Intoto Software India Private Limited, Hyderabad V. ITO, Wd-2(1), Hyderabad

ITA 1810/HYD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98809 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-10-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 14-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K MYTHILI RANI
• Assessee Lawyers: S RAMA RAO
• Keywords: Transfer pricing; International transaction; Bad and doubtful debts
• Section: 143(3); 234B; 133(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.1810/HYD/2012 ASSESSMENT YEAR 2008-2009 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. PAN AAACI7205G VS. THE INCOME TAX OFFICER, WARD 2(1), HYDERABAD. (APPELLANT) (RESPONDENT) FOR ASSESSEE : MR. S. RAMA RAO FOR REVENUE : SMT. K. MYTHILI RANI DATE OF HEARING : 0 8. 1 0.2015 DATE OF PRONOUNCEMENT : 09. 12 .2015 ORDER PER SMT. P. MADHAVI DEVI, J.M. THIS IS ASSESSEES APPEAL FOR THE A.Y. 2008-09. THIS APPEAL IS AGAINST THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 144C OF THE I.T. A CT. THE ASSESSEE HAS RAISED AS MANY AS SIX GROUNDS OF APPEA L AND ALSO RAISED AN ADDITIONAL GROUND OF APPEAL. 2. GROUND NOS. 1, 5 AND 6 ARE GENERAL IN NATURE AND THEREFORE NEED NO ADJUDICATION. GROUND NO.2 IS AGAINST THE T.P. ADJUSTMENT MADE BY THE A.O. IN ACCORDANCE WITH THE T.P. ORDER AS WELL AS THE DIREC TIONS OF THE DRP. GROUND NO.3 IS AGAINST THE EXCLUSION OF IN TERNET EXPENSES FROM THE EXPORT TURNOVER TREATING IT AS IN CURRED 2 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. FOR DELIVERY OF SOFTWARE OUTSIDE INDIA FOR THE PURP OSE OF COMPUTATION OF DEDUCTION UNDER SECTION 10A OF THE A CT. GROUND NO.4 IS AGAINST THE LEVY OF INTEREST UNDER S ECTION 234B OF THE I.T. ACT. 3. AS REGARDS GROUND NO.3 IS CONCERNED, WE FIND THAT THOUGH THE LD. COUNSEL FOR THE ASSESSEE HAS AR GUED ON MERITS OF THE EXCLUSION OF THESE EXPENSES FROM T HE EXPORT TURNOVER FOR THE COMPUTATION OF DEDUCTION UN DER SECTION 10A OF THE ACT, WE ARE INCLINED TO ACCEPT T HE ALTERNATIVE CONTENTION OF THE ASSESSEE THAT IF THIS EXPENDITURE IS EXCLUDED FROM THE EXPORT TURNOVER, T HEN THE SAME SHOULD ALSO BE EXCLUDED FROM THE TOTAL TUR NOVER FOR THE PURPOSES OF COMPUTATION OF DEDUCTION UNDER SECTION 10A OF THE I.T. ACT. WE FIND THAT THIS ALTE RNATE PRAYER OF THE ASSESSEE IS COVERED BY THE DECISION O F THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS . M/S. TATA ELXSI LTD., AND OTHERS REPORTED IN 2011-TIOL-6 84- HC-KAR. RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE A.O. TO COMPUTE THE DEDUCTION UNDER SECTION 10A OF THE ACT BY EXCLUDING THE INTERNET EXPENSES BOTH FROM EX PORT TURNOVER AS WELL AS TOTAL TURNOVER. GROUND NO.3 OF THE ASSESSEE IS ACCORDINGLY TREATED AS ALLOWED FOR STAT ISTICAL PURPOSES. 4. AS REGARDS GROUND NO.2, WE FIND THAT THERE ARE AROUND 10 SUB-GROUNDS THEREUNDER AND ALL AGAINST TH E T.P. ADJUSTMENT MADE BY THE A.O. IN ACCORDANCE WITH THE T.P. ORDER UNDER SECTION 92CA OF THE ACT. WE FIND T HAT ALL 3 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. THESE SUB-GROUNDS ARE RELATING TO VARIOUS ASPECTS O F THE T.P. ADJUSTMENT BUT HOWEVER, AT THE TIME OF HEARING , THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASS ESSEE IS ONLY CHALLENGING THE INCLUSION OF CERTAIN COMPAN IES AS COMPARABLES TO THE ASSESSEE COMPANY. HE HAS FILED A CHART SHOWING AS TO HOW THESE COMPANIES ARE NOT COMPARABLE TO THE ASSESSEE AND AS TO HOW THESE COMPANIES HAVE BEEN DIRECTED TO BE EXCLUDED FROM TH E LIST OF COMPARABLES IN SIMILAR CIRCUMSTANCES IN THE CASE OF OTHER ASSESSEES BY VARIOUS DECISIONS OF THIS TRIBUN AL. THE SAME IS TAKEN AS RECORD AND FIND THAT EXCEPT FOR TH E ABOVE THE LD. COUNSEL FOR THE ASSESSEE DID NOT ADVANCE ARGUMENTS ON THE OTHER SUB-GROUNDS UNDER GROUND NO. 2. 5. AFTER HEARING BOTH THE PARTIES, WE FIND THAT TH E ASSESSEE IS A 100% CAPTIVE SERVICE PROVIDER AND IS ENGAGED IN THE BUSINESS OF PROVIDING SOFTWARE DEVELOPMENT SERVICES TO ITS A.E. DURING THE RELEVA NT A.Y. THE ASSESSEE ENTERED INTO INTERNATIONAL TRANSACTION S WITH ITS A.E. FOR PROVIDING SOFTWARE DEVELOPMENT SERVIC ES AND THE A.O. REFERRED THE COMPUTATION OF ARMS LENGTH P RICE (ALP) OF THE SAID INTERNATIONAL TRANSACTION TO TH E TPO UNDER SECTION 92CA OF THE I.T. ACT. THE TPO, VIDE H IS ORDER DATED 28.10.2014, PROPOSED AN ADJUSTMENT OF RS.7,53,77,082 UNDER SECTION 92CA OF THE I.T. ACT. ACCORDINGLY, AN AMOUNT OF RS.7,53,77,082 WAS PROPOS ED TO BE ADDED TO THE RETURNED INCOME OF THE ASSESSEE IN THE DRAFT ASSESSMENT ORDER. AGGRIEVED, THE ASSESSEE PRE FERRED OBJECTIONS BEFORE THE DRP AND THE DRP DIRECTED THAT 4 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. CERTAIN COMPANIES BE EXCLUDED FROM THE LIST OF COMPARABLES AND CONFIRMED THE T.P. ORDER WITH REGAR D TO OTHER COMPARABLES. IN ACCORDANCE WITH THE SAME, THE FINAL ASSESSMENT ORDER WAS PASSED, AGAINST WHICH, THE ASSESSEE IS IN APPEAL BEFORE US. 5.1. WE FIND THAT THE FINANCIAL RESULTS OF THE TAX PAYER FOR THE FINANCIAL YEAR 2007-08 ARE AS UNDER : DESCRIPTION AMOUNT OPERATING REVENUE RS.27,04,69,149 OPERATING COST* RS.25,09,22,379 OPERATING PROFIT (PBIT) RS. 1,95,46, 7 70 OPERATING PROFIT TO COST RATIO 7.23% *EXCLUDING FINANC IAL CHARGES. 5.2. THE ASSESSEE HAS ENTERED INTO THE INTERNATIONAL TRANSACTION FOR A SUM OF RS.25,72,53, 573. THE ASSESSEE AFTER ADOPTING VARIOUS FILTERS HAS ARR IVED AT - 16 COMPANIES AS COMPARABLES AND BY ADOPTING TNMM AS THE MOST APPROPRIATE METHOD, HE ARRIVED AT THE AVER AGE MARGIN OF THE COMPARABLES AT 11.3%. SINCE THE ASSES SEES MARGIN OF 16.95% ON OPERATING COST WAS WITHIN + OR 5% OF THE AVERAGE MARGIN OF THE COMPARABLE, THE ASSES SEE TREATED THE TRANSACTION AS AT ARMS LENGTH. THE TPO HOWEVER, REJECTED THE ASSESSEES T.P. STUDY AND PRO CEEDED TO MAKE A SEARCH FOR COMPARABLES AND AFTER CONSIDER ING THE ASSESSEES OBJECTIONS TO THE COMPARABLE COMPANI ES PROPOSED BY THE TPO, THE TPO ARRIVED AT THE FINAL COMPARABLES AS FOLLOWS : 5 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. SL. NO. NAME OF THE COMPANY OPERATING REVENUE (RS. CR.) OP TO TOTAL COST % OF RPT OVER SALES. % OF EXPORTS OVER SALES. ONSITE REVENUE (%) % OF R&D OVER SALES % OF MARKET OVER SALES. EMP. COST (%). 1. AVANI CINCOM TECHNOLOGIES 2.93 21.65 8.08 100.00 0.00 0.00 1.20 63.52 2. BODHTREE CONSULTING LTD 10.42 19.14 0.00 96.15 0.00 0.00 1.06 58.00 3. CELESTIAL BIOLABS 20.21 87.94 0.00 91.00 0.00 0.00 5.34 38.61 4. E-ZEST SOLUTIONS LTD., 7.66 28.95 0.00 94.74 0.00 0.00 0.89 65.37 5. FLEXTRONICS (ARICENT) 956.20 8.07 5.67 95.80 17.45 0.00 1.15 63.20 6. IGATE GLOBAL SOLUTION LTD., 786.90 13.90 17.82 100.00 50.14 0.00 0.54 58.41 7. INFOSYS 15677.00 40.41 7.78 98.60 50.90 0.00 0.18 74.25 8. KALS INFORMATION SYSTEMS LTD. (SEG.) 2.05 41.94 0.00 100.00 0.00 0.00 0.10 42.28 9. LGS GLOBAL LTD., 136.52 26.64 0.00 100.00 46.80 0.00 0.00 89.80 10. MINDTREE LTD.,(SEG.) 579.01 17.51 0.03 93.00 26.97 0.00 0.91 66.79 11. PERSISTENT SYSTEMS LTD., 405.49 27.23 3.70 93.93 5.55 0.00 0.08 73.43 12. QUINTEGRA SOLUTION LTD., 89.87 21.74 0.00 96.80 25.79 0.00 0.50 68.57 13. R SYSTEMS INTERNATIONAL (SEG.) 144.56 15.30 6.85 91.80 15.18 0.00 0.00 77.60 14. RS SOFTWARE (INDIA) LTD., 100.71 6.46 0.00 96.00 64.16 0.00 1.00 65.04 15. SASKEN COMMUNICATION TECHNOLOGIES LTD., (SEG.) 354.12 13.44 0.00 76.00 18.33 14.50 0.00 82.88 16. TATA ELXSI (SEG.) 342.85 18.97 0.60 70.00 27.13 0.00 0.77 62.89 17. THIRDWARE SOLUTION LTD., 522.80 18.01 8.92 79.12 6.70 0.00 0.04 58.76 18. WIPRI LTD., (SEG.) 11258.00 28.38 0.03 76.00 54.40 0.00 1.99 50.00 19. SOFTSOL INDIA LTD., 23.47 42.15 14.25 81.00 5.00 0.00 0.00 55.81 AVERAGE 26.20 5.3. ACCORDINGLY, HE COMPUTED THE ARMS LENGTH ADJUSTMENT AT RS.7,53,77,082, AFTER MAKING THE NEGA TIVE WORKING CAPITAL ADJUSTMENT OF -3.84%. THE ASSESSEE IS NOW SEEKING EXCLUSION OF THE FOLLOWING COMPANIES FR OM THE FINAL LIST OF COMPARABLES. 6 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. SL.NO. NAME OF THE COMPANY 1. AVANI CIMCON TECHNOLOGIES LTD., 2. E - ZEST SOLUTIONS LTD., 3. INFOSYS TECHNOLOGIES LTD., 4. KALS INFORMATION SYSTEMS 5. WIPRO LTD., 6. TATA ELXSI L TD., 7. THIRDWARE SOLUTIONS LTD., 8. PERSISTENT SYSTEMS LTD., 9. QUINTEGRA SOLUTIONS LTD., 10. SOFTSOL LIMITED 11. BODHTREE CONSULTING LTD., 5.4. AS FAR AS THESE COMPANIES ARE CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THESE COMPANIES ARE FUNCTIONALLY DIFFERENT FROM THE ASSES SEE AS THEY WERE ALSO INTO SOFTWARE PRODUCTS DEVELOPMENT A ND AS REGARDS SOME OF THE COMPANIES, THE SEGMENTAL DATA A LSO IS NOT AVAILABLE. HE SUBMITTED THAT THE COMPANIES, INF OSYS TECHNOLOGIES LTD., AND WIPRO LIMITED ARE BOTH ENGAG ED IN SOFTWARE DEVELOPMENT AND PRODUCT DEVELOPMENT AND AL SO OWN INTELLECTUAL PROPERTY IN THE FORM OF PATENTS AN D HAVE HIGH TURNOVER AND BRAND VALUE AND THEREFORE, ARE NO T COMPARABLE TO THE ASSESSEE. AS REGARDS SOFTSOL INDI A LTD., IS CONCERNED, HE SUBMITTED THAT THIS COMPANY IS FUNCTIONALLY DIFFERENT AND ALSO RPT FILTER. AS REGA RDS BODHTREE CONSULTING LIMITED, THE LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THIS COMPANY IS ENGAGED IN DATA CLEANSING SERVICES AND IS NOT ENGAGED IN SOFTWARE DEVELOPMENT SERVICES AND THEREFORE, IS FUNCTIONALLY DIFFERENT. HE HAS SUBMITTED THAT ALL THESE COMPANIE S HAVE BEEN CONSIDERED AS NOT COMPARABLE TO SOFTWARE DEVELOPMENT SERVICES COMPANY SUCH AS THE ASSESSEE, IN 7 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. THE CASE OF NTT DATA INDIA ENTERPRISE APPLICATION S ERVICES P. LTD., IN ITA.NO.1862/HYD/2012 DATED 02.01.2015 F OR THE VERY SAME A.Y. 2008-09 AS WELL AS IN THE CASE O F 3DPLM SOFTWARE SOLUTIONS P. LTD., ITA.NO.1303/BANG/ 12 FOR THE A.Y. 2008-09 BY THE DECISION OF ITAT, BANGA LORE TRIBUNAL. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO FILED COPIES OF THE ABOVE DECISIONS BEFORE US. 6. THE LD. D.R. ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. HAVING CONSIDERED THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF NTT DATA INDIA ENTE RPRISE APPLICATION (CITED SUPRA), HAS RECORDED THE FOLLOWI NG REASONS FOR EXCLUSION OF THE FOLLOWING COMPANIES FR OM THE FINAL LIST OF COMPARABLES. 2 . SELECTION OF COMPARABLES. 9. THE NEXT ISSUE FOR CONSIDERATION IS WITH REFERENCE TO SELECTION OF COMPARABLES. AS BRIEFLY S TATED ABOVE, TPO SELECTED 19 COMPANIES AS COMPARABLE COMPANIES OUT OF WHICH, ONE COMPANY VIZ., CELESTIAL BIO LABS WAS DELETED BY DRP. OUT OF THE BALANCE 18 COMPARABLES, ASSESSEE IS OBJECTING TO SELECTION OF 8 COMPARABLE COMPANIES WHICH ARE AS UNDER : 1. AVANI CINCOM TECHNOLOGIES LTD., 21.65% FUNCTIONALLY DIFFERENT. 2. BODHTREE CONSULTING LTD., 19.14% 3. E-ZEST SOLUTIONS LTD., 28.95% 4. INFOSYS TECHNOLOGIES LTD., 40.41% 5. KALS INFORMATION SYSTEMS LTD., 30.92% 6. TATA ELXSI LTD., (SEG.) 18.97% 7. THIRDWARE SOLUTIONS LTD., 18.01% 8. WIPRO LTD., (SEG.) 28.38% 8 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. 9.1. IT WAS THE SUBMISSION THAT THESE COMPANIES ARE FUNCTIONALLY DIFFERENT AND THE OBJECTIONS ARE SUMMARILY STATED IN THE CHART SUBMITTED. IT WAS THE SUBMISSION BY LD. COUNSEL THAT THESE COMPARABLES WE RE ANALYSED BY VARIOUS COORDINATE BENCHES PARTICULARLY IN THE CASE OF M/S. 3DPLM SOFTWARE SOLUTIONS LTD. VS. DCIT ITA.NO.1303/BANG/2012, AGNITY INDIA TECHNOLOGIES P. LTD., VS. DCIT ITA.NO.6485/DEL/2012, NETHAWK NETWOR KS INDIA P. LTD., VS. ITO ITA.NO.7633/M/2012 AND IBM I NDIA P. LTD., VS. JCIT ITA.NO.1543/BANG/2012. 10. LD. D.R. HOWEVER, OBJECTED TO THE ABOVE AND FILED WRITTEN SUBMISSIONS STATING THAT THE FUNCTION AL DIFFERENCE HIGHLIGHTED BY ASSESSEE ARE LESS EFFECTE D AS THE ANALYSIS DONE IN THE TNMM AND ASSESSEE ITSELF IS NO T FOLLOWING THE HIGH END AND LOW END DISTINCTION WHIL E SELECTING THE COMPARABLES. SINCE NEITHER THE TAX-PA YER NOR THE TPO HAS GONE INTO THE VERTICALS WITHIN THE SOFT WARE INDUSTRY IN ITS COMPARABLE STUDY, THE OBJECTIONS OF ASSESSEE CANNOT BE CONSIDERED. LIKEWISE, THE LD. D. R. OBJECTED FOR EXCLUDING THE ABNORMAL HIGH MARGIN COMPANIES, HIGH TURNOVER COMPANIES AND RELIED ON VA RIOUS CASE LAW IN FAVOUR OF REVENUE. 11. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE AR E OF THE OPINION THAT THE ABOVE COMPANIES (EXCEPT BOD HTREE CONSULTING LTD.,) ARE TO BE EXCLUDED AS THESE ARE A NALYSED BY COORDINATE BENCH OF THE BANGALORE TRIBUNAL IN I.T.(T.P.)A.NO.1303/BANG/2012 DATED 28.11.2013 IN T HE CASE OF M/S. 3DPLM SOFTWARE SOLUTIONS LTD., BANGALO RE VS. DCIT, CIRCLE(1), BANGALORE WHICH WAS RELIED UPO N BY LD. COUNSEL. BOTHTREE CONSULTING LTD WAS DISCUSSED IN THE CASE OF NET HAWK NET WORKS INDIA P LTD IN ITA N O 7633/MUM/2012 DT 06.11.2013 BY ITAT MUMBAI BENCH K AND THIS IS ALSO TO BE EXCLUDED. FOR THE SAKE O F RECORD, THE FINDINGS OF VARIOUS COMPANIES DECIDED BY THE COORDINATE BENCHES OF TRIBUNAL (SUPRA) ARE AS UNDER : 1. AVANI CINCOM TECHNOLOGIES LTD., 7.6.1 WE HAVE HEARD BOTH PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. IT IS SEEN FROM THE RECORD THAT THE TPO HAS INCLUDED THIS COMPANY I N THE FINAL SET OF COMPARABLES ONLY ON THE BASIS OF INFOR MATION OBTAINED UNDER SECTION 133(6) OF THE ACT. IN THESE CIRCUMSTANCES, IT WAS THE DUTY OF THE TPO TO HAVE 9 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. NECESSARILY FURNISHED THE INFORMATION SO GATHERED T O THE ASSESSEE AND TAKEN ITS SUBMISSIONS THEREON INTO CONSIDERATION BEFORE DECIDING TO INCLUDE THIS COMPA NY IN ITS FINAL LIST OF COMPARABLES. NON-FURNISHING THE INFORMATION OBTAINED UNDER SECTION 133(6) OF THE AC T TO THE ASSESSEE HAS VITIATED THE SELECTION OF THIS COMPANY AS A COMPARABLE. 7.6.2 WE ALSO FIND SUBSTANTIAL MERIT IN THE CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE THAT THIS COMPANY HAS BEEN SELECTED BY THE TPO AS AN ADDITIONAL COMPARABLE ONLY ON THE GROUND THAT THIS COMPANY WAS SELECTED IN THE EARLIER YEAR. EVEN IN T HE EARLIER YEAR, IT IS SEEN THAT THIS COMPANY WAS NOT SELECTED ON THE BASIS ON ANY SEARCH PROCESS CARRIED OUT BY T HE TPO BUT ONLY ON THE BASIS OF INFORMATION COLLECTED UNDE R SECTION 133(6) OF THE ACT. APART FROM PLACING RELIA NCE ON THE JUDICIAL DECISION CITED ABOVE, INCLUDING THE AS SESSEE'S OWN CASE FOR ASSESSMENT YEAR 2007-08, THE ASSESSEE HAS BROUGHT ON RECORD EVIDENCE THAT THIS COMPANY IS FUNCTIONALLY DIS-SIMILAR AND DIFFERENT FROM THE ASS ESSEE AND HENCE IS NOT COMPARABLE. THEREFORE THE FINDING EXCLUDING IT FROM THE LIST OF COMPARABLES RENDERED IN THE IMMEDIATELY PRECEDING YEAR IS APPLICABLE IN THIS YE AR ALSO. SINCE THE FUNCTIONAL PROFILE AND OTHER PARAMETERS B Y THIS COMPANY HAVE NOT UNDERGONE ANY CHANGE DURING THE YE AR UNDER CONSIDERATION WHICH FACT HAS BEEN DEMONSTRATE D BY THE ASSESSEE, FOLLOWING THE DECISIONS OF THE CO-ORD INATE BENCHES OF THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2007-08 IN ITA.NO.845/BANG/2011 DT.22.2.2013, AND IN THE CASE OF TRIOLOGY E-BUSINES S SOFTWARE INDIA PVT. LTD. (ITA NO.1054/BANG/2011), W E DIRECT THE A.O./TPO TO OMIT THIS COMPANY FROM THE L IST OF COMPARABLES. 2. BOTHTREE CONSULTING LTD . 21. ON THIS COMPARABLE, CASE OF THE ASSESSEE IS TH AT THE COMPANY IS NOT A GOOD COMPARABLE IN VIEW OF THE SOF TWARE PRODUCTS PRODUCED BY THE COMPANY. AS SUCH, NO SEGMENTAL DATA IS ADEQUATELY AVAILABLE TOO. 22. ON THE OTHER HAND, LD DR FILED A COPY OF THE FINANCIAL STATEMENT AND ARGUED VEHEMENTLY STATING T HAT THIS COMPANY IS NOT ENGAGED IN THE SOFTWARE PRODUCT S. IN THIS REGARD, LD DR RELIED ON THE NOTE NO.3, RELATIN G TO THE 10 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. RELATING TO THE REVENUE RECOMMENDATION IN SCHEDULE 12, NOTE NO.5 RELATING TO THE SEGMENTAL INFORMATION ETC ., TO MENTION THAT THE COMPANY IS ENGAGED IN THE SOFTWARE DEVELOPMENT ONLY. HOWEVER, THE ASSESSEE ARGUED VEHEMENTLY STATING THAT THIS COMPANY IS ENGAGED IN THE SOFTWARE BASED PRODUCTS. FURTHER, LD COUNSEL MENTIO NED THAT THE SAID COMPANY WAS ALREADY EXAMINED AND WAS HELD AS PRODUCT BASED COMPANY BY THE TPO IN THE TP STUDY OF OTHER CASE AND THE TPO CANNOT TAKE DIFFERE NT STAND IN THIS CASE. IN THIS REGARD, WE HAVE PERUSED THE PARA 29 OF THE ORDER OF THE TRIBUNAL IN THE CASE OF M/S. WILLS PROCESSING SERVICES (I) P LTD (SUPRA) WHEREIN IT WAS MENTIONED THAT THE TPO DESCRIBED THIS COMPANY IS ENGAGED IN THE BUSINESS OF SOFTWARE PRODUCTS, NOT T HE SOFTWARE DEVELOPMENT SERVICES. RELEVANT PORTIONS FR OM THE SAID PARA 29 OF THE ORDER OF THE TRIBUNAL IS REPROD UCED HERE UNDER : 29.1 THE ID SR COUNSEL FOR THE ASSESSEE HAS SUBMITT ED THAT THIS COMPANY IS ENGAGED IN THE SOFTWARE PRODUC TS. HE HAS REFERRED THE TPO ORDER AND SUBMITTED THAT IN THE PROFILE OF THE COMPARABLES SELECTED BY THE TPO ITSE LF HAS MENTIONED THE BUSINESS OF THE ASSESSEE IS IN SOFTWA RE PRODUCTS . THE ID AR HAS REFERRED THE OBJECTIONS RAISED BY THE ASSESSEE BEFORE THE TPO AT PAGE 286 OF THE PAPE R BOOK AND SUBMITTED THAT THE ASSESSEE BROUGHT THIS F ACT THAT THIS COMPANY IS ENGAGED IN PROVIDING OPEN AND END TO END WEB SOLUTIONS, SOFTWARE CONSULTANCY, DESIGN AND DEVELOPMENT OF SOFTWARE, USING THE LATEST TECHNOLOG IES. FURTHER, THE COMPANY HAS IDENTIFIED ONLY ONE SEGMEN T I.E SOFTWARE DEVELOPMENT. THEREFORE, THE ID AR HAS SUBMITTED THAT THIS COMPANY IS FUNCTIONALLY NOT COMPARABLE WITH THE ASSESSEE AND CONSEQUENTLY SHOULD BE EXCLUDED FROM THE COMPARABLES. 29.2 ON THE OTHER HAND, THE ID DR HAS FILED THE INFORMATION COLLECTED U/S 133(6) OF THE I T ACT AND SUBMITTED THAT AS PER THIS INFORMATION, THIS COMPAN Y HAS REVENUE FROM ITES ACTIVITY TO THE EXTENT OF RS. 2,94,85,528/-. THEREFORE, THIS COMPANY IS A GOOD COMPARABLE HAVING FUNCTIONAL SIMILARITY. 29.3 ... 30. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIAL ON RECORD. THE DETAILS FILED BY THE 11 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. ID DR BEFORE US HAS BEEN OBTAINED BY THE TPO AT HYDERABAD AND NOT BY THE TPO OF THE ASSESSEE IN THE PRESENT CASE. IT IS STATED IN THE LETTER DATED 5.2. 2010 WRITTEN BY THE CHARTERED ACCOUNTANT OF BODHTREE CONSULTING LTD TO THE TPO HYDERABAD THAT THE COMPANY IS PROVIDING DATA CLEANING SERVICES TO CLIENTS FOR WHOM IT HAD DEVELOPED THE SOFTWARE APPLICATION. 23. CONSIDERING THE ABOVE, WE ARE OF THE OPINION TH AT BODHTREE CONSULTING LIMITED IS NOT ENGAGED IN THE SOFTWARE DEVELOPMENT SERVICES AND THERE IS NO SEGME NTAL DATA COMPARABLE. THEREFORE, THE FAR ANALYSIS GOES AGAINST THE TPO/AO. ACCORDINGLY, WE DISMISS THE ARGUMENT OF THE LD DR IN THIS REGARD. EX CONSEQUENT I THE AO/TPO IS DIRECTED TO EXCLUDE THE SAME FROM THE LIS T OF FINAL COMPARABLES FOR WORKING OUT THE ARITHMETIC ME AN. 3. E-ZEST SOLUTIONS LTD. 14.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RE CORD. IT IS SEEN FROM THE RECORD THAT THE TPO HAS INCLUDE D THIS COMPANY IN THE LIST OF COMPARABALES ONLY ON THE BAS IS OF THE STATEMENT MADE BY THE COMPANY IN ITS REPLY TO T HE NOTICE UNDER SECTION 133(6) OF THE ACT. IT APPEARS THAT THE TPO HAS NOT EXAMINED THE SERVICES RENDERED BY THE COMPANY TO GIVE A FINDING WHETHER THE SERVICES PERF ORMED BY THIS COMPANY ARE SIMILAR TO THE SOFTWARE DEVELOP MENT SERVICES PERFORMED BY THE ASSESSEE. FROM THE DETAIL S ON RECORD, WE FIND THAT WHILE THE ASSESSEE IS INTO SOF TWARE DEVELOPMENT SERVICES, THIS COMPANY I.E. E-ZEST SOLU TIONS LTD., IS RENDERING PRODUCT DEVELOPMENT SERVICES AND HIGH END TECHNICAL SERVICES WHICH COME UNDER THE CATEGOR Y OF KPO SERVICES. IT HAS BEEN HELD BY THE CO-ORDINATE B ENCH OF THIS TRIBUNAL IN THE CASE OF CAPITAL I-Q INFORMATIO N SYSTEMS (INDIA) (P) LTD. SUPRA) THAT KPO SERVICES A RE NOT COMPARABLE TO SOFTWARE DEVELOPMENT SERVICES AND ARE THEREFORE NOT COMPARABLE. FOLLOWING THE AFORESAID D ECISION OF THE CO-ORDINATE BENCH OF THE HYDERABAD TRIBUNAL IN THE AFORESAID CASE, WE HOLD THAT THIS COMPANY, I.E. E-Z EST SOLUTIONS LTD. BE OMITTED FROM THE SET OF COMPARABL ES FOR THE PERIOD UNDER CONSIDERATION IN THE CASE ON HAND. THE A.O. / TPO IS ACCORDINGLY DIRECTED. 12 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. 4. INFOSYS TECHNOLOGIES LTD. 11.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RE CORD. WE FIND THAT THE ASSESSEE HAS BROUGHT ON RECORD SUF FICIENT EVIDENCE TO ESTABLISH THAT THIS COMPANY IS FUNCTION ALLY DIS-SIMILAR AND DIFFERENT FROM THE ASSESSEE AND HEN CE IS NOT COMPARABLE AND THE FINDING RENDERED IN THE CASE OF TRILOGY E-BUSINESS SOFTWARE INDIA PVT. LTD. (SUPRA) FOR ASSESSMENT YEAR 2007-08 IS APPLICABLE TO THIS YEAR ALSO. WE ARE INCLINED TO CONCUR WITH THE ARGUMENT PUT FOR TH BY THE ASSESSEE THAT INFOSYS TECHNOLOGIES LTD IS NOT FUNCTIONALLY COMPARABLE SINCE IT OWNS SIGNIFICANT INTANGIBLE AND HAS HUGE REVENUES FROM SOFTWARE PROD UCTS. IT IS ALSO SEEN THAT THE BREAK UP OF REVENUE FROM S OFTWARE SERVICES AND SOFTWARE PRODUCTS IS NOT AVAILABLE. IN THIS VIEW OF THE MATTER, WE HOLD THAT THIS COMPANY OUGHT TO BE OMITTED FROM THE SET OF COMPARABLE COMPANIES. IT IS ORDERED ACCORDINGLY. 5. KALS INFORMATION SYSTEMS LTD., : 10.4. WE HAVE HEARD BOTH PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. WE FIN D FROM THE RECORD THAT THE TPO HAS DRAWN CONCLUSIONS AS TO THE COMPARABILITY OF THIS COMPANY TO THE ASSESSEE BASED ON INFORMATION OBTAINED U/S.133(6) OF THE ACT. THIS INFORMATION WHICH WAS NOT IN THE PUBLIC DOMAIN OUGH T NOT TO HAVE BEEN USED BY THE TPO, MORE SO WHEN THE SAME IS CONTRARY TO THE ANNUAL REPORT OF THE COMPANY, AS PO INTED OUT BY THE LEARNED AUTHORISED REPRESENTATIVE. WE AL SO FIND THAT THE CO-ORDINATE BENCHES OF THIS TRIBUNAL IN THE ASSESSEE'S OWN CASE FOR ASSESSMENT YEAR 2007-08 (SUPRA) AND IN THE CASE OF TRIOLOGY E-BUSINESS SOFT WARE INDIA PVT. LTD. (SUPRA) HAVE HELD THAT THIS COMPANY WAS DEVELOPING SOFTWARE PRODUCTS AND WAS NOT PURELY OR MAINLY A SOFTWARE SERVICE PROVIDER. APART FROM RELY ING OF THE ABOVE CITED DECISIONS OF CO-ORDINATE BENCHES OF THE TRIBUNAL (SUPRA), THE ASSESSEE HAS ALSO BROUGHT ON RECORD EVIDENCE FROM VARIOUS PORTIONS OF THE COMPANYS ANN UAL REPORT TO ESTABLISH THAT THIS COMPANY IS FUNCTIONAL LY DIS- SIMILAR AND DIFFERENT FORM THE ASSESSEE AND THAT SI NCE THE FINDINGS RENDERED IN THE DECISIONS OF THE CO-ORDINA TE BENCHES OF THE TRIBUNAL FOR ASSESSMENT YEAR 2007-08 (CITED SUPRA) ARE APPLICABLE FOR THIS YEAR I.E. ASS ESSMENT YEAR 2008-09 ALSO, THIS COMPANY OUGHT TO BE EXCLUDE D 13 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. FROM THE LIST OF COMPARABLES. IN THIS VIEW OF THE M ATTER, WE HOLD THAT THIS COMPANY I.E. KALS INFORMATION SYSTEM S LTD., IS TO BE OMITTED FORM THE LIST OF COMPARABLE COMPANIES. IT IS ORDERED ACCORDINGLY. 6. TATA ELEXSI LTD. 13.4.1. WE HAVE HEARD BOTH PARTIES AND CAREFULLY PERUSED AND CONSIDERED THE MATERIAL ON RECORD. FROM THE DETAILS ON RECORD, WE FIND THAT THIS COMPANY IS PREDOMINANTLY ENGAGED IN PRODUCT DESIGNING SERVICES AND NOT PURELY SOFTWARE DEVELOPMENT SERVICES. THE DETAI LS IN THE ANNUAL REPORT SHOW THAT THE SEGMENT SOFTWARE DEVELOPMENT SERVICES RELATES TO DESIGN SERVICES AN D ARE NOT SIMILAR TO SOFTWARE DEVELOPMENT SERVICES PERFOR MED BY THE ASSESSEE. 13.4.2. THE HON'BLE MUMBAI TRIBUNAL IN THE CASE OF TELECORDIA TECHNOLOGIES INDIA PVT. LTD. V ACIT (ITA NO.7821/MUM/2011) HAS HELD THAT TATA ELXSI LTD. IS NOT A SOFTWARE DEVELOPMENT SERVICE PROVIDER AND THEREFO RE IT IS NOT FUNCTIONALLY COMPARABLE. IN THIS CONTEXT THE RELEVANT PORTION OF THIS ORDER IS EXTRACTED AND REPRODUCED B ELOW :- . TATA ELXSI IS ENGAGED IN DEVELOPMENT OF NICHE PRODUCT AND DEVELOPMENT SERVICES WHICH IS ENTIRELY DIFFERENT FROM THE ASSESSEE COMPANY. WE AGREE WITH THE CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE THAT THE NATURE OF PRODUCT DEVELOPED AND SERVICES PROVIDED BY THIS COMPANY ARE DIFFERENT FROM THE ASSESSEE AS HAVE BEEN NARRATED IN PARA 6.6 ABOVE. EVEN THE SEGMENTAL DETAILS FOR REVENUE SALES HAVE NOT BEEN PROVIDED BY THE TPO SO AS TO CONSIDER IT AS A COMPARABLE PARTY FOR COMPARING THE PROFIT RATIO FROM PRODUCT AND SERVICES. THUS, ON THESE FACTS, WE ARE UNABLE TO TREAT THIS COMPANY AS FIT FOR COMPARABILITY ANALYSIS FOR DETERMINING THE ARMS LENGTH PRICE FOR THE ASSESSEE, HENCE, SHOULD BE EXCLUDED FROM THE LIST OF COMPARABLE PORTION. AS CAN BE SEEN FROM THE EXTRACTS OF THE ANNUAL REPO RT OF THIS COMPANY PRODUCED BEFORE US, THE FACTS PERTAIN ING TO TATA ELXSI HAVE NOT CHANGED FROM ASSESSMENT YEAR 20 07- 08 TO ASSESSMENT YEAR 2008-09. WE, THEREFORE, HOLD THAT THIS COMPANY IS NOT TO BE CONSIDERED FOR INCLUSION IN THE 14 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. SET OF COMPARABLES IN THE CASE ON HAND. IT IS ORDER ED ACCORDINGLY. 7. THIRDWARE SOLUTIONS LTD 15.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RE CORD. IT IS SEEN FROM THE MATERIAL ON RECORD THAT THE COM PANY IS ENGAGED IN PRODUCT DEVELOPMENT AND EARNS REVENUE FR OM SALE OF LICENSES AND SUBSCRIPTION. HOWEVER, THE SEG MENTAL PROFIT AND LOSS ACCOUNTS FOR SOFTWARE DEVELOPMENT S ERVICES AND PRODUCT DEVELOPMENT ARE NOT GIVEN SEPARATELY. FURTHER, AS POINTED OUT BY THE LEARNED AUTHORISED REPRESENTATIVE, THE PUNE BENCH OF THE TRIBUNAL IN T HE CASE OF E-GAIN COMMUNICATIONS PVT. LTD. (SUPRA) HAS DIRE CTED THAT SINCE THE INCOME OF THIS COMPANY INCLUDES INCO ME FROM SALE OF LICENSES, IT OUGHT TO BE REJECTED AS A COMPARABLE FOR SOFTWARE DEVELOPMENT SERVICES. IN T HE CASE ON HAND, THE ASSESSEE IS RENDERING SOFTWARE DEVELOPMENT SERVICES. IN THIS FACTUAL VIEW OF THE M ATTER AND FOLLOWING THE AFORE CITED DECISION OF THE PUNE TRIBUNAL (SUPRA), WE DIRECT THAT THIS COMPANY BE OMITTED FRO M THE LIST OF COMPARABLES FOR THE PERIOD UNDER CONSIDERAT ION IN THE CASE ON HAND. 8. WIPRO LTD., 12.4.1. WE HAVE HEARD BOTH PARTIES AND CAREFULLY PERUSED AND CONSIDERED THE MATERIAL ON RECORD. WE F IND MERIT IN THE CONTENTIONS OF THE ASSESSEE FOR EXCLUS ION OF THIS COMPANY FROM THE SET OF COMPARABLES. IT IS SEE N THAT THIS COMPANY IS ENGAGED BOTH IN SOFTWARE DEVELOPMEN T AND PRODUCT DEVELOPMENT SERVICES. THERE IS NO INFOR MATION ON THE SEGMENTAL BIFURCATION OF REVENUE FROM SALE O F PRODUCT AND SOFTWARE SERVICES. THE TPO APPEARS TO H AVE ADOPTED THIS COMPANY AS A COMPARABLE WITHOUT DEMONSTRATING HOW THE COMPANY SATISFIES THE SOFTWAR E DEVELOPMENT SALES 75% OF THE TOTAL REVENUE FILTER A DOPTED BY HIM. ANOTHER MAJOR FLAW IN THE COMPARABILITY ANA LYSIS CARRIED OUT BY THE TPO IS THAT HE ADOPTED COMPARISO N OF THE CONSOLIDATED FINANCIAL STATEMENTS OF WIPRO WITH THE STAND ALONE FINANCIALS OF THE ASSESSEE; WHICH IS NO T AN APPROPRIATE COMPARISON. 12.4.2 WE ALSO FIND THAT THIS COMPANY OWNS INTELLECTUAL PROPERTY IN THE FORM OF REGISTERED PAT ENTS AND 15 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. SEVERAL PENDING APPLICATIONS FOR GRANT OF PATENTS. IN THIS REGARD, THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN T HE CASE OF 24/7 CUSTOMER.COM PVT. LTD. (ITA NO.227/BANG/ 20 10) HAS HELD THAT A COMPANY OWNING INTANGIBLES CANNOT B E COMPARED TO A LOW RISK CAPTIVE SERVICE PROVIDER WHO DOES NOT OWN ANY SUCH INTANGIBLE AND HENCE DOES NOT HAVE AN ADDITIONAL ADVANTAGE IN THE MARKET. AS THE ASSESSEE IN THE CASE ON HAND DOES NOT OWN ANY INTANGIBLES, FOLL OWING THE AFORESAID DECISION OF THE CO-ORDINATE BENCH OF THE TRIBUNAL I.E. 24/7 CUSTOMER.COM PVT. LTD. (SUPRA), WE HOLD THAT THIS COMPANY CANNOT BE CONSIDERED AS A COMPARABLE TO THE ASSESSEE. WE, THEREFORE, DIRECT T HE ASSESSING OFFICER/TPO TO OMIT THIS COMPANY FROM THE SET OF COMPARABLE COMPANIES IN THE CASE ON HAND FOR THE YEAR UNDER CONSIDERATION. 12. RESPECTFULLY FOLLOWING THE DECISIONS OF COORDINATE BENCHES OF THE TRIBUNAL REFERRED ABOVE, AND OTHER CASES RELIED ON, WE HOLD THAT THE AFORESAID 8 COMPANIES HAVE TO BE EXCLUDED FROM THE LIST OF COMPARABLES CHOSEN BY TPO. 7.2. FURTHER, THE LD. COUNSEL FOR THE ASSESSEE IS SEEKING EXCLUSION OF THE FOLLOWING COMPANIES ALSO F OR THE FOLLOWING REASONS : A) PERSISTENT SYSTEMS LTD., IS ENGAGED IN PRODUCT DEVELOPMENT AND DESIGN SERVICES AND NO SEPARATE SEGMENTAL DETAILS AVAILABLE. B) QUINTEGRA SOLUTIONS LTD., IS ENGAGED IN PRODUCT ENGINEERING SERVICES AND IN PROPRIETARY SOFTWARE PRODUCTS AND HAS UNDERTOOK SUBSTANTIAL R & D ACTIVITIES DURING THE RELEVANT FINANCIAL YEAR. IT WAS SUBMITTED THAT DURING THE RELEVANT FINANCIAL YEAR, THERE WERE PECULIAR ECONOMIC CIRCUMSTANCES SUCH AS ACQUISITIONS. IT WAS ALSO SUBMITTED THAT QUINTEGRA SOLUTIONS LTD., HOLDS INTANGIBLES SUCH AS TRADEMARK, REGISTRATIONS FOR PRODUCTS. 16 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. C) SOFTSOL LTD., IS BOTH FUNCTIONALLY DIFFERENT AS WEL L AS FAILS RPT FILTER AS HELD BY THE TRIBUNAL IN THE CASE OF 3DPLM. 7.3. WE FIND THAT THE FACTS AND CIRCUMSTANCES BEFORE US ARE SIMILAR AND ARE FOR THE VERY SAME A.Y . BOTH IN THE CASE OF THE ASSESSEE COMPANY AS WELL AS NTT DATA INDIA ENTERPRISE APPLICATION SERVICES P. LTD., (CIT ED SUPRA) AND THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO RELIE D UPON THE DECISION OF THIS TRIBUNAL IN THE CASE OF 3DPLM SOFTWARE SOLUTIONS P. LTD., (CITED SUPRA), WHEREIN THESE COMPANIES WERE HELD TO BE NOT COMPARABLE IN THE FOLLOWING PARAGRAPHS: 17. PERSISTENT SYSTEMS LTD. 17.1.1. THIS COMPANY WAS SELECTED BY THE TPO AS A COMPARABLE. THE ASSESSEE OBJECTED TO THE INCLUSION OF THIS COMPANY AS A COMPARABLE FOR THE REASONS THAT THIS COMPANY BEING ENGAGED IN SOFTWARE PRODUCT DESIGNING AND ANALYTIC SERVICES, IT IS FUNCTIONALLY DIFFEREN T AND FURTHER THAT SEGMENTAL RESULTS ARE NOT AVAILABLE. T HE TPO REJECTED THE ASSESSEE'S OBJECTIONS ON THE GROUND TH AT AS PER THE ANNUAL REPORT FOR THE COMPANY FOR FINANCIAL YEAR 2007-08, IT IS MAINLY A SOFTWARE DEVELOPMENT COMPAN Y AND AS PER THE DETAILS FURNISHED IN REPLY TO THE NO TICE UNDER SECTION 133(6) OF THE ACT, SOFTWARE DEVELOPME NT CONSTITUTES 96% OF ITS REVENUES. IN THIS VIEW OF TH E MATTER, THE ASSESSING OFFICER INCLUDED THIS COMPANY I.E. PE RSISTENT SYSTEMS LTD., IN THE LIST OF COMPARABLES AS IT QUAL IFIED THE FUNCTIONALITY CRITERION. 17.1.2. BEFORE US, THE ASSESSEE OBJECTED TO THE INCLUSION OF THIS COMPANY AS A COMPARABLE SUBMITTIN G THAT THIS COMPANY IS FUNCTIONALLY DIFFERENT AND ALSO THA T THERE ARE SEVERAL OTHER FACTORS ON WHICH THIS COMPANY CAN NOT BE TAKEN AS A COMPARABLE. IN THIS REGARD, THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT : 17 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. (I) THIS COMPANY IS ENGAGED IN SOFTWARE DESIGNING SERVICES AND ANALYTIC SERVICES AND THEREFORE IT IS NOT PURELY A SOFTWARE DEVELOPMENT SERVICE PROVIDER AS I S THE ASSESSEE IN THE CASE ON HAND. (II) PAGE 60 OF THE ANNUAL REPORT OF THE COMPANY F OR F.Y. 2007-08 INDICATES THAT THIS COMPANY, IS PREDOMINANTLY ENGAGED IN OUTSOURCED SOFTWARE PRODU CT DEVELOPMENT SERVICES FOR INDEPENDENT SOFTWARE VEND ORS AND ENTERPRISES. (III) WEBSITE EXTRACTS INDICATE THAT THIS COMPANY IS IN THE BUSINESS OF PRODUCT DESIGN SERVICES. (IV) THE ITAT, MUMBAI BENCH IN THE CASE OF TELECOR DIA TECHNOLOGIES INDIA PVT. LTD. (SUPRA) WHILE DISCUSSI NG THE COMPARABILITY OF ANOTHER COMPANY, NAMELY LUCID SOFT WARE LTD. HAD RENDERED A FINDING THAT IN THE ABSENCE OF SEGMENTAL INFORMATION, A COMPANY BE TAKEN INTO ACC OUNT FOR COMPARABILITY ANALYSIS. THIS PRINCIPLE IS SQUAR ELY APPLICABLE TO THE COMPANY PRESENTLY UNDER CONSIDERA TION, WHICH IS INTO PRODUCT DEVELOPMENT AND PRODUCT DESIG N SERVICES AND FOR WHICH THE SEGMENTAL DATA IS NOT AVAILABLE. THE LEARNED AUTHORISED REPRESENTATIVE PR AYS THAT IN VIEW OF THE ABOVE, THIS COMPANY I.E. PERSIS TENT SYSTEMS LTD. BE OMITTED FROM THE LIST OF COMPARABLE S. 17.2 PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORT THE ACTION OF THE TPO IN INC LUDING THIS COMPANY IN THE LIST OF COMPARABLES. 17.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RE CORD. IT IS SEEN FROM THE DETAILS ON RECORD THAT THIS CO MPANY I.E. PERSISTENT SYSTEMS LTD., IS ENGAGED IN PRODUCT DEVELOPMENT AND PRODUCT DESIGN SERVICES WHILE THE ASSESSEE IS A SOFTWARE DEVELOPMENT SERVICES PROVIDE R. WE FIND THAT, AS SUBMITTED BY THE ASSESSEE, THE SEGMEN TAL DETAILS ARE NOT GIVEN SEPARATELY. THEREFORE, FOLLOW ING THE PRINCIPLE ENUNCIATED IN THE DECISION OF THE MUMBAI TRIBUNAL IN THE CASE OF TELECORDIA TECHNOLOGIES IND IA PVT. LTD. (SUPRA) THAT IN THE ABSENCE OF SEGMENTAL DETAILS/INFORMATION A COMPANY CANNOT BE TAKEN INTO ACCOUNT FOR COMPARABILITY ANALYSIS, WE HOLD THAT TH IS COMPANY I.E. PERSISTENT SYSTEMS LTD. OUGHT TO BE OM ITTED 18 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. FROM THE SET OF COMPARABLES FOR THE YEAR UNDER CONSIDERATION. IT IS ORDERED ACCORDINGLY. 18. QUINTEGRA SOLUTIONS LTD. 18.1 THIS CASE WAS SELECTED BY THE TPO AS A COMPARABLE. BEFORE THE TPO, THE ASSESSEE OBJECTED T O THE INCLUSION OF THIS COMPANY IN THE SET OF COMPARABLES ON THE GROUND THAT THIS COMPANY IS FUNCTIONALLY DIFFERENT AND ALSO THAT THERE WERE PECULIAR ECONOMIC CIRCUMSTANCE S IN THE FORM OF ACQUISITIONS MADE DURING THE YEAR. THE TPO REJECTED THE ASSESSEE'S OBJECTIONS HOLDING THAT THI S COMPANY QUALIFIES ALL THE FILTERS APPLIED BY THE TP O. ON THE ISSUE OF ACQUISITIONS, THE TPO REJECTED THE ASS ESSEE'S OBJECTIONS OBSERVING THAT THE ASSESSEE HAS NOT ADDU CED ANY EVIDENCE AS TO HOW THIS EVENT HAD AN ANY INFLUE NCE ON THE PRICING OR THE MARGIN EARNED. 18.1.2. BEFORE US, THE ASSESSEE OBJECTED TO THE INCLUSION OF THIS COMPANY FOR THE REASON THAT IT IS FUNCTIONALLY DIFFERENT AND ALSO THAT THERE ARE OTHE R FACTORS FOR WHICH THIS COMPANY CANNOT BE CONSIDERED AS A COMPARABLE. IT WAS SUBMITTED THAT, (I) QUINTEGRA SOLUTIONS LTD., THE COMPANY UNDER CONSIDERATION, IS ENGAGED IN PRODUCT ENGINEERING SERVICES AND NOT IN PURELY SOFTWARE DEVELOPMENT SERVICES. THE ANNUAL REPORT OF THIS COMPANY ALSO STATES THAT IT IS ENGAGED IN PREPARATORY SOFTWARE PRODUCTS AND IS THEREFORE NOT SIMILAR TO THE ASSESSEE IN THE CASE ON HAND. (II) IN ITS ANNUAL REPORT, THE SERVICES RENDERED BY THE COMPANY ARE DESCRIBED AS UNDER : LEVERAGING ITS PROVEN GLOBAL MODEL, QUINTEGRA PROVIDES A FULL RANGE OF CUSTOM IT SOLUTIONS (SUCH AS DEVELOPMENT, TESTING, MAINTENANCE, SAP, PRODUCT ENGINEERING AND INFRASTRUCTURE MANAGEMENT SERVICES), PROPRIETARY SOFTWARE PRODUCTS AND CONSULTANCY SERVICES IN IT ON VARIOUS PLATFORMS AND TECHNOLOGIES. (III) THIS COMPANY IS ALSO ENGAGED IN RESEARCH AND DEVELOPMENT ACTIVITIES WHICH RESULTED IN THE CREATION OF INTELLECTUAL PROPRIETARY RIGHTS (IPRS) AS 19 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. CAN BE EVIDENCED FROM THE STATEMENTS MADE IN THE ANNUAL REPORT OF THE COMPANY FOR THE PERIOD UNDER CONSIDERATION, WHICH IS AS UNDER : QUINTEGRA HAS TAKEN VARIOUS MEASURES TO PRESERVE ITS INTELLECTUAL PROPERTY. ACCORDINGLY, SOME OF THE PRODUCTS DEVELOPED BY THE COMPANY HAVE BEEN COVERED BY THE PATENT RIGHTS. THE COMPANY HAS ALSO APPLIED FOR TRADE MARK REGISTRATION FOR ONE OF ITS PRODUCTS, VIZ. INVESTOR PROTECTION INDEX FUND (IPIF). THESE MEASURES WILL HELP THE COMPANY ENHANCE ITS PRODUCTS VALUE AND ALSO MITIGATE RISKS. (IV) THE TPO HAS APPLIED THE FILTER OF EXCLUDING COMPANIES HAVING PECULIAR ECONOMIC CIRCUMSTANCES. QUINTEGRA FAILS THE TPOS OWN FILTER SINCE THERE HA VE BEEN ACQUISITIONS IN THIS CASE, AS IS EVIDENCED FRO M THE COMPANYS ANNUAL REPORT FOR F.Y. 2007-08, THE PERIOD UNDER CONSIDERATION. THE LEARNED AUTHORISED REPRESENTATIVE PRAYS THAT IN VIEW OF THE SUBMISSIONS MADE ABOVE, IT IS CLEAR THAT INTER ALIA, THIS COMPANY I.E. QUINTEGRA SOLUTI ONS LTD. BEING FUNCTIONALLY DIFFERENT AND POSSESSING IT S OWN INTANGIBLES / IPRS, IT CANNOT BE CONSIDERED AS A COMPARABLE TO THE ASSESSEE IN THE CASE ON HAND AND THEREFORE OUGHT TO BE EXCLUDED FROM THE LIST OF COMPARABLES FOR THE PERIOD UNDER CONSIDERATION. 18.2. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ACTION OF THE TPO IN INCLUDING THIS COMPANY IN THE SET OF COMPARABLES TO THE ASSESSEE FOR THE PERIOD UNDER CONSIDERATION. 18.3.1. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RE CORD. IT IS SEEN FROM THE DETAILS BROUGHT ON RECORD THAT THIS COMPANY I.E. QUINTEGRA SOLUTIONS LTD. IS ENGAGED IN PRODUCT ENGINEERING SERVICES AND IS NOT PURELY A SO FTWARE 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 20 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. INTANGIBLE ASSETS. THE CO-ORDINATE BENCH OF THIS TR IBUNAL IN THE CASE OF 24/7 CUSTOMER.COM PVT. LTD. (ITA NO.227/BANG/2010 DT.9.11.2012) HAS HELD THAT IF A COMPANY POSSESSES OR OWNS INTANGIBLES OR IPRS, THEN IT CANNOT BE CONSIDERED AS A COMPARABLE COMPANY TO ONE THAT DOES NOT OWN INTANGIBLES AND REQUIRES TO BE OM ITTED FORM THE LIST OF COMPARABLES, AS IN THE CASE ON HAN D. 18.3.2. WE ALSO FIND FROM THE ANNUAL REPORT OF QUINTEGRA SOLUTIONS LTD. THAT THERE HAVE BEEN ACQUI SITIONS MADE BY IT IN THE PERIOD UNDER CONSIDERATION. IT IS SETTLED PRINCIPLE THAT WHERE EXTRAORDINARY EVENTS HAVE TAKE N PLACE, WHICH HAS AN EFFECT ON THE PERFORMANCE OF TH E COMPANY, THEN THAT COMPANY SHALL BE REMOVED FROM TH E LIST OF COMPARABLES. 18.3.3. RESPECTFULLY FOLLOWING THE DECISION OF THE CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF 24/7 CUSTOMER.COM PVT. LTD. (SUPRA), WE DIRECT THAT THIS COMPANY I.E. QUINTEGRA SOLUTIONS LTD. BE EXCLUDED F ROM THE LIST OF COMPARABLES IN THE CASE ON HAND SINCE I T IS ENGAGED IN PROPRIETARY SOFTWARE PRODUCTS AND OWNS I TS OWN INTANGIBLES UNLIKE THE ASSESSEE IN THE CASE ON HAND WHO IS A SOFTWARE SERVICE PROVIDER. 19. SOFTSOL INDIA LTD. 19.1. THIS COMPANY WAS SELECTED BY THE TPO AS A COMPARABLE. THE ASSESSEE OBJECTED TO THE INCLUSION OF THIS COMPANY AS A COMPARABLE ON THE GROUNDS THAT THIS COMPANY IS FUNCTIONALLY DIFFERENT AND DIS-SIMILAR F ROM IT. THE TPO REJECTED THE ASSESSEE'S OBJECTIONS ON THE G ROUND THAT AS PER THE COMPANYS REPLY TO THE NOTICE UNDER SECTION 133(6) OF THE ACT, THE COMPANY HAS CATEGORI ZED ITSELF AS A PURE SOFTWARE DEVELOPER AND THEREFORE I NCLUDED THIS COMPANY AS A COMPARABLE AS THE ASSESSEE WAS AL SO A PROVIDER OF SOFTWARE DEVELOPMENT SERVICES. BEFORE US, IN ADDITION TO THE PLEA THAT THE COMPANY WAS FUNCTIONA LLY DIFFERENT, THE ASSESSEE SUBMITTED THAT THIS COMPANY WAS EXCLUDED FROM THE LIST OF COMPARABLES BY THE ORDER OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSEE' S OWN CASE FOR ASSESSMENT YEAR 2007-08 (ITA NO.845/BANG/2011) ON THE GROUND THAT THE RELATED P ARTY TRANSACTIONS (RPT) IS IN EXCESS OF 15%. THE LEARN ED AUTHORISED REPRESENTATIVE SUBMITTED THAT FOR THE CU RRENT PERIOD UNDER CONSIDERATION, THE RPT IS 18.3% AND 21 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. THEREFORE THIS COMPANY REQUIRES TO BE OMITTED FROM THE LIST OF COMPARABLES. 19.2. PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ACTION OF THE TPO IN INCLUDING THIS COMPANY IN THE LIST OF COMPARABLES A S THIS COMPANY WAS A PURE SOFTWARE DEVELOPMENT SERVICE PROVIDER LIKE THE ASSESSEE. 19.3. WE HAVE HEARD BOTH PARTIES AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. WE FIN D THAT THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSES SEE'S OWN CASE FOR ASSESSMENT YEAR 2007-08 IN ITA NO.845/BANG/2011 HAS EXCLUDED THIS COMPANY FROM THE SET OF COMPARABLES FOR THE REASON THAT RPT IS IN EX CESS OF 15% FOLLOWING THE DECISION OF ANOTHER BENCH OF THIS TRIBUNAL IN THE CASE OF 24/7 CUSTOMER.COM PVT. LTD. IN ITA NO.227/BANG/2011. AS THE FACTS FOR THIS YEAR AR E SIMILAR AND MATERIAL ON RECORD ALSO INDICATES THAT RPT IS 18.3%, FOLLOWING THE AFORE CITED DECISIONS OF THE C O- ORDINATE BENCHES (SUPRA), WE HOLD THAT THIS COMPANY IS TO BE OMITTED FROM THE LIST OF COMPARABLES TO THE ASSE SSEE IN THE CASE ON HAND. 7.4. THEREFORE, RESPECTFULLY FOLLOWING THE DECISIO NS OF THE COORDINATE BENCH OF THE TRIBUNAL (SUPRA), WE DIRECT THAT THESE COMPANIES BE EXCLUDED FROM THE LIST OF F INAL COMPARABLES. 8. IN ADDITION TO THE ABOVE, THE ASSESSEE IS ALSO SEEKING INCLUSION OF THE FOLLOWING COMPANIES VIZ., (1) CG- VAK AND (2) SIP TECHNOLOGIES LTD., IN THE FINAL LIS T OF COMPARABLES. THE ASSESSEE HAS RELIED UPON THE DECIS ION OF THE TRIBUNAL AT BANGALORE IN THE CASE OF CISCO SYST EMS INDIA P. LTD., ITA.NO.271/BANG/2014 FOR A DIRECTION TO THE TPO TO CONSIDER THE INCLUSION CG-VAK COMPANY AS COMPARABLE. HE HAS SUBMITTED THAT THE TPO HAD EXCLU DED THIS COMPANY ON THE GROUND THAT IT FAILS EMPLOYEE C OST 22 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. FILTER AND THAT EMPLOYEE COST DETAILS ARE NOT PROVI DED IN THE ANNUAL REPORT. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS CONTENTION OF THE TPO IS NOT CO RRECT AS THE EMPLOYEE COST DETAILS WERE CATEGORISED AS COST OF SERVICES AND THE SUB-HEADS UNDER THE COST OF SERVIC ES AND IF THEY ARE TAKEN INTO CONSIDERATION, THE EMPLOYEE COST WOULD BE 78.02% AND THEREFORE, IT WOULD SATISFY THE EMPLOYEE COST FILTER. HE HAS SUBMITTED THAT THE TRI BUNAL IN THE CASE OF CISCO SYSTEMS INDIA P. LTD., (SUPRA) , HAS TAKEN THIS FILTER INTO CONSIDERATION AND HAD GIVEN A DIRECTION TO THE TPO TO RECONSIDER THE INCLUSION OF THE SAME IN THE FINAL LIST OF COMPARABLES. SIMILARLY, IN THE CASE OF SIP TECHNOLOGIES LTD., THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TPO REJECTED THIS COMPA NY ON THE GROUND THAT IT HAS ABNORMAL ACTIVITY AND HAS DIMINISHING REVENUE. THE LD. COUNSEL FOR THE ASSESS EE REFERRED TO THE ANNUAL REPORT OF THE SIP TECHNOLOGI ES LTD., TO DEMONSTRATE THAT INVESTMENT IN SIPTECH SOLUTIONS LTD., EXISTED DURING F.Y. 2006-07 AND NOT RELEVANT TO A.Y. 2008-2009. HE FURTHER SUBMITTED THAT THE TPO HAS SELECTED THIS COMPANY AS A COMPARABLE IN THE YEAR I N WHICH THE INVESTMENT WAS MADE AND HAS ERRONEOUSLY REJECTED THE SAME IN THE SUBSEQUENT YEAR BY CHANGIN G HIS STAND. HE SUBMITTED THAT THE COMPANY WAS HAVING MAR GIN OF 13.90% AS IN THE A.Y. 2007-08 AND THEREFORE, THE TPO CANNOT APPLY THE DIMINISHING REVENUE FILTER FOR THE RELEVANT ASSESSMENT YEAR. 23 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. 9. THE LD. D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF THE TPO. 10. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE TPO APPEARS TO HAVE REJECTED THESE TWO COMPANIES AS COMPARABLES ON THE BASIS OF MATERIAL AVAILABLE BEFORE HIM OR AS ANALYSED BY HIM. SINCE THE ASSESSEE HAS BROUGHT OUT THE FACTUAL INCONSISTENCIES IN THE ORDER OF THE TPO, WE DEEM IT FIT TO REMIT THE MATTER TO THE FILE OF TPO/A.O. FOR RECONSIDERATION AS TO WHETHER THESE COMPANIES ARE COMPARABLE TO THE ASSESSEE. NEEDLESS TO MENTION THA T THE ASSESSEE SHALL BE GIVEN A FAIR OPPORTUNITY OF HEARI NG. GROUND NO.2 IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 11. THE ASSESSEE HAS ALSO RAISED AN ADDITIONAL GROUND THAT THE TPO HAS ERRED IN MAKING A NEGATIVE WORKING CAPITAL ADJUSTMENT OF -3.84% WHILE COMPUTIN G THE ADJUSTMENT UNDER SECTION 92CA OF THE INCOME TAX ACT, 1961. SINCE IT IS A LEGAL GROUND, IT IS ADMITT ED AND ADJUDICATED AS UNDER. 11.1. IT IS THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE TRIBUNAL IN THE CASE OF ADAPTEC I NDIA P. LTD., HAS HELD THAT NEGATIVE WORKING CAPITAL ADJUST MENT SHOULD NOT BE MADE IN THE CASE OF CAPTIVE SERVICE P ROVIDER, WHILE COMPUTING THE ADJUSTMENT UNDER SECTION 92CA O F THE ACT. THE LD. COUNSEL FOR THE ASSESSEE HAS FILED COPY OF THE DECISION OF THIS TRIBUNAL IN THE CASE OF ADAPTE C INDIA 24 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. P. LTD., WHEREIN AT PAGE NO.20 AT PARA-11 OF THE OR DER SUCH A DIRECTION WAS GIVEN BY THE TRIBUNAL. 12. HAVING REGARD TO THE RIVAL CONTENTIONS, WE DEEM IT FIT AND PROPER TO REMIT THIS ISSUE ALSO TO THE FILE OF THE TPO FOR RECONSIDERATION IN ACCORDANCE WITH THE JUDICIAL PRECEDENTS ON THE ISSUE. THE ADDITIONAL GR OUND OF THE APPEAL IS ACCORDINGLY ALLOWED FOR STATISTICAL P URPOSES. 13. THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO RAISED AN ARGUMENT THAT THE PROVISION FOR BAD AND DOUBTFUL DEBTS FORMS PART OF THE OPERATING COST OF THE COMPANY AND THEREFORE, SHOULD BE CONSIDERED AS OPERATING COST AND IN SUPPORT OF THIS CONTENTION, T HE LD. COUNSEL FOR THE ASSESSEE, HAS PLACED RELIANCE UPON THE DECISION OF THE TRIBUNAL IN THE CASE OF KENOXA TECHNOLOGIES LTD., ITA.NO.234/HYD/2014 AND SONY IND IA PRIVATE LIMITEDD ITA.NOS. 1189/DEL/2005 AND 819 AND 820/DEL/2007 RESPECTIVELY. HOWEVER, WE DO NOT FIND ANY GROUND OF APPEAL RELATING TO THIS ISSUE RAISED IN F ORM NO.36. IN VIEW OF THE SAME, WE ARE NOT INCLINED TO ACCEPT THIS ARGUMENT OF THE ASSESSEE AND IT IS ACCORDINGLY , REJECTED. 14. AS REGARDS GROUND NO.4, REGARDING LEVY OF INTEREST UNDER SECTION 234B OF THE ACT, WE FIND THA T IT IS CONSEQUENTIAL IN NATURE AND THEREFORE, THE A.O./TPO IS DIRECTED TO GIVE CONSEQUENTIAL RELIEF, IF ANY, TO T HE ASSESSEE, IN ACCORDANCE WITH LAW. 25 ITA.NO.1810/HYD/2012 INTOTO SOFTWARE INDIA P. LTD., HYDERABAD. 15. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 09.12 .2015. SD/- SD/- (B. RAMAKOTAIAH) (SMT. P. MADHAVI DEVI) ACOUNTANT MEMBER JUDICIALMEMBER HYDERABAD, DATED 09 TH DECEMBER, 2015 VBP/- COPY TO : 1. INTOTO SOFTWARE INDIA P. LTD., 1 - 10 - 20/2B, 4 TH FLOOR, POOJA EDIFICE, CHIKOTI GARDENS, BEGUMPET, HYDERABAD . 2. THE INCOME TAX OFFICER, WARD - 2 ( 1 ), HYDERABAD. 3. DISPUTES RESOLUTION PANEL , 2 ND FLOOR, I.T. T OWERS, 10 - 2-3, A.C. GUARDS, HYDERABAD 500 004. 4 . DIRECTOR OF INCOME TAX, INTERNATIONAL TAXATION , HYDERABAD. 5 . ADDL. COMMISSIONER OF INCOME TAX, TRANSFER PRICING, HYDERABAD. 6 . D.R. ITAT B BENCH, HYDERABAD. 7. GUARD FILE