ACIT., Circle-2(2), Hyderabad, Hyderabad V. M/s Hyundai Motors India Engineering Pvt.Ltd., R.R.Dist

ITA 1743/HYD/2014

• Counselvise Citation: 174322514 RSA 2014
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-08-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 13-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S MO HARANA
• Assessee Lawyers: DHEERAJ LALWANI; KR VASUDEVAN MR P
• Keywords: Transfer pricing; International transaction
• Section: 115JB; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B : HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA.NO.1743/HYD/2014 ASSESSMENT YEAR 2010-2011 THE ACIT, CIRCLE 2(2), HYDERABAD. VS. M/S. H YUNDAI MOTORS INDIA ENGINEERING P. LTD., IZZATNAGAR, LINGAMPALLY (M), RANGA REDDY DISTRICT . PAN AABCH7867C (APPELLANT) (RESPONDENT) ITA.NO.1917/HYD/2014 ASSESSMENT YEAR 2010-2011 M/S. HYUNDAI MOTORS INDIA ENGINEERING P. LTD., IZZATNAGAR, LINGAMPALLY (M), RANGA REDDY DISTRICT. PAN AABCH7867C VS. THE ACIT, CIRCLE 2(2), HYDERABAD. (APPELLANT) (RESPONDENT) FOR REVENUE : MR. S. MOHARANA FOR ASSESSEE : MR. DHEERAJ LALWANI & MR. KR VASUDEVAN, MR. PAVAN KUMAR GORTI. DATE OF HEARING : 26. 0 8.2015 DATE OF PRONOUNCEMENT : 13 . 11 .2015 ORDER PER SMT. P. MADHAVI DEVI, J.M. BOTH ARE CROSS-APPEALS FOR THE A.Y. 2010-2011 AGAINST THE ASSESSMENT ORDER PASSED UNDER SECTION 1 43(3) READ WITH SECTION 92CA(4) READ WITH SECTION 144C(13 ) OF THE I.T. ACT, 1961. 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY, WHICH IS ENGAGED IN THE BUSINESS OF EXPORT OF COMPUTER SOFTWARE FILED ITS RETURN OF INCOME FOR TH E A.Y. 2010-2011 ON 07.10.2010 DECLARING AN INCOME OF RS.4,38,286. FURTHER, THE COMPANY ADMITTED THE BOOK PROFITS OF RS.3,11,28,917 UNDER SECTION 115JB OF TH E ACT. DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143 (3) OF THE I.T. ACT, THE A.O. OBSERVED THAT THE ASSESSE E HAS ENTERED INTO INTERNATIONAL TRANSACTIONS WITH ITS AS SOCIATED ENTERPRISE (IN SHORT AE') THE GROSS RECEIPTS OF WH ICH EXCEEDED RS.15 CRORES. HE THEREFORE, MADE A REFEREN CE TO THE TPO UNDER SECTION 92CA OF THE I.T. ACT FOR DETERMINATION OF THE ARMS LENGTH PRICE (ALP) IN R ESPECT OF THE INTERNATIONAL TRANSACTIONS REPORTED BY THE A SSESSEE COMPANY AFTER OBTAINING PRIOR APPROVAL OF THE LD. C IT, HYDERABAD. THE TPO PASSED THE TRANSFER PRICING ORDE R DATED 13.10.2013 UNDER SECTION 92CA(3) OF THE I.T. ACT AND PROPOSED AN ADJUSTMENT OF ALP OF RS.10,38,23,24 6 UNDER SECTION 92CA OF THE I.T. ACT. ON RECEIPT OF T HE ORDER OF THE TPO, THE A.O. PASSED THE DRAFT ASSESSMENT OR DER AND FORWARDED THE SAME TO THE ASSESSEE ON 29.01.201 4. ASSESSEE PREFERRED ITS OBJECTIONS AGAINST THE DRAFT ASSESSMENT ORDER BEFORE THE DRP AND THE DRP VIDE IT S ORDER DATED 11.09.2014 PARTLY ALLOWED RELIEF TO THE ASSESSEE. IN CONSONANCE WITH THE DIRECTIONS OF THE DRP, THE FINAL ASSESSMENT ORDER DATED 17.10.2014 WAS PAS SED, AGAINST WHICH, BOTH THE ASSESSEE AS WELL AS THE REV ENUE ARE IN APPEAL BEFORE US. 3 3. ASSESSEE HAS RAISED AS MANY AS 16 GROUNDS IN ITS APPEAL. HOWEVER, AT THE TIME OF HEARING, THE LD . COUNSEL FOR THE ASSESSEE SUBMITTED THAT ONLY GROUND NOS. 4, 6 8(A) AND (B), 13 AND 14 ARE PRESSED BY THE ASS ESSEE AND ALL OTHER GROUNDS ARE NOT SERIOUSLY CONTESTED A T THIS STAGE. IN VIEW OF THIS SUBMISSION OF THE LD. COUNSE L FOR THE ASSESSEE, THE OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE REJECTED AS NOT PRESSED. 4. IN GROUND NO.4, THE GRIEVANCE OF THE ASSESSEE IS THAT THE A.O./DRP ERRED IN CONSIDERING FOREIGN EXCHANGE LOSS AMOUNTING TO RS.1,17,88,220 INCURRED BY THE ASSESSEE AS OPERATING IN NATURE WHILE COMPUTING THE NET MARGIN OF THE ASSESSEE UNDER TRANSACTIONAL NET MARGIN METHOD (IN SHORT TNMM). 4.1. BRIEF FACTS LEADING TO THIS ISSUE ARE THAT IN ITS T.P. REPORT, ASSESSEE HAD TAKEN FOREIGN EXCHANGE GAIN/LOSS AS NON-OPERATING INCOME/EXPENSE FOR THE PURPOSE OF MARGIN CALCULATION OF THE ASSESSEE AND A LSO OF THE COMPARABLES. BEFORE THE TPO, THE ASSESSEE HAD S TATED THAT THE FOREIGN EXCHANGE GAIN/LOSS IS NON-OPERATIN G INCOME/EXPENSE AND HENCE SHOULD BE EXCLUDED FOR THE PURPOSE OF MARGIN CALCULATION. HOWEVER, THE TPO COMPUTED THE OPERATING MARGIN OF THE ASSESSEE AS 4. 37% IN THE FINAL ORDER BY CONSIDERING THE FOREIGN EXCHA NGE LOSS AS OPERATING EXPENSE. ASSESSEE HAD SUBMITTED BEFORE THE TPO THAT AFTER EXCLUDING THE NON-OPERATING EXPENSE I.E., THE FOREIGN EXCHANGE LOSS, THE OPERATING MARGIN OF THE 4 ASSESSEE WORKS OUT TO 7.75%. THE TPO WAS HOWEVER OF THE VIEW THAT FOREIGN EXCHANGE GAIN/LOSS IS AN INTEGRAL PART OF THE INCOME OF THE ASSESSEE AND SINCE THESE ARISE IN THE NORMAL COURSE OF BUSINESS, THE SAME SHOULD BE CONSIDERED WHILE COMPUTING THE NET MARGINS. THUS, ASSESSEES CONTENTION WAS REJECTED BY FOLLOWING THE DECISION OF MUMBAI TRIBUNAL IN THE CASE OF BHL EXPR ESS INDIA P. LTD., IN ITA.NO.7360/MUM/2011. FURTHER, TH E A.O. ALSO RELIED UPON THE FOLLOWING CASE LAWS FOR T REATING THE FOREIGN EXCHANGE LOSS AS PART OF THE OPERATING EXPENSE: (I) SAP LABS INDIA (P) LTD., VS. ACIT - ITA.NO.398 & 418/BANG./2008. (II) FOUR SOFT LTD. VS. DCIT ITA.NO.1495/HYD/2010. (III) CAPITAL IQ INFORMATION SYSTEMS (INDIA) P. LTD., VS. DCIT ITA.NO.1961/HYD/2011. THE DRP CONFIRMED THE ORDER OF THE A.O. AGAINST WHI CH THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. COUNSEL FOR THE ASSESSEE PLACED RELIANCE UPON THE DECISION OF THE BANGALORE TRIBUNA L IN THE CASE OF CENTILLIUM INDIA P. LTD., ITA.NO.1354/BANG/2010 IN SUPPORT OF ITS CONTENTION WHILE THE LD. D.R., SUPPORTED THE ORDERS OF THE AUT HORITIES BELOW AND SUBMITTED THAT THE FOREIGN EXCHANGE FLUCTUATIONS GAIN OR LOSS WAS PART OF THE OPERATING INCOME/EXPENDITURE AND HAS BEEN TAKEN INTO 5 CONSIDERATION TO COMPUTE THE MARGIN OF THE ASSESSEE AS WELL AS THE COMPARABLE COMPANIES. 6. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL AVAILABLE ON RECORD, IT HAS BEEN HELD BY T HE VARIOUS BENCHES OF THE TRIBUNAL THAT THE GAIN OR LO SS ON ACCOUNT OF FOREIGN EXCHANGE FLUCTUATION IS PART OF THE OPERATING INCOME OF THE ASSESSEE. 1. M/S. WESTFALIA SEPARATOR INDIA P. LTD., (ITA.NO.4446/DEL/2007) 2. M/S. LISCO SYSTEMS SERVICES B.E. INDIA BRAND VS. ADIT (ITA(T.P.) NO.270/BANG/2014) 3. M/S. FOUR SOFT LTD., VS. DCIT (ITA.NO.1495/HYD/2010). 6.1. RESPECTFULLY FOLLOWING THE ABOVE JUD GMENTS, GROUND NO.4 OF THE ASSESSEE IS REJECTED. 7. IN GROUND NO.6, THE ASSESSEE IS AGGRIEVED BY THE ORDER OF THE AO/DRP IN ACCEPTING THE FOLLOWING COMPANIES AS COMPARABLE TO THE ASSESSEE AS SELECTED BY THE TPO. (A) TCS E-SERVE INTERNATIONAL LTD., (B) TCS E-SERVE LTD., (C) COSMIC GLOBAL LIMITED (D) CROSSDOMAIN SOLUTIONS P. LTD., 8. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE COMPANY CROSSDOMAIN 6 SOLUTINOS P. LTD., HAS BEEN CONSIDERED AS A COMPARA BLE TO THE ASSESSEE IN ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR AND THE ITAT HAS UPHELD THE CONTENT ION OF THE REVENUE THAT THE SAID COMPANY IS COMPARABLE. HE THEREFORE, FAIRLY ADMITTED THAT THIS ISSUE IS COVER ED AGAINST THE ASSESSEE IN ASSESSEES OWN CASE. IN VIEW OF THE SAID SUBMISSION OF THE ASSESSEE, WE SEE NO REASON TO INT ERFERE WITH THE ORDER OF THE A.O. IN CONSIDERING CROSSDOMA IN SOLUTIONS P. LTD., AS A COMPARABLE TO THE ASSESSEE. AS REGARDS THE OTHER THREE COMPARABLES CHALLENGED BY T HE ASSESSEE AND THE T.P. ADJUSTMENT PROPOSED BY THE TP O, THE BRIEF FACTS ARE AS UNDER : 9.1. THE ASSESSEE M/S. HYUNDAI MOTOR INDIA ENGINEERING P. LTD., IS ENGAGED IN PROVIDING/RENDER ING R & D SUPPORT SERVICE IN RESPECT OF CAD AND CAE, IN DESIGNING AUTOMOBILE PARTS AND IN MODELING AND ITER ATIVE SIMULATION. IT RECEIVES THE BASIC DESIGN FROM ITS G ROUP COMPANY. IT ENTERED THE FOLLOWING INTERNATIONAL TRANSACTIONS WITH ITS AES. A.E. NATURE OF TRANSACTION AMOUNT (IN RS.) HYUNDAI AUTOEVER CORPORATION PURCHASE OF COMPUTERS 2,02,32,916 HYUNDAI AUTOEVER CORPORATION PURCHASER OF COMPUTER SOFTWARE 31,78,246 HYUNDAI MOTOR COMPANY PROVISION OF ITES 29,70,07, 503 KIA MOTOR CORPORATION PROVISION OF ITES 16,13,19, 253 HYUNDAI AUTOEVER CORPORATION REIMBURSEMENT OF EXPENSES PAID 7,72,927 48,25,10,845 7 AS PER THE AUDITED STATEMENT OF ACCOUNTS, THE FINAN CIALS OF THE TAX-PAYER/ASSESSEE ARE AS UNDER : NATURE OF TRANSACTION NATURE OF INTERNATIONAL TRANSACTION MAM PLI MARGIN OF TAX PAYER MARGIN OF COMPARABLES. PROVISION OF ITES 458,326,756 TNMM OP/OC 11.47 9.97 PURCHASE OF COMPUTERS 20,232,916 TNMM OP/OC 11.47 9.97 PURCHASE OF COMPUTER SOFTWARE 3,178,246 TNMM OP/OC 11.47 9.97 REIMBURSE - -MENT OF EXPENSES PAID 772,927 NA NA N.A. N.A. 9.2. ON GOING THROUGH THE T.P. DOCUMENT OF THE ASSESSEE, THE TPO WAS OF THE OPINION THAT THE SEARC H PROCESS OF THE ASSESSEE SUFFERS FROM DEFECTS WHICH HAS RESULTED IN SELECTION OF INAPPROPRIATE COMPARABLES AND REJECTION OF COMPARABLES THAT ARE APPROPRIATE COMPARABLES. HE, THEREFORE, REJECTED THE T.P. DOCUM ENT OF THE ASSESSEE AND PROCEEDED TO MAKE INDEPENDENT ANAL YSIS BY AGGREGATING ALL THE TRANSACTIONS UNDER TNMM. 9.3. THE TPO CONDUCTED THE FAR ANALYSIS AND AS REGARDS THE ITES SERVICES CARRIED OUT BY THE ASSESS EE, HE ADOPTED THE TNMM AS THE MOST APPROPRIATE METHOD FOR DETERMINING THE ARMS LENGTH PRICE. THEREAFTER, HE CONDUCTED FRESH SEARCH ON THE DATABASES PROWESS A ND CAPITALINE AND SELECTED THE FOLLOWING 11 COMPANIE S AS 8 FINAL COMPARABLES AND ARRIVED AT THE AVERAGE MARGIN OF THE COMPARABLES AT 28.39%. S L . NO. NAME OF THE COMPANY OR OP/OC 1. ACCENTIA TECHNOLOGIES LTD. 93,12,44,808 49.02 2. ACROPETAL TECHNOLOGIES LTD. (SEG.) 46,39,36,810 10.12 3. AXIS - I.T. & T LTD. 20,29,67,892 11.89 4. COSMIC GLOBAL LTD., 5,86,37,419 16.59 5. ECLERX SERVICES LTD., 2,57,02,10,000 42.17 6. INFOSYS BPO LTD., 11,30,05,01,306 31.63 7. TCS E - SERVE INTER NATIONAL LTD., 1,49,29,56,000 51.51 8. TCS E - SERVE LTD., 14,05,10,05,000 67.58 9. JEEVAN SOFTECH LTD., (SEG.) 1,74,43,000 8.04 10. MICROGENETICS SYSTEMS LTD., 2,40,42,539 6.60 11. CROSSDOMAIN SOLUTIONS PVT. LTD., 37,69,57,428 17.13 TOTAL : AVERAGE : 312.28 28.39 9.4. THE ASSESSEE RAISED ITS OBJECTIONS TO THE ADOPTION OF THE ABOVE COMPARABLES. HOWEVER, TPO DID NOT ACCEPT THE ASSESSEES CONTENTIONS AND AFTER GIVING THE RISK AND WORKING CAPITAL ADJUSTMENT, HE ADJUSTED THE ARM S LENGTH PRICE AT 26.81% AND SHORT FALL OF RS.10,38,2 3,246 IS TREATED AS ADJUSTMENT UNDER SECTION 92CA OF THE I.T. ACT, 1961. ON THE BASIS OF THE T.P. ORDER, THE A.O. PROPOSED THE DRAFT ASSESSMENT ORDER. AGGRIEVED BY T HE SAME, ASSESSEE RAISED ITS OBJECTIONS BEFORE THE DRP WHICH WAS PARTLY ALLOWED. IN CONSONANCE WITH THE DIRECTIO NS OF THE DRP, THE FINAL ASSESSMENT ORDER DATED 17.10.201 4 WAS PASSED AGAINST WHICH, BOTH THE ASSESSEE AS WELL AS THE REVENUE ARE IN APPEAL BEFORE US. LET US NOW DE AL WITH THE OBJECTIONS OF THE ASSESSEE ON EACH OF THE THREE 9 COMPANIES CHALLENGED BY THE ASSESSEE AS NOT COMPARA BLE BEFORE US. COSMIC GLOBAL LIMITED : 10. WE FIND THAT THE ASSESSEE ACCEPTED THIS COMPANY AS COMPARABLE BEFORE THE TPO, BUT HAS RAISE D OBJECTIONS AGAINST THIS COMPANY BEFORE THE DRP STAT ING THAT THE REVENUE FROM BPO SERVICES IS ONLY RS.26,97 ,430 WHICH IS 4.67% OF TOTAL REVENUE OF THE COMPANY WHIL E THE COMPANYS MAJOR INCOME ARISES FROM TRANSLATION CHAR GES WHICH IS 94.31% OF TOTAL REVENUE. IT WAS SUBMITTED THAT THE MAJOR COST ALSO INCLUDES TRANSLATION CHARGES PA ID OF RS.2,18,19,030 WHICH IS 43% OF TOTAL COSTS AND THER EFORE, IS NOT COMPARABLE TO THE ASSESSEE. THE ASSESSEE ALS O RELIED UPON ITATS DECISION IN ITS OWN CASE FOR A.Y . 2009- 10 FOR EXCLUSION OF THIS COMPANY. THE DRP HOWEVER, REJECTED THE ASSESSEES OBJECTION BY HOLDING THAT T HE ASSESSEE ITSELF HAD ACCEPTED THIS COMPANY AS COMPAR ABLE BEFORE THE TPO AND HENCE, CANNOT RAISE OBJECTION AG AINST THE SAME AT THIS STAGE. 10.1. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THOUGH THE ASSESSEE HAD ACCEPTED BEF ORE THE TPO THAT THIS COMPANY IS COMPARABLE, IT IS NOT PRECLUDED FROM RAISING ITS OBJECTIONS BEFORE THE AP PELLATE AUTHORITIES AND THAT DRP OUGHT TO HAVE DEALT WITH T HE ASSESSEES OBJECTIONS. HE HAS ALSO DRAWN OUR ATTENT ION TO PAGES 729 AND 731 OF THE PAPER BOOK FILED BY HIM TO DEMONSTRATE THAT THE MAJOR EXPENDITURE AND MAJOR 10 REVENUE OF THE ASSESSEE IS RELATING TO TRANSLATION SERVICES. HE ALSO PLACED RELIANCE ON THE ORDER OF THE COORDIN ATE BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE F OR A.Y. 2009-10 FOR EXCLUSION OF THIS COMPANY FROM THE FINA L LIST OF COMPARABLES. 10.2. LD. D.R. HOWEVER, SUPPORTED THE ORDERS OF TH E AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE S HOULD NOT BE PERMITTED TO TAKE DIFFERENT STANDS BEFORE DI FFERENT AUTHORITIES. 10.3. HAVING REGARD TO THE RIVAL CONTENTIONS AND T HE MATERIAL ON RECORD, WE FIND THAT THE ASSESSEE HAD R AISED OBJECTIONS AGAINST THIS COMPANY IN THE EARLIER A.Y. 2009- 10 ON A SIMILAR GROUND I.E., THE INCOME FROM TRANSL ATION SERVICES WHICH IS OUTSOURCED IS MUCH HIGHER AND THEREFORE, SHOULD NOT BE CONSIDERED AS A COMPARABLE . THE TRIBUNAL, BY RELYING ON THE DECISION OF THE TRIBUNA L AT DELHI IN THE CASE OF MERCER CONSULTING (INDIA) P. L TD., ITA.NO.966/DEL/2014 DATED 06.07.2014 HAS HELD AS UNDER : (4) COSMIC GLOBAL LTD. 14. THE MAIN OBJECTION OF ASSESSEE WITH REFERENCE TO THE INCLUSION OF THIS COMPANY IS WITH REFERENCE TO OUTSOURCING OF ITS MAIN ACTIVITY. EVEN THOUGH THIS COMPANY WAS SELECTED AS COMPARABLE IN ASSESSEES TP STUDY, IT HAS RAISED OBJECTION BEFORE THE TPO THAT THIS COMPANYS EMPLOYEE COST IS LESS THAN 21.30% AND MOST OF THE COST IS WITH REFERENCE TO THE OUTSOURCING CHARGES OR TRANSLATION CHARGES, AND AS SUCH THIS IS NOT A COMPARABLE COMPANY. THE TPO, 11 THOUGH CONSIDERED THESE SUBMISSIONS, REJECTED THE SAME, ON THE REASON THAT THIS DOES NOT IMPACT THE PROFIT MARGIN OF THE COMPANY. OPPOSING THE VIEW TAKEN BY THE TPO, IT IS SUBMITTED THAT THIS COMPANY CANNOT BE SELECTED AS COMPARABLE, AS SIMILAR ISSU E WAS DISCUSSED BY THE COORDINATE BENCH OF THE TRIBUNAL(DELHI) IN THE CASE OF MERCER CONSULTING (INDIA) P. LTD. (SUPRA), VIDE PARAS 13.2 TO 13.3 WH ICH READ AS UNDER- 13.2. NOW COMING TO THE FACTUAL MATRIX O F THIS CASE, WE FIND FROM THE MATERIAL ON RECORD THAT OUTSOURCING CHARGES OF THIS CASE CONSTITUTE 57.31% OF THE TOTAL OPERATING COSTS. THIS DO ES NOT APPEAR TO US TO BE A VALID REASON FOR ELIMINATING THIS CASE FROM THE LIST OF COMPARABL ES. ON GOING THROUGH THE ANNUAL ACCOUNTS OF COSMIC GLOBAL LIMITED, A COPY OF WHICH HAS BEEN PLACED ON RECORD, WE FIND THAT ITS TOTAL REV ENUE FROM OPERATIONS ARE AT RS.7.37 CRORE DIVIDED INTO THREE SEGMENTS, NAMELY, MEDICAL TRANSCRIPTION AND CONSULTANCY SERVICES AT RS.9.90 LACS, TRANSLATION CHARGES AT RS.6.99 CRORE AND ACCOUNTS BPO AT RS.27.76 LAC. THE LD. AR HAS MADE OUT A CASE THAT OUTSOURCING ACTIVITY CARRIED OUT BY THIS COMPANY CONSTITUTES 57% O F TOTAL EXPENSES. THE REASON FOR WHICH WE ARE NOT AGREEABLE WITH THE LD. AR IS THAT WE HAVE TO EXAMINE THE REVENUE OF THIS CASE ONLY FROM ACCOUNTS BPO SEGMENT AND NOT ON THE ENTITY LEVEL, BEING ALSO FROM MEDICAL TRANSCRIPTION AND TRANSLATION CHARGES. WHEN WE ARE EXAMINING THE RESULTS OF THIS COMPANY FROM THE ACCOUNTS BP O SEGMENT ALONE, THERE IS NO NEED TO EXAMINE THE POSITION UNDER OTHER SEGMENTS. THE ENTIRE OUTSOURCING IS CONFINED TO TRANSLATION CHARGES PAID AT RS.3.00 CRORE, WHICH IS STRICTLY IN THE REA LM OF THE TRANSLATION SEGMENT, REVENUES FROM WHICH ARE TO THE TUNE OF RS.6.99 CRORE. IF THIS SEGMENT OF TRANSLATION IS NOT UNDER CONSIDERATION FOR DECIDING AS TO WHETHER THIS CASE IS COMPARABLE OR NOT, WE CANNOT TAKE RECOURSE TO THE FIGURES WHICH ARE RELEVANT FOR SEGMENTS OTHER THAN ACCOUNTS BPO. THUS IT IS 12 HELD THAT THIS CASE CANNOT BE EXCLUDED ON TH E STRENGTH OF OUTSOURCING ACTIVITY, WHICH IS ALIEN TO THE RELEVANT SEGMENT. 13.3. HOWEVER, WE FIND THIS CASE TO BE INCOMPARABLE ON THE ALTERNATIVE ARGUMENT ADVANCED BY THE LD. AR TO THE EFFECT THAT T OTAL REVENUE OF THE ACCOUNTS BPO SEGMENT OF COSMIC GLOBAL LIMITED IS VERY LOW AT RS.27.76 LACS. WE HAVE DISCUSSED THIS ASPECT ABOVE IN THE CONTEXT OF CG-VAKS CASE AND HELD THAT A CAPTIVE UNIT CANNOT BE COMPARED WITH A GIANT CASE AND THUS EXCLUDED CG-VAK WITH TURNOVER FROM ACCOUNTS BPO SEGMENT AT RS.86.10 LACS. AS THE SEGMENTAL REVENUE OF BPO SEGMENT OF COSMIC GLOBAL LIMITED AT RS.27.76 LAC IS STILL ON MUCH LOWER SIDE, THE REASONS GIVEN ABOVE WOULD FULLY APPLY TO HOLD COSMIC GLOBAL LIMITED AS INCOMPARABLE. THIS CASE IS, THEREFORE, DIRECTE D TO BE EXCLUDED FROM THE LIST OF COMPARABLES. IN VIEW OF THE DETAILED ANALYSIS OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE ABOVE REFERRED CASE, IN THIS CASE ALSO WE ACCEPT THE CONTENTIONS OF ASSESSE E AND DIRECT THE ASSESSING OFFICER/TPO TO EXCLUDE THI S COMPARABLE FOR THE SAME REASONS. 10.4. WE FIND THAT IN THE A.Y. 2010-2011 ALSO AS OBSERVED BY US ABOVE, THE FACTS ARE SIMILAR AND THE SEGMENTAL REVENUE IS ON THE LOWER SIDE. FURTHER, TH OUGH THE ASSESSEE HAD ACCEPTED THIS COMPANY AS COMPARABL E BEFORE THE TPO, IT HAD RAISED DETAILED OBJECTION BE FORE THE DRP AND THE DRP OUGHT TO HAVE CONSIDERED THE OBJECT IONS OF THE ASSESSEE AS THE ASSESSEE IS ENTITLED TO RAIS E THE OBJECTION BEFORE THE APPELLATE AUTHORITY FOR FACTUA L DIFFERENCES TO BE CONSIDERED. FURTHER, SINCE THE TR IBUNAL IN ASSESSEES OWN CASE FOR THE EARLIER YEAR HELD TH IS COMPANY TO BE NOT COMPARABLE TO THE ASSESSEE. 13 RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINA TE BENCH IN THE ASSESSEES OWN CASE FOR A.Y. 2009-10, WE DIRECT THE AO/TPO TO EXCLUDE THIS COMPARABLE FROM T HE FINAL LIST FOR THE SAME REASON. TCS E-SERVE INTERNATIONAL LTD., AND TCS E-SERVE LIMITED 11. WE FIND THAT THE ASSESSEE HAD RAISED ITS OBJECTIONS IN DETAIL AGAINST THE ADOPTION OF THESE TWO COMPANIES AS COMPARABLES BOTH BEFORE THE TPO AS WEL L AS DRP, BUT ITS OBJECTIONS WERE REJECTED. BEFORE US AL SO, THE LD. COUNSEL FOR THE ASSESSEE REITERATED THESE OBJEC TIONS AND RELIED UPON THE T.P. ORDER IN THE CASE OF M/S. IGS IMAGING SERVICES (INDIA) P. LTD., FOR A.Y. 2010-201 1, WHERE TPO HAS EXCLUDED BOTH OF THESE COMPANIES BY HOLDING THAT THEY ARE ENGAGED IN BPO ACTIVITY AND THAT THEY HAVE REPORTED EXCEPTIONAL CIRCUMSTANCES IN THEIR ANNUAL REPORT FOR THE RELEVANT FINANCIAL YEAR. 11.1. THE LD. D.R. ON THE OTHER HAND, SUPPORTED T HE ORDERS OF THE AUTHORITIES BELOW. 11.2. HAVING REGARD TO THE RIVAL CONTENTIONS AND T HE MATERIAL ON RECORD, WE FIND THAT DURING THE RELEVAN T FINANCIAL YEAR, THE TCS E-SERVE INTERNATIONAL LTD., HAD ACQUIRED THE CITI GROUP INDIA BASED CAPTIVE BUSINES S PROCESSING OUTSOURCING (BPO) ARM FOR AN ALL-CASH CONSIDERATION AND IN RETURN, HAD ACQUIRED THE BUSIN ESS OF AN AGGREGATE AMOUNT OF $ 2.5 BILLION OVER A PERIOD OF 9.5 YEARS. THIS DEFINITELY IS AN EXCEPTIONAL CIRCUMSTAN CE 14 WHICH HAS BEEN TAKEN NOTE OF BY THE TPO IN THE CASE OF M/S. IGS IMAGING SERVICES (INDIA) P. LTD., TO EXCLU DE THE SAME FROM THE LIST OF COMPARABLE. THIS EXCEPTIONAL CIRCUMSTANCE WAS NOT TAKEN NOTE OF BY THE TPO AND T HE DRP FAILED TO APPRECIATE THE OBJECTION OF THE ASSES SEE IN PROPER PERSPECTIVE. ANY CIRCUMSTANCE WHICH WOULD INFLUENCE OR RESULT IN ABNORMAL RESULT IN THE FINAN CIALS OF A COMPANY HAVE TO BE ADJUSTED OR WHERE NO ADJUSTMEN T CAN BE DONE TO MAKE IT COMPARABLE TO THE TESTED PAR TY, SUCH A COMPANY HAS TO BE EXCLUDED FROM THE LIST OF COMPARABLES. THIS TRIBUNAL IN A NUMBER OF DECISIONS HELD THAT EXCEPTIONAL CIRCUMSTANCE IS A REASONABLE FILTE R TO EXCLUDE A COMPANY FROM THE LIST OF COMPARABLES. THEREFORE, WE DIRECT THE A.O./TPO TO EXCLUDE THIS COMPANY FROM THE FINAL LIST OF COMPARABLES. 11.2.1. AS REGARDS TCS E-SERVE LIMITED IS CONCERNED, WE FIND THAT IT POSSESSES BRAND VALUE AS IS EVIDENT FROM THE SCHEDULE-N (OPERATION AND OTHER EXPENSES) TO THE P & L A/C OF THE ANNUAL REPORT FOR THE FINANCIAL YEAR 2009-10 OF RS.46,065 THOUSANDS AND A LSO THAT IT POSSESSES INTANGIBLES IN THE FORM OF SOFTWA RE LICENSES WHICH HAVE NOT BEEN TAKEN NOTE OF BY THE AUTHORITIES BELOW WHILE ADOPTING ITS MARGIN. IT IS ALSO THE CASE OF THE ASSESSEE THAT THIS COMPANY HAS A TURNOV ER OF RS.1405.10 CRORES WHICH IS 25 TIMES OF THE TURNOVER OF THE ASSESSEE AND HENCE, IS NOT COMPARABLE TO THE ASSESS EE. THE LD. COUNSEL FOR THE ASSESSEE HAD ALSO PLACED RE LIANCE UPON THE TPOS ORDER IN THE CASE OF M/S. IGS IMAGIN G 15 SERVICES INDIA LTD., TO HOLD THAT THERE ARE EXCEPTI ONAL CIRCUMSTANCES DURING THE RELEVANT FINANCIAL YEAR DU E TO WHICH THIS COMPANY IS NOT COMPARABLE TO THE ASSESSE E. THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THA T THE SEGMENTAL DETAILS OF THIS COMPANY ARE NOT AVAILABLE AND HENCE, HAS TO BE EXCLUDED ON THIS COUNT ALSO. 11.2.2. WE FIND THAT THE ASSESSEES CONTENTIONS ABOUT THE PRESENCE OF BRAND VALUE AND OWNING OF INTANGIBLES IS SUPPORTED BY THE EVIDENCE ON RECOR D. HOWEVER, AS REGARDS THE EXTRAORDINARY EVENT OR EXCEPTIONAL CIRCUMSTANCE THERE IS NO MATERIAL PLACE D BEFORE US BY THE LD. COUNSEL FOR THE ASSESSEE. THEREFORE, MERELY BECAUSE THE TPO IN ANOTHER CASE H AS HELD THAT THERE IS AN EXTRAORDINARY EVENT FOR WHICH THIS COMPANY HAS TO BE EXCLUDED FROM THE LIST OF COMPARA BLES, IT CANNOT BE EXCLUDED. SUCH CLAIM HAS TO BE SUPPORT ED BY EVIDENCE ON RECORD. AS REGARDS THE FUNCTIONAL DISSI MILARITY AND HUGE TURNOVER AND BRAND VALUE IS CONCERNED, WE FIND THAT THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2009-10 WHILE CONSIDERING THE COMPARABILITY OF THE ASSESSEE WITH INFOSYS BPO LTD., HAS TAKEN NOTE OF THE POSSESSION OF THE BRAND VALUE AND INTANGIBLES WHICH INFLUENCED THE FINANCIAL RESULTS OF THIS COMPANY. THE HONBLE DELH I HIGH COURT IN THE CASE OF CIT VS. AGNITY INDIA TECHNOLOG IES P. LTD., (2013) 219 TAXMAN 26 (DEL.), HELD THAT HUGE TURNOVER COMPANIES LIKE INFOSYS AND WIPRO CANNOT BE CONSIDERED AS COMPARABLE TO SMALLER COMPANIES LIKE ASSESSEE THEREIN. IN THE CASE BEFORE THE HONBLE HI GH 16 COURT (SUPRA), THE TURNOVER OF THE ASSESSEE WAS ABO UT RS.15.79 CRORES AS AGAINST THE TURNOVER OF RS.1016 CRORES OF THE INFOSYS. CONSIDERING THESE FACTS, THE HONBL E HIGH COURT HAD DIRECTED FOR EXCLUSION OF INFOSYS BPO BEC AUSE OF ITS BRAND VALUE AND ALSO ON THE GROUNDS OF FUNCT IONAL DISSIMILARITY AND HUGE TURNOVER. THOUGH, THE COMPAN Y BEFORE US IS TCS E-SERVICE LTD., AND NOT INFOSYS BP O, WE FIND THAT THE TURNOVER OF THE ASSESSEE COMPANY FOR THIS ASSESSMENT YEAR IS AROUND RS.50 CRORES AS AGAINST T HE TURNOVER OF TCS E-SERVE LIMITED OF RS.1405.10 CRORE S. THEREFORE, FOLLOWING THE TURNOVER FILTER AS WELL AS TAKING NOTE OF THE FACT THAT IT OWNS AND POSSESSES BRAND V ALUE AND INTANGIBLES AS COMPARED TO THE ASSESSEE WHICH D OES NOT OWN SUCH ASSETS, WE DIRECT THAT THIS COMPANY BE EXCLUDED FROM THE LIST OF FINAL COMPARABLES. ACCORD INGLY, ASSESSEES GROUNDS OF APPEAL NO.6 IS PARTLY ALLOWED . 12. AS REGARDS GROUND NO.8(A) AND (B), THE ASSESSEE IS SEEKING THE INCLUSION OF ACCENTIA BPO S ERVICES LTD., AND R-SYSTEMS INTERNATIONAL LTD., AS COMPARAB LES TO THE ASSESSEE. 12.1. AT THE TIME OF HEARING, A QUESTION WAS POSED BY THE BENCH TO THE LD. COUNSEL FOR THE ASSESSEE TH AT IF THE COMPANIES CHALLENGED BY THE ASSESSEE ARE EXCLUD ED FROM THE FINAL LIST OF COMPARABLES, WHAT WOULD BE T HE EMERGING AVERAGE MARGIN OF THE COMPARABLES AND WHET HER IT WOULD BE WITHIN + OR 5% OF THE MARGIN OF THE A SSESSEE. LD. COUNSEL FOR THE ASSESSEE ADMITTED THAT IF THE T HREE 17 COMPANIES CHALLENGED BY THE ASSESSEE ARE EXCLUDED, THE MARGIN OF THE ASSESSEE WOULD BE WITHIN + OR 5% OF THE AVERAGE MARGIN OF THE COMPARABLES. IN VIEW OF OUR DIRECTION TO EXCLUDE THE ABOVE THREE COMPANIES FROM THE LIST OF FINAL COMPARABLES AND THE RESULTANT AVERAGE MARGIN OF THE COMPARABLES COMPANIES BEING WITHIN + OR 5% OF THE ASSESSEES MARGIN, WE ARE OF THE OPINION THAT T HE ADJUDICATION OF GROUND NO. 8(A) AND 8(B) WOULD BE O NLY ACADEMIC IN NATURE. THEREFORE, WE ARE NOT INCLINED TO ADJUDICATE THESE GROUNDS OF APPEAL AT THIS STAGE AN D ACCORDINGLY, GROUND NOS. 8(A) AND (B) ARE REJECTED. 13. AS REGARDS GROUND NOS. 13 AND 14 ARE CONCERNED, THE GRIEVANCE OF THE ASSESSEE IS REFLECT ED IN ITS GROUNDS AS UNDER : 13. THE A.O. ERRED IN GRANTING CREDIT IN RESPECT OF TAXES DEDUCTED AT SOURCE (TDS) ONLY TO THE EXTENT OF RS.10,550,734 AS AGAINST RS.11,464,704 CLAIMED IN THE RETURN OF INCOME FILED BY THE APPELLANT FOR A.Y. 2010-11. 14. THE A.O. ERRED IN LEVYING INTEREST OF RS.105,65 2 UNDER SECTION 234A OF THE ACT ON THE GROUND THAT THE APPELLANT HAD DELAYED IN FILING RETURN OF INCOME FOR THE A.Y. 2010-11. THE A.O. HAS ERRED IN IGNORING THE FACT THAT THERE IS AN EXTENSION OF DUE DATE FOR THE A.Y. 2010-11 VIDE CIRCULAR NO.F.NO.225/72/2010 DATED 27 TH SEPTEMBER, 2010. 13.1. AS THESE TWO GROUNDS NEED FACTUAL VERIFICATI ON OF THE RECORD, WE DEEM IT FIT AND PROPER TO REMIT T HESE ISSUES TO THE FILE OF A.O. FOR VERIFICATION AND GRA NTING OF 18 RELIEF, IF ANY, TO THE ASSESSEE IN ACCORDANCE WITH LAW. GROUND NOS. 13 AND 14 ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ITA.NO.1743/HYD/2014 (REVENUES APPEAL) : 14. COMING TO THE REVENUES APPEAL, WE FIND THAT IT IS AGAINST THE ASSESSMENT ORDER PASSED IN CONSON ANCE WITH THE DRP ORDER WHEREIN THE DRP HAS DIRECTED THE A.O. TO EXCLUDE INFOSYS BPO LTD., ECLERX SERVICES LTD., AND ACCENTIA TECHNOLOGIES LTD., FROM THE FINAL COMPARAB LES. THE RELEVANT GROUNDS RAISED BY THE REVENUE ARE AS U NDER: 1. THE DRP ERRED ON FACTS AND IN LAW IN EXCLUDING M/S. INFOSYS BPO LIMITED FROM COMPARABLES THOUGH IN THE ITES SECTOR, BRAND VALUE SIZE DOES NOT MATTER, AND ALSO IN SERVICE SECTOR TURNOVER AND ECONOMIES OF SCALE DO NOT PLAY ANY SIGNIFICANT ROLE AS FAR AS THE MARGINS ARE CONCERNED. 2. THE DRP ERRED ON FACTS AND IN LAW IN EXCLUDING M/S. ECLERX SERVICES LTD., FROM COM PARABLES ON THE GROUND THAT DIVERSE NATURE OF SERVICES, THOUGH THE SAID COMPANY IS ENGAGED IN THE ITES SERVICES. THE ITAT IGNORED THE FACT THAT IN THE CASE OF AGILENT TECHNOLOGIES INTERNATIONAL PVT. LTD, THE ITAT, DELHI HAS UPHELD THE SELECTION OF M/S.ECLERX. 3. THE DRP ERRED ON FACTS AND IN LAW IN EXCLUDING M/S. ACCENTIA TECHNOLOGIES LTD. FROM THE COMPARABLES ON GROUND THAT THE COMPANY OPERATES IN DIFFERENT BUSINESS STRATEGY OF ACQUIRING COMPANIES FOR INORGANIC GROWTH AS ITS STRATEGY TO INCREASE THE PROFITS BECAUSE OF PECULIAR ECONOMIC CIRCUMSTANCES AND BRAND VALUE, IF SUCH AGREEMENT IS CARRIED OUT TO LOGICAL CONCLUSION, THERE CANNOT BE ANY COMPARABLE AND CANNOT BE ANY ADDITION TO ALP. 19 15. AS REGARDS THESE GROUNDS, WE FIND THAT THE TPO HAD PROPOSED ALL THESE THREE COMPANIES AS COMPARABLES AND THE ASSESSEE HAD OBJECTED TO ALL TH ESE THREE COMPANIES BEFORE THE TPO ON VARIOUS GROUNDS. HOWEVER, TPO REJECTED THE ASSESSEES CONTENTIONS. AGGRIEVED, THE ASSESSEE HAD RAISED OBJECTIONS BEFOR E THE DRP AGAINST THESE COMPANIES ALSO. WE FIND THAT THE DRP HAS CONSIDERED ASSESSEES CONTENTIONS AT LENGTH AND DIRECTED THE A.O. TO EXCLUDE THESE COMPANIES FROM T HE FINAL LIST OF COMPARABLES. AS FAR AS INFOSYS BPO I S CONCERNED, THE DRP HAS CONSIDERED THE DECISION OF I TAT IN ASSESSEES OWN CASE FOR THE A.Y. 2009-10 AND DIRECT ED IT TO BE EXCLUDED. THE LD. D.R. HAS NOT BEEN ABLE TO B RING TO OUR NOTICE ANY DISTINGUISHING FEATURES AND FACTS FO R THE A.Y. 2010-11 FROM THAT OF THE A.Y. 2009-10 TO TAKE ANY OTHER VIEW. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE DRP ON THIS ISSUE. 16. AS REGARDS M/S. ECLERX SERVICES LTD., IS CONCERNED, WE FIND THAT THIS COMPANY WAS ALSO DIREC TED TO BE EXCLUDED BY FOLLOWING THE DECISION OF ITAT IN AS SESSEES OWN CASE FOR THE A.Y. 2009-2010 ON THE GROUND THAT IT IS A KPO. THE LD. COUNSEL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE ANNUAL REPORT OF THE SAID COMPANY TO DEMONSTRATE THAT THE FACTS AND CIRCUMSTANCES AND TH E NATURE OF THE ACTIVITIES CARRIED ON BY THE SAID COM PANY IN THE A.Y. 2010-11 ARE ALSO SAME. 20 17. LD. D.R. HAS NOT BEEN ABLE TO REBUT THIS FACTU AL ASPECTS OF THE SAID COMPANY WITH ANY EVIDENCE TO TH E CONTRARY. THE ONLY GROUND RELIED ON BY THE REVENUE IS THAT IN THE CASE OF AGILENT TECHNOLOGIES INTERNATIO NAL P. LTD., THE ITAT, DELHI BENCH HAS UPHELD SELECTION OF M/S. ECLERX SERVICES LTD. A COPY OF THE SAID ORDER IS FI LED BEFORE US. ASSESSEES CONTENTIONS THEREIN THAT THE KPO SER VICES ARE DISTINCT FROM BPO SERVICES AND ARE NOT COMPARAB LE, HAS BEEN REJECTED BY THE TRIBUNAL. HOWEVER, SINCE A UNIFORM AND CONSISTENT STAND HAS TO BE TAKEN IN THE CASE OF THE SAME ASSESSEE ON SIMILAR FACTS AND CIRCUMSTA NCES, WE, RESPECTFULLY FOLLOWING THE DECISION OF THE COOR DINATE BENCH IN ASSESSEES OWN CASE, DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE DRP. GROUND NO.2 IS ACCORDINGLY REJECTED. 18. AS REGARDS M/S. ACCENTIA TECHNOLOGIES LTD., IS CONCERNED, WE FIND THAT THE DRP HAS DIRECTED TO EXC LUDE THIS COMPANY BY PLACING RELIANCE UPON THE ORDER OF THE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y. 2009-1 0 BY HOLDING THAT THIS COMPANY OPERATES IN A DIFFERENT B USINESS STRATEGY OF ACQUIRING COMPANIES FOR INORGANIC GROWT H AS ITS STRATEGY AND CONSIDERING THE PROFIT MARGINS OF THE COMPANY AND INSUFFICIENT SEGMENTAL DATA, HELD THAT THIS COMPANY CANNOT BE SELECTED AS A COMPARABLE. IT WAS ALSO HELD BY THE DRP THAT ON THE VERY SAME REASON OF ACQUISITION OF VARIOUS COMPANIES, BEING AN EXTRAORD INARY EVENT, IT HAD AN IMPACT ON THE PROFIT OF THE COMPAN Y AND THE SAID COMPANY WAS DIRECTED TO BE EXCLUDED. 21 18.1. FOR THE RELEVANT A.Y. 2010-11, THE LD. COUNS EL FOR THE ASSESSEE HAS DRAWN OUR ATTENTION TO THE INFORMATION AVAILABLE ON ACCENTIA TECHNOLOGIES LTD. , TO DEMONSTRATE THAT THE SAID COMPANY IS INTO DIVERSIFI ED KNOWLEDGE PROCESS OUTSOURCING ACTIVITIES. IT IS SEE N THEREFROM THAT THE SAID COMPANY IS INVOLVED IN HEAL THCARE DOCUMENTATION AS WELL AS RECEIVABLES, MANAGEMENT SERVICES INCLUDING INSTALLATION AND MAINTENANCE OF ALL SOFTWARE, HARDWARE AND BAND WIDTH INFRASTRUCTURE REQUIRED FOR THE SAME, DEPLOYMENT OF MAN POWER AND SERVICE DELIVERY IN ALL THESE AREAS. IT IS ALSO SEE N THAT IT IS ENGAGED IN LEGAL PROCESS OUTSOURCING. FROM SCHEDULE -IV SHOWING THE FIXED ASSETS OF THE ASSESSEE, IT IS ALS O SEEN THAT THE SAID COMPANY OWNS GOODWILL/BRAND/IPRS (INTELLECTUAL PROPERTY RIGHTS). FROM THE NOTES TO T HE ACCOUNTS, IT IS ALSO SEEN THAT A SUBSIDIARY OF THE COMPANY ASSCENT INFOSERVE PVT. LTD., HAS BEEN AMALGAMATED W ITH THE COMPANY CONSEQUENT TO WHICH, ASSETS AND LIABILI TIES OF THE ERSTWHILE COMPANY WERE TRANSFERRED AND VESTED I N THE COMPANY W.E.F. 1 ST APRIL, 2008 AND THE SCHEME HAS BEEN GIVEN EFFECT TO IN THE ACCOUNTS OF THE YEAR. THEREF ORE, IT IS CLEAR THAT THERE IS AN EXTRAORDINARY EVENT IN THE C ASE OF ACCENTIA TECHNOLOGIES LTD., DURING THE RELEVANT FIN ANCIAL YEAR PARTICULARLY SINCE THE APPROVAL FOR AMALGAMATI ON HAS BEEN GIVEN BY THE HONBLE HIGH COURT OF MUMBAI VIDE ORDERS DATED 21 ST AUGUST, 2009 AND BY THE HONBLE KARNATAKA HIGH COURT VIDE ORDERS DATED 6 TH FEBRUARY, 2010. THIS EVENT WOULD DEFINITELY HAVE AN EFFECT ON THE PROFIT MARGINS OF THE SAID COMPANY AND THEREFORE, H AS TO 22 BE EXCLUDED FROM THE LIST OF COMPARABLES AS RIGHTLY DONE BY THE DRP. THEREFORE, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE DRP ON THIS COMPANY ALSO. ACCORDINGLY, GROUND NO.3 OF THE REVENUE IS DISMISSE D. 19. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 20. TO SUM-UP, ITA.NO.1743/HYD/2014 OF THE REVENUE IS DISMISSED AND ITA.NO.1917/HYD/2014 OF TH E ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 13.11.2015. SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED 13 TH NOVEMBER, 2015 VBP/- COPY TO : 1. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-2(2 ), 8 TH FLOOR, B-BLOCK, ROOM NO.824, I.T. TOWERS, A.C. GUARDS, HYDERABAD 5 00 004. 2. M/S. HYUNDAI MOTORS INDIA ENGINEERING PVT. LTD., SURVEY NO.5/2 & 5/3, OPP. HITECH CITY RAILWAY STATION, IZZATNAGAR, LINGAMPALLY MANDAL, RANGA REDDY DISTRICT. PIN 500 084 3. DISPUTES RESOLUTION PANEL, 2 ND FLOOR, INCOME TAX TOWERS, 10-2-3, A.C. GUARDS, HYDERABAD 500 004. 4. CIT(A)-1/MEMBER, DRP, HYDERABAD. 5. CIT-VI/MEMBER, DRP, HYDERABAD 6. DIRECTOR OF INCOME TAX, INTERNATIONAL TAXATION, INCOME TAX TOWERS, 10-2-3, A.C. GUARDS, HYDERABAD. 7. DEPUTY COMMISSIONER OF INCOME TAX (TRANSFER PRIC ING)-II, 3 RD FLOOR, D BLOCK, I.T. TOWERS, A.C. GUARDS, HYDERABAD 500 00 4. 8. D.R. ITAT B BENCH, HYDERABAD. 9. GUARD FILE