS IN RE STRICTING DEDUCTION U/S 10A OF THE ITA, 1961 AT RS.39,62,57,1 26/- INSTEAD OF RS.40,25,98,771/- AS CLAIMED BY THE APPELLANT. 6. THE DRP & THE ITO ERRED IN LAW IN HOLDING THAT T HE DEDUCTION U/S 10A SHOULD BE COMPUTED AT UNIT / UNDERTAKING LEVEL BUT SHOULD BE ALLOWED ONLY AFTER SET-OFF OF LOSSES OF OTHER BUSIN ESS UNITS / UNDERTAKINGS. 5 ITA NO. 1510/PN/2011, A.Y. 2007-08 8. THE APPELLANT CRAVES TO ADD/ MODIFY/ ALTER/ DELE TE ALL/ ANY OF THE GROUNDS OF APPEAL. 6. THE LD. AR SUBMITTED THAT IN GROUND NO. 3, THE ONLY ISS UE IS, WHETHER THE RATE OF INTEREST TO BE ADOPTED IS BPLR OF S BI OR WIBOR + 1% FOR BENCHMARKING THE TRANSACTION? THE LD. AR IN SUPPO RT OF HIS CLAIM REITERATED THE SUBMISSIONS MADE BEFORE THE TPO AND DRP. FURTHER, THE LD. AR TO STRENGTHEN HIS SUBMISSIONS PLACED R ELIANCE ON THE DECISION RENDERED BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. TATA AUTOCOMP SYSTEMS LT D. REPORTED AS 276 CTR 481 (BOM) AND THE DECISION OF MUMBAI BENCH O F THE TRIBUNAL IN THE CASE OF DEPUTY COMMISSIONER OF INCOME TAX VS. TECH MAHINDRA LTD. REPORTED AS 46 SOT 141 (MUMBAI)(URO). THE LD. AR ALSO PLACED RELIANCE ON THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF VARROC ENGINEERING PVT. LTD. VS. THE ASSTT. CO MMISSIONER OF INCOME TAX IN ITA NO. 2482/PN/2012 FOR THE ASSESSMENT YEAR 2008-09 DECIDED ON 30-12-2014. THE LD. AR SUBMITTED THAT THE CO -ORDINATE BENCH OF THE TRIBUNAL AFTER CONSIDERING SEVERAL DECISIONS INC LUDING THE DECISION RENDERED IN THE CASE OF DEPUTY COMMISSIONER OF I NCOME TAX VS. TECH MAHINDRA LTD. (SUPRA) HAS HELD THAT WHERE THE T RANSACTION IS BETWEEN THE ASSESSEE AND ITS ASSOCIATED ENTERPRISE IN FO REIGN CURRENCY THEN THE SAME HAD TO BE LOOKED INTO BY APPLYING COMMER CIAL PRINCIPLE IN REGARD TO INTERNATIONAL TRANSACTIONS. 7. IN RESPECT OF GROUNDS OF APPEAL NO. 5 AND 6, THE LD. AR SUBMITTED THAT THE SIMILAR ISSUE HAD COME UP BEFORE THE CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEARS 200 5-06 AND 2006-07. THE TRIBUNAL IN ITA NOS. 1508 & 1509/PN/2011 V IDE ORDER DATED 30-11-2015 HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE 6 ITA NO. 1510/PN/2011, A.Y. 2007-08 LD. AR PLACED ON RECORD A COPY OF THE TRIBUNAL ORDER IN I TA NOS. 1508 & 1509/PN/2011 (SUPRA). 8. ON THE OTHER HAND SHRI S.K. RASTOGI REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF DRP AND ASSESSING OFFICER. 9. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. IN THE PRESENT APPEAL THE FIRST ISSUE BEFORE US IS WITH RESPECT T O INTERNATIONAL TRANSACTION ARISING FROM INTEREST CHARGED ON THE LOAN AD VANCED BY THE ASSESSEE TO ITS AE. THE ASSESSEE HAS CHARGED INTEREST AT WIBOR + 1%, WHEREAS, THE TPO HAD ADOPTED BPLR OF SBI FOR BENCHMARK ING THE TRANSACTION. THE OBJECTIONS RAISED BY THE ASSESSEE AGA INST ADOPTING BPLR ARE AS UNDER: BPLR OR THE LENDING RATES WOULD NOT BE CORRECT IND ICATIVE FACTORS FOR THE DETERMINATION OF THE CHARGE OF INTEREST ON ADVANCE TO THE SUBSIDIARY ON ACCOUNT OF THE FOLLOWING REASONS :- THE ASSESSES COMPANY IS NEITHER A BANKER LENDING MO NEY FOR EARNING INTEREST NOR HAS INTEREST COST FOR THESE FU NDS, SINCE THE ADVANCE HAS BEEN GRANTED OUT OF ACCRUAL AND IS IN T HE NORMAL COURSE OF ITS BUSINESS. THE BORROWING COMPANY, I.E. AE IS NOT LOCATED IN IN DIA AND HAS ITS OPERATIONS IN POLAND. IN TERMS OF THE DEEMED OPPORTUNITY COSTS THE BETTER RELEVANT COMPARATIVE RATE WOULD BE THE ''FIXED DEPOSIT RATE' WITH THE BANK THAT THE ASSESSEE COMPANY COULD OTHERWISE EARN ON T HESE FUNDS. THE LD. AR FURTHER POINTED THAT DUE TO FREQUENT CHANGING OF THE BPLR BY ALL THE BANKS, THE PREVALENT BPLR OF ALL THE INDIAN BANKS ARE NOT READILY AVAILABLE IN THE PUBLIC DOMAIN OR ANY STATISTICAL DATABASE. POLAND BEING MEMBER OF EUROPEAN UNION, THE MORE APPROPRIA TE RATE FOR 7 ITA NO. 1510/PN/2011, A.Y. 2007-08 COMPARISON WOULD BE THE RFC RATES FOR EUROS. THE AVERA GE RFC RATES FOR EUROS BEING 2.80% AND THE HIGHEST RATE FOR 3 YEARS A ND ABOVE BEING 3.30% ONLY, THE RATE OF 5.47% CHARGED BY THE ASSESSEE C OMPANY TO ITS SUBSIDIARY IN POLAND IS JUSTIFIED. 10. WE FIND THAT THE SIMILAR ISSUE HAD COME UP BEFORE THE CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF VARROC ENGIN EERING PVT. LTD. VS. THE ASSTT. COMMISSIONER OF INCOME TAX (SUPRA). IN THE SAID CASE THE ASSESSEE HAD BENCHMARKED ITS INTERNATIONAL TRA NSACTION RELATING TO INTEREST RATE CHARGED AT INTERNATIONAL RATE. THE BENCHMARKING WAS ADOPTING AT FOREIGN CURRENCY CITY BANK RATES. THE TPO REJECTED THE BENCHMARKING MADE BY THE ASSESSEE A ND ADOPTED THE BPLR. THE CO-ORDINATE BENCH DECIDED THE ISSUE BY OBSERVING AS UND ER: 13. DURING THE YEAR UNDER CONSIDERATION, INTEREST OF RS.2,91,82,060/- HAD ACCRUED AS INTEREST ON LOAN GRANTED TO ITS ASSO CIATED ENTERPRISES. THE ASSESSEE HAD GRANTED LOAN TO M/S. VARROC EUROPE AN HOLDING BV NETHERLANDS EURO 1,00,00,000 AND REPAYMENT OF LOAN OF EURO 5,00,000, HENCE DURING THE YEAR, THE EFFECTIVE LOAN AMOUNTED TO EURO 96,30,000 WHICH WAS EQUIVALENT TO RS.55,21,57,400/-. THE ASS ESSEE HAD CHARGED INTEREST @ 4.75% PER ANNUM. AS PER THE TPO, THE RA TE PREVAILING AS PER LIBOR +, FOR THE YEAR ENDING 31.03.2008 WAS 6.79%. THE TPO TABULATED THE TRANSACTIONS OF GRANTING OF LOAN AND THE INTERE ST CHARGED BY THE ASSESSEE AND COMPUTED THE PROPOSED ADJUSTMENT AS UN DER:- (AMT. IN RS.) DESCRIPTION VARROC EUROPEAN HOLDING BV NETHERLANDS [A] LOAN ADVANCED / BALANCE OF LOAN AT THE YEAR ENDING 31.03.2008 RS.59.43 CRS. (FIGURES AS PER THE FINANCIALS) [B] BASE CHARGE ADOPTED BY THE ASSESSEE LIBOR [C] BASE CHARGE ADOPTED BY THE ASSESSEE TO BENCHMARK THE TRANSACTION HOWEVER, RATE CHARGED BY THE ASSESSEE = 4.75% 8 ITA NO. 1510/PN/2011, A.Y. 2007-08 [D] BANK PRIME LENDING RATE (BPLR) OF SBI AS ON 31.03.2008 12.25% [E] RATE CHARGED BY THE ASSESSEE 4.75% [F] INTEREST CHARGED BY THE ASSESSEE RS.2,86,27,089 [G] THE RATE PREVAILING AS PER 6 MONTHS LIBOR FOR THE YEAR ENDED 31.03.2008 WAS 6.79% RS.4,03,52,970 [H] INTEREST @ 12.25% AS PER BPLR OF SBI RS.7,28,00 ,000 [I] DIFFERENCE IN BPLR AND ASSESSEES AMOUNT RS.4,41,74,661 [J] PROPOSED ADJUSTMENT RS.4,41,74,661 14. THE ASSESSEE HAD BENCHMARKED ITS INTERNATIONAL TRANSACTIONS TAKING THE INTEREST RATE CHARGED AT INTERNATIONAL R ATES OF THE DISBURSING BANK I.E. CITI BANK. HOWEVER, THE TPO WAS OF THE V IEW THAT LOAN GIVEN TO THE ASSOCIATED ENTERPRISES IN THE CURRENCY OF THAT COUNTRY WAS NOT A FOREIGN CURRENCY DEPOSIT WITH ASSOCIATED ENTERPRISE S. ON THE OTHER HAND, THE ASSESSEE HAD BORROWED THE MONEY ON BANKING PRIM E LENDING RATES AND WAS SHOW CAUSED BY THE TPO AS TO WHY LENDING RA TE FOR THE PURPOSE OF COMPARABILITY FOLLOWING CUP METHOD SHOULD NOT BE TAKEN. THE TPO IN VIEW OF THE RELATED DISCUSSION FOUND THAT THE ARM'S LENGTH PRICE COMPUTED BY THE ASSESSEE IN RESPECT OF THE INTERNATIONAL TRA NSACTIONS RELATING TO PROVISION OF INTEREST, WAS NOT ACCEPTABLE. THE VIE W OF THE TPO WAS THAT IN NORMAL CIRCUMSTANCES WHERE ANY ADVANCE HAD TO BE GIVEN TO ANY UNRELATED ENTITY, THEN THE RATE OF INTEREST CHARGEA BLE WOULD BE HIGHER THAN THE BPLR. SINCE THE HIGHER RATE OF INTEREST M ORE THAN BPLR WAS NEITHER ASCERTAINABLE NOR DETERMINABLE, THE TPO CON SIDERED IT SUITABLE TO BENCHMARK THE INTERNATIONAL TRANSACTIONS WITH BENCH MARK OF INTEREST TAKEN AS BPLR. ACCORDINGLY, RATE OF 12.25% I.E. TH E BPLR OF THE SBI WAS TAKEN AS BENCHMARK RATE AND THE DIFFERENTIAL QUANTU M OF INTEREST ON THE LOAN ADVANCED TO THE SUBSIDIARIES, AMOUNTING TO RS. 4,41,74,661/- WAS ADDED TO THE VALUE OF INTERNATIONAL TRANSACTIONS TO ARRIVE AT THE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS. TH E TPO DIS-REGARDED THE LIBOR+ RATE OF 6.75% AS NOT THE BENCHMARK APPLIED B Y THE ASSESSEE AS ACCORDING TO THAT RATE, THE INTEREST SHOULD HAVE BE EN CHARGED AT RS.4,03,52,970/- WHEREAS IT HAD ONLY CHARGED RS.2,8 6,27,089/-. IN 9 ITA NO. 1510/PN/2011, A.Y. 2007-08 VIEW THEREOF, AN ADJUSTMENT OF RS.4,41,74,661/- WAS MADE IN THE HANDS OF THE ASSESSEE. THE SAID ORDER OF TPO HAS BEEN UP HELD BY DRP. 15. IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD ADVANCED MONEY IN THE FORM OF SHARE APPLICATION MONEY WHICH WERE LATER CONVERTED INTO LOAN ON THE ADVICE OF EUROPEAN CONSULTANTS. O N SUCH ADVANCE MADE TO ITS ASSOCIATED ENTERPRISES, THE ASSESSEE HAD CHA RGED INTEREST @ 4.75%. WHILE BENCHMARKING THE INTERNATIONAL TRANSACTIONS W HAT HAS TO BE SEEN IS THE COMPARISON BETWEEN RELATED TRANSACTIONS I.E. WHERE THE ASSESSEE HAS ADVANCED MONEY TO ITS ASSOCIATED ENTERPRISES AN D CHARGED INTEREST THEN THE SAID TRANSACTION IS TO BE COMPARED WITH A TRANSACTION AS TO WHAT RATE THE ASSESSEE WOULD HAVE CHARGED, IF IT HAD EXT ENDED THE LOAN TO THE THIRD PARTY IN FOREIGN COUNTRY. ONCE THERE IS A TR ANSACTION BETWEEN THE ASSESSEE AND ITS ASSOCIATED ENTERPRISES IN FOREIGN CURRENCY, THEN THE TRANSACTION WOULD HAVE TO BE LOOKED UPON BY APPLYIN G THE COMMERCIAL PRINCIPLES WITH REGARD TO THE INTERNATIONAL TRANSAC TIONS. IN THAT CASE, THE INTERNATIONAL RATES FIXED BEING LIBOR+ RATES WOULD HAVE AN APPLICATION AND THE DOMESTIC PRIME LENDING RATES WOULD NOT BE A PPLICABLE. THE ASSESSEE HAS FURTHER EXPLAINED THAT IT HAD RAISED T HE LOAN FROM CITI BANK ON INTERNATIONAL RATES FOR THE PURPOSE OF INVESTMEN T IN THE SHARE APPLICATION MONEY OF ITS ASSOCIATED ENTERPRISES, WH ICH IN TURN WAS PARTLY CONVERTED FROM CAPITAL INTO LOAN. WHERE THE ASSESS EE HAD A COMPARABLE OF BORROWING LOAN ON INTERNATIONAL RATES AND ADVANC ING TO ITS ASSOCIATED ENTERPRISES, THEN THE SAID COMPARABLE WAS TO BE APP LIED FOR BENCHMARKING THE TRANSACTION OF ADVANCING THE LOAN ON INTEREST TO ITS ASSOCIATED ENTERPRISES. THE ASSESSEE HAD CHARGED I NTEREST RATE OF 4.75% ON THE LOAN ADVANCED TO THE ASSOCIATED ENTERPRISES. THE ASSESSEE ON THE OTHER HAND, CLAIMS THAT IT HAD BORROWED THE MONEY O N LIBOR+ RATES I.E. INTERNATIONAL RATES, WHICH WERE JAPANES BASED LIBOR + RATES WHICH WERE LOWER THAN THE US BASED LIBOR+ RATES. THE PLEA OF THE ASSESSEE BEFORE US WAS THAT IT HAD ADVANCED THE LOAN TO ITS ASSOCIA TED ENTERPRISES ON LIBOR+ RATES I.E. 4.75%. IN THE TOTALITY OF THE FA CTS AND CIRCUMSTANCES WHERE THE ASSESSEE HAS THE INTERNAL CUP OF OPERATIN G AT INTERNATIONAL RATES AVAILABLE AND SINCE THE SAID LOAN RAISED BY T HE ASSESSEE AT INTERNATIONAL RATES WAS ADVANCED TO ITS ASSOCIATED ENTERPRISES, WE FIND NO MERIT IN THE ORDER OF THE TPO IN APPLYING THE DO MESTIC LOAN RATES I.E. BPLR RATES FOR BENCHMARKING TRANSACTION OF CHARGING OF INTEREST ON THE LOANS ADVANCED TO THE ASSOCIATED ENTERPRISES BY THE ASSESSEE. WHERE THE ASSESSEE HAD MADE THE BORROWINGS ON LIBOR+ RATE S AND ADVANCED THE SAME AT LIBOR+ RATES, THEN THE SAID TRANSACTION IS AT ARM'S LENGTH PRICE AND THERE IS NO MERIT IN ANY ADJUSTMENT TO BE MADE ON THIS ACCOUNT . 10 ITA NO. 1510/PN/2011, A.Y. 2007-08 16. THE CHENNAI BENCH OF THE TRIBUNAL IN M/S. SIVA INDUSTRIES & HOLDINGS LIMITED VS. ACIT, CHENNAI (2012) 26 TAXMANN .COM 96 (CHENNAI) HAD HELD AS UNDER:- THE ASSESSEE HAD GIVEN THE LOAN TO THE ASSOCIATED ENTERPRISES IN US DOLLARS, AND ASSESSEE WAS ALSO RECEIVING INTERES T FROM THE ASSOCIATED ENTERPRISES IN INDIAN RUPEES. ONCE THE TRANSACTION BETWEEN THE ASSESSEE AND THE ASSOCIATED ENTERPRISES WAS IN FOREIGN CURRENCY AND THE TRANSACTION WAS AN INTERNA TIONAL TRANSACTIONS, THEN THE TRANSACTION WOULD HAVE TO BE LOOKED UPON THE APPLYING THE COMMERCIAL PRINCIPLES IN REGARD TO INTERNATIONAL TRANSACTIONS. IF THAT WAS SO, THEN THE DOMESTIC PR IME LENDING THE RATE WOULD HAVE NO APPLICABILITY AND THE INTERNATIO NAL RATE FIXED BEING LIBOR WOULD COME INTO PLAY. IN THE CIRCUMSTA NCES, THE VIEW THAT LIBOR RATE HAD TO BE CONSIDERED WHILE DETERMIN ING THE ARM'S LENGTH PRICE INTEREST RATE IN RESPECT OF THE TRANSA CTION BETWEEN THE ASSESSEE AND THE ASSOCIATED ENTERPRISES WAS TO BE U PHELD. AS IT WAS NOTICED THAT THE AVERAGE OF THE LIBOR RATE FOR 1-4-2005 TO 31- 3-2006 IS 4.42 PER CENT AND THE ASSESSEE HAD CHARGE D INTEREST AT 6 PER CENT WHICH WAS HIGHER THAN THE LIBOR RATE, NO ADDITION ON THIS ACCOUNT WAS LIABLE TO BE MADE IN THE HANDS OF THE ASSESSEE. IN THE CIRCUMSTANCES, THE ADDITION MADE BY THE ASSE SSING OFFICER ON THIS COUNT WAS DELETED. 17. THE MUMBAI BENCH OF THE TRIBUNAL IN DCIT VS. TE CH MAHINDRA LTD. (2011) 12 TAXMANN.COM 132 (MUM.) HELD THAT WHERE TH ERE IS A CHOICE BETWEEN THE INTEREST RATE OF CURRENCY OTHER THAN TH E CURRENCY IN WHICH TRANSACTION HAD TAKEN PLACE AND THE INTEREST RATE I N RESPECT OF THE CURRENCY IN WHICH TRANSACTION HAS TAKEN PLACE, THE LATTER SHOULD BE ADOPTED. WHERE THE TRANSACTION IS BETWEEN THE ASSE SSEE AND ITS ASSOCIATED ENTERPRISES IN FOREIGN CURRENCY AND THE TRANSACTION IS INTERNATIONAL TRANSACTION, THEN THE TRANSACTION WOU LD HAVE TO BE LOOKED UPON BY APPLYING COMMERCIAL PRINCIPLES IN REGARD TO INTERNATIONAL TRANSACTIONS. 18. SIMILAR PRINCIPLE HAS BEEN LAID DOWN BY THE MUMB AI BENCH OF THE TRIBUNAL IN HINDUJA GLOBAL SOLUTIONS LTD. VS. ACIT (2013) 35 TAXMANN.COM 348 (MUMBAI TRIB.). 19. IN THE ENTIRETY OF THE ABOVE FACTS AND CIRCUMST ANCES, WE HOLD THAT WHERE THE ASSESSEE HAD ENTERED INTO A TRANSACTION W ITH ITS ASSOCIATED ENTERPRISES IN FOREIGN CURRENCY, AND THE TRANSACTIO NS WERE INTERNATIONAL TRANSACTIONS, THEN THE SAME HAD TO BE LOOKED INTO B Y APPLYING 11 ITA NO. 1510/PN/2011, A.Y. 2007-08 COMMERCIAL PRINCIPLE IN REGARD TO INTERNATIONAL TRA NSACTIONS. IN THE FACTS OF PRESENT CASE, THE ASSESSEE HAD BORROWED THE LOAN FROM CITI BANK AND ADVANCED THE SAME ON LIBOR+ RATES TO ITS ASSOCIATED ENTERPRISES, THEN THE SAID TRANSACTION WITH ITS ASSOCIATED ENTERPRISE S IS WITHIN ARM'S LENGTH PRICE. THE TPO / AO THUS, DIRECTED TO RE-COMPUTE T HE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS. ANOTHER ASPECT TO BE KEPT IN MIND IS THE PLEA OF THE ASSESSEE WITH REGARD TO THE INTERES T RECEIVABLE. THE ASSESSEE HAD ALSO RAISED THE ISSUE THAT THE TPO HAD ADOPTED THE INTEREST RECEIVABLE FROM ASSOCIATED ENTERPRISE COMPANY AT RS .2,86,27,089/- INSTEAD OF RS.2,91,82,060/- WHICH IS DISCLOSED IN T HE AUDIT REPORT IN FORM NO.3CEB. THE ASSESSING OFFICER IS ALSO DIRECT ED TO VERIFY THE CLAIM OF THE ASSESSEE IN THIS REGARD AND COMPUTE THE ARM' S LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS. REASONABLE OPPORTUNITY OF BEING HEARD SHALL BE AFFORDED TO THE ASSESSEE BY THE ASSESSING OFFICE R / TRANSFER PRICING OFFICER. THE GROUNDS OF APPEAL NOS.1 AND 2 RAISED BY THE ASSESSEE ARE THUS, ALLOWED AS INDICATED ABOVE. 11. IN VIEW OF THE FACTS OF THE CASE AND THE DECISION OF C O-ORDINATE BENCH OF THE TRIBUNAL, WE HOLD THAT THE DRP HAS ERRED IN CONFIRMING THE FINDINGS OF THE TPO IN ADOPTING BPLR RATES. THE TPO IS DIRECTED TO RECOMPUTE THE INTEREST RATE BY ADOPTING WIBOR + 1% IN RESPECT OF THE INTERNATIONAL TRANSACTION UNDER APPEAL. ACCORDINGLY, GRO UND NO. 3 RAISED IN THE APPEAL IS ALLOWED. 12. THE SECOND ISSUE RAISED IN THE PRESENT APPEAL IS WITH RESPECT TO CLAIM OF DEDUCTION U/S. 10A OF THE ACT. WE FIND THAT IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2005-06 AND 2006-07. THE TRIBUNAL DE CIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE RELEVANT EXTRACT O F THE ORDER OF THE TRIBUNAL IN ITA NOS. 1508 & 1509/PN/2011 (SUPRA) IS AS UNDER: 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE RECORD. THE ASSESSEE IS ENGAGED IN EXPORT OF SOFTWARE AND IT EN ABLED SERVICES. DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE WA S RUNNING EIGHT UNITS AT DIFFERENT PLACES AND FIVE OF WHICH UNITS H AD DECLARED POSITIVE 12 ITA NO. 1510/PN/2011, A.Y. 2007-08 PROFITS AND THE BALANCE THREE UNITS DECLARED LOSSES FOR THE CAPTIONED ASSESSMENT YEAR. THE ASSESSEE WAS ENTITLED TO CLAI M DEDUCTION U/S. 10A OF THE ACT IN RESPECT OF EXPORT OF SOFTWARE. T HE ASSESSEE COMPUTED THE DEDUCTION U/S. 10A OF THE ACT BY TREATING EACH OF THE UNIT AS SEPARATE UNIT/UNDERTAKING AND CLAIMED THE DEDUCTION AT RS.24 ,55,53,914/-. THE LOSSES FROM THREE UNITS AGGREGATING RS.4,55,31,667/ - WAS CARRIED FORWARD TO BE ADJUSTED IN THE SUCCEEDING YEARS. ON THE OTHER HAND THE REVENUE AUTHORITIES WERE OF THE VIEW THAT THE LOSSE S EARNED BY THE ASSESSEE FROM SEPARATE UNIT HAVE TO BE ADJUSTED AGA INST THE PROFITS EARNED BY THE ASSESSEE IN SEPARATE UNITS AND AFTER MAKING THIS INTRA- HEAD SET OFF, THE DEDUCTION UNDER SECTION 10A OF TH E ACT WERE TO BE ALLOWED TO THE ASSESSEE. IN THIS EXERCISE THE DEDU CTION UNDER SECTION 10A OF THE ACT WAS REDUCED TO RS.20,68,49,064/- AND THERE WERE NIL CARRY FORWARD LOSS IN THE HANDS OF THE ASSESSEE. T HE REASON FOR THE SAID ADJUSTMENT BY THE ASSESSING OFFICER AND COMMISSIONE R OF INCOME TAX (APPEALS) WAS ON THE SURMISE THAT THE AMENDMENT BRO UGHT TO SECTION 10A OF THE ACT W.E.F. 1 ST APRIL, 2001 UNDER WHICH DEDUCTION FROM INCOME WAS TO BE ALLOWED TO THE ASSESSEE AND NOT ANY EXEMPTION . FURTHER, THE ASSESSING OFFICER REFERRED TO THE PROVISIONS OF SEC TION 70(1) AND OBSERVED THAT THE INTRA-HEAD ADJUSTMENT HAD TO BE MADE BEFOR E CLAIMING THE DEDUCTION U/S. 10A OF THE ACT. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER OF ASSESSING OFFICER, WHICH HAS BEEN UPH ELD BY THE COMMISSIONER OF INCOME TAX (APPEALS). 13. UNDOUBTEDLY, AFTER THE AMENDMENT W.E.F. 1 ST APRIL, 2001 UNDER THE PROVISIONS OF SECTION 10A OF THE ACT, THE ASSESSEE IS NOW ENTITLED TO DEDUCTION. PRIOR TO THE AMENDMENT THE ASSESSEE WAS ENTITLED TO EXEMPTION OF THE SAID INCOME. IN OTHER WORDS THE S AID INCOME DID NOT FORM PART OF THE TOTAL INCOME AND WAS EXCLUDED AT T HE ENTITY LEVEL ITSELF. THE QUESTION WHICH ARISES FOR ADJUDICATION IS WHETH ER IN VIEW OF THE AMENDED PROVISIONS OF SECTION 10A OF THE ACT, UNDER WHICH DEDUCTION CAN BE CLAIMED BY AN ENTERPRISES, WHETHER THE INTRA HEA D ADJUSTMENT OF LOSSES OF CERTAIN UNITS IS TO BE MADE AGAINST THE P ROFITS OF OTHER UNITS OF THE SAME ASSESSEE, BEFORE COMPUTING THE DEDUCTION U NDER SECTION 10A OF THE ACT. 14. THE HON'BLE BOMBAY HIGH COURT IN HINDUSTAN UNIL EVER LTD. VS. DCIT & ANR. (SUPRA) IN AN APPEAL RELATING TO ASSESS MENT YEAR 2004-05 WHERE REASSESSMENT PROCEEDINGS WERE INITIATED UNDER SECTION 147/148 OF THE ACT ON SEVERAL ISSUES, CONSIDERED THE REASON TO BELIEVE RECORDED BY THE ASSESSING OFFICER WITH REGARD TO SET OFF OF LOS S INCURRED BY UNIT ELIGIBLE FOR DEDUCTION U/S. 10B OF THE ACT. THE AS SESSING OFFICER HAD 13 ITA NO. 1510/PN/2011, A.Y. 2007-08 REOPENED THE ASSESSMENT ON THE SURMISE THAT SINCE T HE INCOME OF THE CRAB STICK UNIT WAS EXEMPTED FROM TAX UNDER SECTION 10B, THE LOSS OF THAT UNIT WAS WRONGLY SET OFF AGAINST THE NORMAL BU SINESS INCOME. THE HON'BLE HIGH COURT NOTED THAT AFTER THE SUBSTITUTIO N OF SECTION 10B OF THE ACT BY THE FINANCE ACT OF 2000, THE PROVISIONS PROV IDED FOR DEDUCTION OF SUCH PROFIT OR GAINS AS WERE DERIVED BY 100% EOU FO R THE PERIOD PRESCRIBED UNDER THAT SECTION. THE HON'BLE HIGH CO URT THUS HELD THAT THE BASIS ON WHICH THE ASSESSMENT WAS SOUGHT TO BE REOP ENED WAS BELIED BY A PLAIN READING OF THE PROVISIONS AND THE ASSESS ING OFFICER WAS IN ERROR IN PROCEEDING ON THE BASIS THAT BECAUSE THE I NCOME WAS EXEMPTED, THE LOSS WAS NOT ALLOWABLE. THE HON'BLE HIGH COURT FURTHER CONSIDERED THAT ALL THE FOUR UNITS OF THE ASSESSEE WERE ELIGIB LE UNDER SECTION 10B, OUT OF WHICH THREE UNITS HAD RETURNED PROFITS DURIN G THE COURSE OF THE ASSESSMENT YEAR, WHILE THE CRAB STICK UNIT HAD RETU RNED A LOSS. THE HIGH COURT FURTHER HELD THAT THE ASSESSEE WAS ENTI TLED TO A DEDUCTION IN RESPECT OF THE PROFITS OF THE THREE ELIGIBLE UNITS WHILE THE LOSS SUSTAINED BY THE FOURTH UNIT COULD BE SET OFF AGAINST THE NOR MAL BUSINESS INCOME. IN THESE CIRCUMSTANCES, THE HON'BLE HIGH COURT HELD THAT THE BASIS ON WHICH THE ASSESSMENT WAS SOUGHT TO BE REOPENED WAS CONTRARY TO THE PLAIN LANGUAGE OF SECTION 10B. 15. THE HON'BLE BOMBAY HIGH COURT IN CIT VS. BLACK & VEATCH CONSULTING PVT. LTD. (SUPRA) ALSO OBSERVED THAT SEC TION 10A WAS A PROVISION WHICH WAS IN THE NATURE OF A DEDUCTION A ND NOT AN EXEMPTION. THE HON'BLE HIGH COURT FURTHER HELD THAT THE DEDUCT ION UNDER SECTION 10A, IN OUR VIEW, WAS TO BE GIVEN EFFECT TO AT THE STAGE OF COMPUTING THE PROFITS AND GAINS OF BUSINESS. THIS IS ANTERIOR TO THE APPLICATION OF THE PROVISIONS OF SECTION 72 WHICH DEALS WITH THE CARRY FORWARD AND SET OFF OF BUSINESS LOSSES. THE HON'BLE HIGH COURT HELD THAT THE DEDUCTION UNDER SECTION 10A HAS TO BE GIVEN AT THE STAGE WHEN THE P ROFITS AND GAINS OF BUSINESS ARE COMPUTED IN THE FIRST INSTANCE. THE I SSUE BEFORE THE HON'BLE HIGH COURT WAS WITH REGARD TO THE ADJUSTMENT OF BRO UGHT FORWARD UNABSORBED DEPRECIATION AND LOSS OF THE UNIT, WHICH WERE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 10A OF THE ACT AND IT WAS H ELD THAT THE SAME COULD NOT BE SET OFF AGAINST THE CURRENT PROFIT OF THE ELIGIBLE UNITS WHILE COMPUTING THE DEDUCTION UNDER SECTION 10A OF THE AC T. 16. THE CASE OF THE REVENUE BEFORE US ON THE OTHER HAND IS THAT RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN SYNCO IND USTRIES LTD. VS. ASSESSING OFFICER, INCOME TAX, MUMBAI (SUPRA) IS TO BE APPLIED WHILE COMPUTING THE DEDUCTION UNDER SECTION 10A OF THE AC T. IN THE FACTS OF THE CASE BEFORE HON'BLE SUPREME COURT THE ASSESSEE HAD CLAIMED DEDUCTION 14 ITA NO. 1510/PN/2011, A.Y. 2007-08 FROM THE PROFITS AND GAINS OF THE BUSINESS UNDER SE CTION 80HH R.W.S. 80-I AND 80B OF THE ACT. THE HON'BLE SUPREME COURT HELD THAT WHILE WORKING OUT GROSS TOTAL INCOME OF THE ASSESSEE, LOSSES SUFF ERED BY IT IN EARLIER YEARS HAVE TO BE ADJUSTED AND IF GROSS TOTAL INCOME OF ASSESSEE IS NIL THEN THE ASSESSEE WOULD NOT BE ENTITLED TO DEDUCTIO N UNDER CHAPTER VI-A. 17. THE AUTHORITIES BELOW HAVE FURTHER PLACED RELIA NCE ON THE PROVISIONS OF SECTION 70(1) FOR THE PROPOSITION OF SET OFF OF LOSS FROM ONE SOURCE AGAINST INCOME FROM ANOTHER SOURCE UNDER THE SAME HEAD OF INCOME. THE PROVISIONS OF SECTION 10A AND 10B OF T HE ACT ARE PARA MATERIA. IN SUCH A SITUATION THE RATIO LAID DOWN B Y THE JURISDICTIONAL HIGH COURT IN HINDUSTAN UNILEVER LTD. VS. DCIT & AN R. (SUPRA) ARE TO BE APPLIED. THE HON'BLE HIGH COURT HAD HELD THAT WHER E THREE UNITS OF THE ASSESSEE HAD RETURNED PROFIT DURING THE COURSE OF A SSESSMENT YEAR AND ONE UNIT HAD RETURNED THE LOSS, THE ASSESSEE WAS EN TITLED TO DEDUCTION IN RESPECT OF THE PROFITS OF THREE ELIGIBLE UNITS, WHI LE THE LOSS SUSTAINED BY THE FOURTH UNIT COULD BE SET OFF AGAINST NORMAL BUS INESS INCOME. APPLYING THE SAID RATIO TO THE FACTS OF THE PRESENT CASE WE ARE OF THE VIEW THAT THE DEDUCTION U/S. 10A AND 10B ARE UNITS SPECI FIC IN CONTRADICTION TO BE ASSESSEE SPECIFIC. THE ASSESSEE WHILE CLAIMING THE DEDUCTION U/S. 10A OF THE ACT IN RESPECT OF EACH OF ITS UNIT HAS T O SATISFY THE CONDITIONS VIZ-A-VIZ EACH UNIT/UNDERTAKING. EVEN THE QUANTIFI CATION OF AMOUNT OF DEDUCTION HAS TO BE WORKED OUT INDEPENDENTLY IN EAC H UNIT . THE ASSESSEE BEFORE US HAS FURNISHED ON RECORD THE AUDI T REPORT IN FORM NO. 56F IN RESPECT OF EACH OF THE UNIT AGAINST WHICH IT HAS CLAIMED THE DEDUCTION UNDER SECTION 10A OF THE ACT. THE QUANTI FICATION OF THE DEDUCTION UNDER SECTION 10A OF THE ACT IS TO BE WOR KED OUT INDEPENDENTLY FOR EACH ELIGIBLE UNIT AND IN CASE AFTER THE DEDUCT ION SO CLAIMED UNDER SECTION 10A OF THE ACT, THERE ARE PROFITS IN THE HA NDS OF THE ASSESSEE FOR SUCH UNIT THEN THE SAME CAN BE SET OFF AGAINST THE LOSSES, IF ANY, INCURRED BY THE ASSESSEE IN ANY OTHER UNIT. THERE IS NO MER IT IN FIRST AGGREGATING THE PROFITS OF EACH OF THE ELIGIBLE UNIT AND SETTIN G OF THE LOSSES OF OTHER UNITS AND ON THE NET PROFITS, IF ANY, THE DEDUCTION UNDER SECTION 10A OF THE ACT TO BE COMPUTED . WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HON'BLE BOMBAY HIGH COURT IN CIT VS. BLACK & VEATCH CONSULTING PVT. LTD. (SUPRA) WHEREIN IT HAS BEEN HELD THAT THE DEDU CTION UNDER SECTION 10A OF THE ACT HAS TO BE GIVEN AT THE STAGE WHEN TH E PROFITS AND GAINS OF THE BUSINESS ARE COMPUTED IN THE FIRST INSTANCE. I N VIEW THEREOF WE REVERSE THE ORDER OF COMMISSIONER OF INCOME TAX (APP EALS) IN THIS REGARD. 15 ITA NO. 1510/PN/2011, A.Y. 2007-08 SINCE THERE HAS BEEN NO CHANGE IN THE FACTS AND CIRCUMSTANCES IN THE IMPUGNED ASSESSMENT YEAR, WE RESPECTFULLY FOLLOW THE O RDER OF CO- ORDINATE BENCH IN EARLIER ASSESSMENT YEARS IN THE CASE O F ASSESSEE AND ALLOW GROUND NOS. 5 AND 6 IN THE APPEAL OF THE ASSESSEE. 13. GROUND NOS. 1 AND 8 RAISED IN THE APPEAL ARE GENER AL IN NATURE, HENCE, REQUIRE NO ADJUDICATION. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN THE AFORESAID TERMS. ORDER PRONOUNCED ON FRIDAY, THE 04 TH DAY OF MARCH, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 04 TH MARCH, 2016 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. DRP, PUNE 4. DIT (INTL. TAXATION), PUNE 5. !'( %%)* , )* , + ,-. , / DR, ITAT, A BENCH, PUNE. 6. ( / 01 / GUARD FILE. // ! % // TRUE COPY// #2 / BY ORDER, %3 ). / PRIVATE SECRETARY, )* , / ITAT, PUNE