M/s. Ocwen Financial Solutions Private Limited, Bengaluru V. Joint Commissioner Of Income Tax, Special Range-5, Bengaluru

ITA 2292/BANG/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 1052 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 23-06-2021
• Assessment Year: 2010-2011
• Appeal Filed On: 31-10-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KANNAN NARAYANAN D RS
• Assessee Lawyers: K R VASUDEVAN
• Keywords: Capital asset; Recovery proceedings; Business income; Transfer pricing; Business expenditure; International transaction; Wholly owned subsidiary; Revenue expenditure; Capital expenditure; Set aside; CHAPTER IV
• Section: 92C; 143(3); 10AA; 133(6); 37(1); 10B; 48; 72; 13; 22

Judgement Text

ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.153/BANG/2017 ASSESSMENT YEAR : 2012-13 OCWEN FINANCIAL SOLUTIONS PVT. LTD. PRITECH PARK, SURVEY NO.51 TO 64/4 BLOCK NO.12, 5 TH FLOOR OF B WING & 6 TH FLOOR OF A WING, BELLANDUR VILLAGE, MARATHAHALLI RING ROAD, BENGALURU 560 103 PAN NO : AAACO3764E VS. ACIT CIRCLE- 5(1)(2) BENGALURU APPELLANT RESPONDENT ITA NO.2292/BANG/2019 ASSESSMENT YEAR : 2010-11 OCWEN FINANCIAL SOLUTIONS PVT. LTD. BANGALORE VS. JCIT SPL.RANGE-5 BANGALORE APPELLANT RESPONDENT APPELLANT BY : SHRI K.R. VASUDEVAN, A.R. RESPONDENT BY : MS. NEERA MALHOTRA & SHRI KANNAN NARAYANAN, D.RS DATE OF HEARING : 23.06.2021 DATE OF PRONOUNCEMENT : 12.07.2021 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER: THE ASSESSEE HAS FILED THESE APPEALS RELATING TO AY 2010-11 AND 2012-13. THE APPEAL FILED FOR AY 2010-11 IS DI RECTED AGAINST THE ORDER DATED 30-08-2019 PASSED BY LD CIT(A)_10, BENG ALURU. THE APPEAL FILED FOR AY 2012-13 IS DIRECTED AGAINST THE ASSESSMENT ORDER DATED 23-11-2016 PASSED BY THE ASSESSING OFFICER U/ S 143(3) R.W.S 144C(13) IN PURSUANCE OF DIRECTIONS GIVEN BY LD DIS PUTE RESOLUTION PANEL (DRP). ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 2 OF 26 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF P ROVIDING IT ENABLED SERVICES (ITES), I.E., PROVIDING BACKEND OPERATIONS LIKE PAYROLL PROCESSING, DOCUMENT IMAGING, LOAN ACCOUNTING ETC., TO ITS ASSOCIATED ENTERPRISES (AE). THE ASSESSEE HEREIN IS A WHOLLY OWNED SUBSIDIARY OF M/S OCWEN ASIA HOLDINGS LIMITED, MAURITIUS. 3. WE SHALL FIRST TAKE UP THE APPEAL FILED FOR AY 2010-11. ONLY ISSUE URGED IN THIS APPEAL IS WHETHER THE LD CIT(A) WAS RIGHT IN LAW IN HOLDING THAT THE INTEREST INCOME EARNED FROM DEP OSITS KEPT IN BANKS FOR AVAILING BANK GUARANTEES IS ASSESSABLE UN DER THE HEAD INCOME FROM OTHER SOURCES. 4. THIS IS SECOND ROUND OF PROCEEDINGS. IN THE EARLIER ROUND, THE TRIBUNAL HAS RESTORED THIS ISSUE TO THE FILE OF AO, VIDE ITS ORDER DATED 19-05-2017 PASSED IN ITA NO.863/BANG/2016. THE TRI BUNAL DIRECTED THE AO TO DETERMINE THE PURPOSE FOR WHICH THE DEPOSITS WERE KEPT IN BANKS AND DECIDE THE ISSUE ON THE BASIS OF RATIO LAID DOWN IN THE CASE OF MOTOROLA INDIA ELECTRONICS LTD (2014)(2 25 TAXMAN 11) BY HONBLE KARNATAKA HIGH COURT. THE RELEVANT OBSERVA TIONS MADE BY THE TRIBUNAL IN THE FIRST ROUND ARE EXTRACTED BELOW :- THUS IN CASE IF THE INTEREST INCOME IS EARNED FRO M THE DEPOSITS MADE IN CONNECTION WITH THE BUSINESS ACTIVITY OF THE UNDERT AKING THEN THE SAME IS ELIGIBLE FOR DEDUCTION UNDER SECTION 10A/10B OF THE ACT. IN THE CASE OF THE ASSESSEE NEITHER THE ASSESSING OFFICER NOR THE CIT (APPEALS) HAS VERIFIED THIS FACT THOUGH THE ASSESSEE IN ITS REPLY BEFORE THE AS SESSING OFFICER HAS MENTIONED THAT THE INTEREST INCOME IS EARNED ON DEP OSITS MADE FOR SECURING BANK GUARANTEE. ACCORDINGLY, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ASSESSING OFFICER IS DIRECTED TO VERIFY T HE FACT THAT THE INTEREST INCOME IN QUESTION HAS BEEN EARNED FROM THE DEPOSIT S MADE FOR SECURING THE BANK GUARANTEE AND THEN DECIDE THE ISSUE IN THE LIG HT OF DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MO TOROLA INDIA ELECTRONICS P LTD (SUPRA). ACCORDINGLY, THE IMPUGNED ASSESSMENT ORDER CAME TO BE PASSED BY THE AO. ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 3 OF 26 5. BEFORE THE AO, THE ASSESSEE SUBMITTED THE DET AILS OF BANK GUARANTEES, FOR WHICH THE DEPOSITS HAD BEEN MADE AS UNDER:- (A) BANK GUARANTEE IN FAVOUR OF INCOME TAX DEPARTM ENT RS.7,95,85,318/-. (B) BANK GUARANTEE FOR AVAILING DUTY BENEFITS UND ER CUSTOMS ACT RS.42,92,970/- THE ASSESSEE ALSO SUBMITTED THAT IT IS HAVING THREE UNDERTAKINGS VIZ., MUMBAI UNDERTAKING, BANGALORE UNDERTAKING AND GOA U NDERTAKING. IT FURTHER SUBMITTED THAT ALL THE THREE UNITS ARE A VAILING DEDUCTION U/S 10A OF THE ACT. ACCORDINGLY, IT WAS SUBMITTED THAT THERE IS NEXUS BETWEEN THE BANK DEPOSITS AND BUSINESS OF UNDERTAKI NG. THE ASSESSEE PLACED ITS RELIANCE ON THE DECISION RENDER ED BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF HEWLETT PACKARD GLOBAL SOFT LTD (ITA NO.812/2007 DATED 30-10-2017). 6. THE AO DID NOT ACCEPT THE SUBMISSIONS OF TH E ASSESSEE. HE TOOK THE VIEW THAT THE DEDUCTION U/S 10A OF THE ACT IS GIVEN TO THE PROFITS AND GAINS DERIVED BY AN UNDERTAKING, WHER E AS THE INCOME TAX LIABILITY IS FASTENED UPON THE ASSESSEE, WHICH OWNS THOSE UNDERTAKINGS. HE NOTICED THAT THE INTEREST INCOME H AS ACCRUED/RECEIVED TO/BY THE ASSESSEE FROM THE DEPOSI TS KEPT WITH BANK FOR AVAILING BANK GUARANTEES AND THOSE BANK GU ARANTEES HAVE BEEN GIVEN IN FAVOUR OF INCOME TAX DEPARTMENT TOWAR DS THE INCOME TAX LIABILITY OF THE ASSESSEE. ACCORDINGLY, THE AO TOOK THE VIEW THAT THE INTEREST INCOME IS NOT RELATED TO ANY PARTICULA R UNDERTAKING AND HENCE IT CANNOT BE CONSIDERED AS INCOME DERIVED FRO M ANY ONE UNDERTAKING. THE AO HELD THAT THE DECISION RENDER ED BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF HEWLETT PACKARD GLOBAL SOFT LTD (SUPRA) IS NOT APPLICABLE TO THE FACTS OF THE PRESE NT CASE. HE ALSO OBSERVED THAT, IN THE CASE BEFORE HONBLE KARNATAKA HIGH COURT, THE INTEREST INCOME WAS AN INCIDENTAL INCOME EARNED FRO M DEPOSITS MADE OUT OF SURPLUS FUNDS OF THE UNDERTAKING AND ON ADVA NCES GIVEN TO ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 4 OF 26 STAFFS. HENCE IT WAS RELATED TO THE BUSINESS OF TH E UNDERTAKING, WHICH WAS ELIGIBLE FOR DEDUCTION U/S 10A OF THE ACT. 7. THE AO ALSO OBSERVED THAT THE PRESENT ASSES SMENT HAS BEEN DONE AS PER THE ORDER PASSED BY THE ITAT, WHICH HAS RESTORED THE ISSUE TO HIS FILE WITH THE LIMITED PURPOSE OF EXAMI NING THE APPLICABILITY OF DECISION RENDERED IN THE CASE OF M OTOROLA INDIA ELECTRONICS LTD (SUPRA) ONLY. HENCE THE AO OBSERVE D THAT THE ASSESSEE COULD NOT RELY UPON THE DECISION RENDERED IN THE CASE OF HEWLETT PACKARD GLOBAL SOFT LTD (SUPRA). IN SPITE OF THIS LEGAL POSITION, THE AO HELD THAT HE HAS EXAMINED THE ABOV E SAID DECISION AND DISTINGUISHED THE SAME. ACCORDINGLY, THE AO HE LD THAT INTEREST DERIVED ON THE BANK DEPOSITS MADE FOR AVAILING BANK GUARANTEES CANNOT BE CONSIDERED AS DERIVED FROM THE BUSINESS O F UNDERTAKING. ACCORDINGLY, THE AO HELD AS UNDER:- 7. IN VIEW OF THE ABOVE, THE INTEREST INCOME OF RS.67,86,002/- EARNED ON FIXED DEPOSITS MADE WITH BANKS (WHICH HAVE MAJORLY BEEN USED TO MAKE BANK GUARANTEES) IS INCOME FROM OTHER SOURCES. ACCORDINGLY, THE AO REJECTED THE CLAIM FOR ASSESSIN G THE ABOVE SAID INTEREST INCOME UNDER THE HEAD INCOME FROM BUSINES S AND ACCORDINGLY ASSESSED THE SAME UNDER THE HEAD INCOM E FROM OTHER SOURCES. IT IS PERTINENT TO NOTE THAT THE AO DID NOT ADDRESS THE DEPOSITS RELATABLE TO BANK GUARANTEES GIVEN FOR CUS TOMS LIABILITY. 8. THE LD CIT(A) ALSO CONFIRMED THE DECISION OF THE AO WITH THE FOLLOWING OBSERVATIONS:- 5.6 AS DISCUSSED EARLIER, FIXED DEPOSITS WERE US ED BY THE APPELLANT FOR GIVING BANK GUARANTEE TO THE EXTENT OF RS.7,95,85,3 18/- TO THE INCOME TAX DEPARTMENT FOR KEEPING RECOVERY OF TAX IN ABEYANCE AS WELL AS AVAILING DUTY BENEFITS UNDER CUSTOMS ACT TO THE EXTENT OF RS.42,9 2,970/-. THEREFORE, THE AO HAS RIGHTLY HELD THAT FIXED DEPOSITS WERE USED F OR NON-BUSINESS PURPOSES AND FOR EARNING INTEREST INCOME. HENCE, THERE IS N O INFIRMITY IN THE ORDER OF THE AO. ACCORDINGLY, THE ADDITION OF RS.67,86,002/ - IS CONFIRMED. ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 5 OF 26 AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL. 9. THE LD A.R SUBMITTED THAT THE ASSESSEE IS CA RRYING ON BUSINESS THROUGH THREE UNDERTAKINGS AND ALL OF THEM ARE ELIG IBLE FOR DEDUCTION U/S 10A OF THE ACT. ACCORDINGLY HE SUBMITTED THAT THE BANK DEPOSITS SHOULD BE CONSIDERED AS RELATED TO ALL THE THREE UN DERTAKINGS. ACCORDINGLY, HE SUBMITTED THAT THE DECISION RENDERE D BY HONBLE JURISDICTIONAL KARNATAKA HIGH COURT IN THE CASE OF HEWLETT PACKARD GLOBAL SOFT LTD (SUPRA) SHALL APPLY TO THE FACTS OF THE PRESENT CASE ALSO. 10. THE LD D.R, ON THE CONTRARY, SUPPORTED THE O RDER PASSED BY LD CIT(A). 11. WE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORD. WE HAVE ALSO GONE THROUGH THE DECISION RENDERED IN THE CASE OF HEWLETT PACKARD GLOBAL SOFT LTD (SUPRA). AS OBSERVED BY TH E AO, THE FACTS PREVAILING IN THE ABOVE SAID CASE WERE RELATED TO INCIDENTAL INCOME BY WAY OF INTEREST INCOME ON THE TEMPORARILY PARKED FUNDS IN BANKS/ INTEREST ON STAFF LOANS. HENCE THE SAID INCOME WAS INTRICATELY LINKED TO THE BUSINESS OF THE UNDERTAKING, WHICH IS ELIGIB LE FOR DEDUCTION U/S 10A OF THE ACT. 12. IN THE INSTANT CASE, THE BANK DEPOSITS HAV E BEEN MADE FOR AVAILING BANK GUARANTEES TO BE GIVEN IN FAVOUR OF I NCOME TAX DEPARTMENT AND CUSTOMS DEPARTMENT. SO FAR AS, THE BANK GUARANTEES GIVEN IN FAVOUR OF INCOME TAX DEPARTMENT IS CONCERNED, WE AGREE WITH THE VIEW OF THE AO THAT THE LIABILITY TOWARDS INCOME TAX ARISES UPON THE ASSESSEE, WHICH OWNS ELIGIBLE UNDER TAKINGS. THE INCOME TAX LIABILITY ARISES UPON THE ASSESSEE ON TH E PROFITS ALREADY GENERATED BY THE UNDERTAKING. HENCE, THE DEPOSITS MADE FOR AVAILING SUCH BANK GUARANTEES, IN OUR VIEW, CANNOT BE LINKED WITH THE ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 6 OF 26 BUSINESS CARRIED ON BY THE UNDERTAKINGS. HENCE WE AGREE WITH THE VIEW OF THE TAX AUTHORITIES THAT THE INTEREST INCOM E EARNED ON BANK DEPOSITS MADE FOR SECURING BANK GUARANTEES IN FAVOU R OF INCOME TAX DEPARTMENT CANNOT BE CONSIDERED AS BUSINESS INCOME OF THE ELIGIBLE UNDERTAKING. ACCORDINGLY, THE SAME HAS BEEN RIGHTL Y ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES. 13. WE HAVE NOTICED THAT THE BANK GUARANTEES H AVE BEEN GIVEN IN FAVOUR OF CUSTOMS DEPARTMENT ALSO. IT IS STATED TH AT THE DEPOSITS TO THE EXTENT OF RS.42,92,970/- WAS MADE FOR AVAILING DUTY BENEFITS UNDER CUSTOMS ACT. THERE SHOULD NOT ANY DISPUTE TH AT THE TRANSACTIONS UNDER THE CUSTOMS ACT COULD BE LINKED TO A PARTICULAR UNDERTAKING, IN WHICH CASE, THE INTEREST INCOME EAR NED ON THE ABOVE SAID BANK DEPOSITS COULD BE LINKED TO ANY PARTICULA R ELIGIBLE UNDERTAKING. SINCE TRANSACTIONS UNDER CUSTOMS ACT ARE RELATED TO IMPORT/EXPORT ACTIVITIES CARRIED ON BY THE UNDERTAK INGS, WE ARE OF THE VIEW THAT THE DECISION RENDERED BY HONBLE JURISDIC TIONAL KARNATAKA HIGH COURT IN THE CASE OF HEWLETT PACKARD GLOBAL SO FT LTD (SUPRA) CAN BE APPLIED ON IT. ACCORDINGLY, THE INTEREST INCOME SHALL NORMALLY FORM PART OF BUSINESS INCOME OF THE UNDERTAKING. ACCORD INGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DIR ECT THE AO TO ASSESS INTEREST INCOME FROM BANK DEPOSITS FOR AVAIL ING DUTY BENEFITS UNDER CUSTOMS ACT AS BUSINESS INCOME OF THE RELEVAN T UNDERTAKING. THE ASSESSEE IS DIRECTED TO LINK THE BANK DEPOSITS WITH SPECIFIC UNDERTAKING SO THAT THE AO COULD WORK OUT DEDUCTION U/S 10A ACCORDINGLY. 14. NOW WE SHALL TAKE UP THE APPEAL FILED FOR AY 2012-13. THE LD A.R DID NOT PRESS GROUND NO.II(3) RELATING VALIDITY OF REDUCTION OF TRAVELLING & CONVEYANCE, LEGAL & PROFESSIONAL AND O THER EXPENSES INCURRED IN FOREIGN CURRENCY FROM EXPORT TURNOVER, WHILE COMPUTING ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 7 OF 26 DEDUCTION U/S SEC. 10AA OF THE ACT. THE REMAINING GROUNDS RELATE TO FOLLOWING ISSUES:- (A) TRANSFER PRICING ADJUSTMENT MADE (B) WHETHER FOREIGN EXCHANGE GAIN FORMS PART OF P ROFIT ELIGIBLE FOR DEDUCTION U/S 10AA (C) WHETHER BROUGHT FORWARD LOSSES ARE REQUIRED T O BE SET OFF FROM PROFITS BEFORE COMPUTING DEDUCTION U/S 10AA OF THE ACT. (D) DISALLOWANCE OF EXPENSES INCURRED ON BUY BAC K OF SHARES (E) NON-GRANTING OF BROUGHT FORWARD MAT CREDIT. (F) CHARGING OF INTEREST U/S 234C ON ASSESSED IN COME INSTEAD OF RETURNED INCOME. 15. THE FIRST ISSUE RELATES TO THE TRANSFER PRI CING ADJUSTMENT MADE IN RESPECT OF ITES SERVICES. THE ASSESSEE REPORTED A TURNOVER OF RS.216.78 CRORES FROM PROVIDING ITE SERVICES. THE ASSESSEE SELECTED TNM METHOD AS MOST APPROPRIATE METHOD AND OPERATING PROFIT/OPERATING COST (OP/OC) AS PROFIT LEVEL INDIC ATOR (PLI). THE TPO NOTICED THAT THE ASSESSEE HAS ARRIVED AT AVERAGE MA RGIN OF COMPARABLE COMPANIES BY CONSIDERING AVERAGE MARGIN OF 3 YEARS DATA. THE TPO REJECTED THE TRANSFER PRICING STUDY CONDUCTED BY THE ASSESSEE. THE TPO SELECTED FOLLOWING 10 COMPARABLE COMPANIES:- SL.NO. NAME OF THE CASE OPERATING INCOME OPERATING COST OP/OC 1. ACCENTIA TECHNOLOGIES LTD. 126,38,02,000 112,89,16,000 11.75 2. UNIVERSAL PRINT SYSTEMS LTD. (SEG)(BPO) 6,17,67,000 3,87,49,000 52.46 3. INFORMED TECHNOLOGIES INDIA LTD. 1,96,36,431 1,82,45,770 6.08 4. INFOSYS BPO LTD. 1316,75,11,974 962,91,06,964 36.30 5. JINDAL INTELLICOM LTD. 30,27,51,875 30,29,02,990 -0.05 6. MICROGENETIC SYSTEMS LTD. 1,29,93,217 1,08,63,390 19.61 7. TCS E - SERVE LTD. 15,78,44,000 9,64,28,000 63.69 ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 8 OF 26 8. BNR UDYOG LTD. (SEG)(MEDICAL TRANSCRIPTION) 1,47,04,000 97,87,000 50.61 9. EXCEL INFOWAYS LTD. (SEG) (IT/BVPO) 790,96,95,000 559,06,04,000 29.79 10. E4E HEALTHCARE SERVICES PVT. LTD. 89,50,04,209 74,59,23,078 19.85 AVERAGE PLI 28.11% THE AVERAGE MARGIN OF ABOVE SAID COMPANIES WORKED O UT TO 28.11%. AFTER GIVING CREDIT OF 0.27% TOWARDS WORKING CAPITA L ADJUSTMENT, THE TPO ARRIVED AT ADJUSTED MARGIN OF 27.84%. ACCORDIN GLY, HE MADE TRANSFER PRICING ADJUSTMENT OF RS.25.01 CRORES. TH E LD DRP CONFIRMED INCLUSION OF ALL THE COMPARABLE COMPANIES SELECTED BY THE TPO. HOWEVER, AFTER THE ORDER PASSED BY LD DRP, TR ANSFER PRICING ADJUSTMENT WAS MADE BY THE AO AT RS.11.31 CRORES IN THE FINAL ASSESSMENT ORDER. 16. THE LD A.R SUBMITTED THAT THE ASSESSEE SEEKS EXCLUSION OF FIVE COMPANIES, VIZ., M/S UNIVERSAL PRINT SYSTEMS LTD, M /S INFOSYS BPO LTD, M/S TCS E-SERVE LTD, M/S BNR UDYOG LTD AND M/S EXCEL INFOWAY LTD. THE LD A.R FURTHER SUBMITTED THAT THO UGH THE ASSESSEE HAS SOUGHT INCLUSION OF THREE COMPANIES IN GROUND N O.11, YET HE PRESSES FOR INCLUSION OF ONLY ONE COMPANY NAMED M/S CRYSTAL VOXX LTD. 17. WITH REGARD TO THE CLAIM OF EXCLUSION OF FI VE COMPANIES, THE LD A.R SUBMITTED THAT THE CLAIM OF THE ASSESSEE IS SUP PORTED BY THE DECISION RENDERED BY CO-ORDINATE BENCH IN THE CASE OF INDECOMM GLOBAL SERVICES (INDIA) P LTD VS. DCIT (IT(TP)A NO. 185/BANG/2018 DATED 28-09-2019). WITH REGARD TO THE CLAIM OF INC LUSION OF M/S CRYSTAL VOXX LTD, THE LD A.R SUBMITTED THAT THE SAI D CLAIM IS SUPPORTED BY THE DECISION RENDERED BY THE CO-ORDINA TE BENCH IN THE ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 9 OF 26 CASE OF FNF INDIA P LTD (IT(TP)A NOS. 195/BANG/2016 & 459/BANG/2017 DATED 03-07-2019. 18. WE HEARD LD D.R AND PERUSED THE RECORD. WE NOTICE THAT THE CO-ORDINATE BENCH HAS DIRECTED EXCLUSION OF ABOVE S AID FIVE COMPANIES IN THE CASE OF INDECOMM GLOBAL SERVICES ( INDIA) P LTD (SUPRA). FOR THE SAKE OF CONVENIENCE, WE EXTRACT B ELOW THE DECISION TAKEN BY THE CO-ORDINATE BENCH IN RESPECT OF FIVE C OMPANIES:- COMPARABLES SOUGHT TO BE EXCLUDED: 1. UNIVERSAL PRINT SYSTEMS LTD (SEGMENTAL) (BPO) ASSESSEE SOUGHT TO EXCLUDE THIS COMPARABLE FOR THE REASON THAT, IT FAILS EMPLOYEE COST FILTER AND HAS INSUFFICIENT COMPANY INFORMATION. IT IS ALSO BEEN SUBMITTED THAT, FUNCTIONALLY THIS COMPANY IS PROVIDING INTEGRATED P RINT SOLUTION TO ITS CUSTOMERS AND DOES NOT PROVIDES ROUTINE ITES SERVICES LIKE THAT O F ASSESSEE. IT HAS BEEN SUBMITTED THAT THIS COMPANY IS NOT A CAPTIVE SERVICE PROVIDER LIKE THAT OF ASSESSEE AND HAS PRODUCTS SALE AS WELL AS SERVICES SALE, WHICH IS EV IDENT FROM PAGE 335 OF PAPER BOOK (INDEX FOR ANNUAL REPORTS). 4.1 LD.CIT DR PLACED RELIANCE UPON ORDERS OF AUTHOR ITIES BELOW AND SUBMITTED THAT THIS COMPARABLE IS FUNCTIONALLY COMPARABLE WITH THA T OF ASSESSEE. 5. WE HAVE HEARD SUBMISSIONS ADVANCED BY BOTH SIDES IN LIGHT OF RECORD PLACED BEFORE US. ON PERUSAL OF ANNUAL REPORT OF THIS COMP ANY PLACED IN PAPER BOOK, WE ARE OF CONSIDERED OPINION THAT THIS COMPARABLE IS BASIC ALLY INTO SALE OF PRODUCTS AND SERVICES UNLIKE A CAPTIVE SERVICE PROVIDER SUCH AS ASSESSEE, WHO WORKS ON COST PLUS BASIS, PROVIDING SERVICES ONLY TO ITS AE'S. IT IS A LSO OBSERVED THAT THIS COMPARABLE IS BASICALLY PROVIDING BPO SERVICES FROM ITS PREPRESS UNITS. IN WRITTEN SUBMISSION FILED, ASSESSEE PLACED RELIANCE UPON DECISION OF TH IS TRIBUNAL IN CASE OF ZYME SOLUTIONS PVT LTD., VS ACIT REPORTED IN (2019) 101 TAXMAN.COM 292, WHEREIN THI S COMPARABLE HAS BEEN EXCLUDED BY OBSERVING AS UNDER: 10.4 WE HEARD RIVAL SUBMISSIONS AND PERUSED THE MAT ERIAL ON RECORD. THE ISSUE OF COMPARABILITY OF UNIVERSAL PRINT SYSTEMS LTD. WITH THAT OF THE ASSESSEE- COMPANY HAS BEEN DULY CONSIDERED BY TPO AFTER REFERRING TO INFORMATION CONTAINED IN ANNUAL REPORT. THE RELEVANT FINDINGS OF THE TPO HAD NOT BE EN COUNTENANCED BY LEARNED AR OF THE ASSESSEE. HOWEVER, THE ISSUE OF COMPARABILIT Y OF UNIVERSAL PRINT SYSTEMS LTD. HAS ALSO BEEN CONSIDERED BY THE CO-ORDINATE BENCH O F THIS TRIBUNAL IN THE CASE OF CGI INFORMATION SYSTEMS & MANAGEMENT CONSULTANTS PV T. LTD. (SUPRA) WHEREIN IT WAS HELD AS FOLLOWS: ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 10 OF 26 '47. THE NEXT SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS WITH REGARD TO EXCLUSION OF 2 COMPARABLE COMPANIES FROM THE LIST OF 7 COMPARABLE COMPANIES THAT REMAIN AFTER THE ORDER OF THE DRP. T HE FIRST COMPARABLE COMPANY SOUGHT TO BE EXCLUDED IS UNIVERSAL PRINT SY STEMS LTD. THIS COMPANY WAS CHOSEN AS A COMPARABLE COMPANY BY THE TPO. IN R EPLY TO THE PROPOSAL OF THE TPO TO INCLUDE THIS COMPANY AS A COMPARABLE COMPANY, THE ASSESSEE VIDE ITS LETTER DATED 22.12.2015 HAD POINTED OUT IT S OBJECTIONS TO INCLUDING THIS COMPANY AS A COMPARABLE COMPANY. A COPY OF THE SAID OBJECTION IS AT PAGE-785 OF THE ASSESSEE'S PAPER BOOK. THE ASSESSEE POINTED OUT THAT THE OP/TC OF THIS COMPANY AS WORKED OUT BY THE TPO AT 5 9.40% WAS WRONG AND UNALLOCATED COSTS AS PER THE ANNUAL REPORT SHOULD B E ALLOCATED TO BPO SEGMENT AND IF THAT IS DONE THEN THE OP/TC OF THIS COMPANY WILL BE ONLY 51.80%. THE ASSESSEE FURTHER POINTED OUT (PAGE 764 OF PAPER BOOK) THAT THE TPO HAD APPLIED REVENUE FILTER OF MORE THAN 75% BEI NG FROM NON-FINANCIAL SERVICE INCOME. THE ASSESSEE POINTED OUT THAT THE P ERCENTAGE OF INCOME FROM ITES WAS ONLY 21.63% OF THE TOTAL REVENUE FROM OPER ATIONS OF THIS COMPANY AS PER ITS ANNUAL REPORT. THE ASSESSEE ALSO POINTED OUT THAT IN THE PRE-PRESS BPO SEGMENT THIS COMPANY WAS PROVIDING INTEGRATED P RINT SOLUTIONS TO ITS CUSTOMERS, WHICH INCLUDES SCANNING, DESIGN/LAYOUT, TRAPPING, HAND-OUTLINED CLIPPING PATH AND IMAGE MASKING AND MAGAZINE AND CA TALOGUE PUBLISHING. THE ASSESSEE SUBMITTED THAT THE AFORESAID SERVICES ARE NOT IN THE NATURE OF ITES. THE ASSESSEE POINTED OUT THAT AS PER THE SAFE HARBOUR RULES INTRODUCED BY THE CBDT ITES HAS BEEN DEFINED AS BUSINESS PROCE SS OUTSOURCING SERVICES PROVIDED MAINLY WITH THE ASSISTANCE OR USE OF INFOR MATION TECHNOLOGY. IT WAS ALSO SUBMITTED THAT THIS COMPANY DOES NOT SATISFY T HE DEFINITION OF ITES AS CONTAINED IN RULE IOTA(E) OF THE RULES. SINCE USE O F INFORMATION TECHNOLOGY IS ABSENT .IN THE VARIOUS SERVICES PROVIDED BY THIS COMPANY, IT CANNOT BE REGARDED AS ITES COMPANY. THE ASSESSEE ALSO SUBMITT ED THAT THIS COMPANY FAILS THE EMPLOYEE COST FILTER. THE EMPLOYEE COST F ILTER REQUIRES THAT THE EMPLOYEES COST INCURRED BY THE COMPANY MUST BE MORE THAN 25% OF ITS REVENUE. 48. THE TPO AT PAGE-20 OF HIS ORDER HAS DEALT WITH THE ABOVE OBJECTIONS BY OBSERVING AS FOLLOWS: (A) PRE-PRESS BPO UNIT PROVIDES BACK OFFICE SUPPORT SERVICES. (B) THIS COMPANY HAS FOUR MAJOR SEGMENTS VIZ., REPR O, LABEL PRINTING, OFFSET PRINTING AND PRE-PRE SS BPO. THE EMPLOYEE COST OF P RE-PRESS BPO WAS MORE THAN 25% OF THE REVENUE FROM PRE- PRESS BPO AN D THEREFORE THE EMPLOYEE COST FILTER IS SATISFIED IN THE CASE OF TH IS COMPANY. (C) ON THE SERVICE REVENUE FILTER VIZ., THE REQUIRE MENT THAT A COMPARABLE COMPANY MUST HAVE REVENUE FROM RENDERING SERVICES O F MORE THAN 75% OF ITS TOTAL REVENUE, THE TPO AGAIN HELD THAT THE PRE-PRES S BPO SEGMENT'S ENTIRE INCOME IS FROM SERVICES AND THEREFORE THIS OBJECTIO N IS NOT TO BE ACCEPTED 49. ON OBJECTIONS BY THE ASSESSEE BEFORE THE DRP, T HE DRP CONFIRMED THE ACTION OF THE TPO. ONE OF THE OBJECTION BEFORE THE DRP WAS THAT THIS ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 11 OF 26 COMPANY DID NOT FIGURE IN THE LIST OF COMPANIES ENG AGED IN ITES. ON THIS OBJECTION THE DRP HELD THAT THOUGH THIS COMPANY DID NOT FIGURE IN THE LIST OF COMPANIES IN ITES IN THE MAIN SEARCH OF CAPITAL LIN E AND PROWESS DATABASE BUT ON A SEGMENTAL SEARCH THESE TWO COMPANIES SATIS FIED THE REQUIREMENT OF BEING CONSIDERED AS COMPANIES ENGAGED IN PROVIDING ITES. 50. AGGRIEVED BY THE DIRECTIONS OF THE DRP, THE ASS ESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED SUBMISSIONS THAT WERE MADE BEFORE THE TPO/DRP. IN PARTICULAR IT WAS SUBMITTED THAT THE SERVICE REVENUE FILTER WAS APPLIED BY THE TPO HIMSE LF AT THE ENTITY LEVEL AND ON SUCH SEARCH THIS COMPANY WAS NOT REGARDED AS ENG AGED IN PROVIDING ITES. AT THIS STAGE THE TPO OUGHT TO HAVE DROPPED T HIS COMPANY AS A COMPARABLE COMPANY BECAUSE THIS FILTER HAS TO BE AP PLIED AT THE ENTITY LEVEL AND NOT AT THE SEGMENTAL LEVEL. THE LEARNED DR SUBM ITTED THAT IF THE SERVICE REVENUE FILTER IS APPLIED AT THE SEGMENTAL LEVEL TH ERE CAN BE NO OBJECTION BY THE ASSESSEE. SHE RELIED ON THE ORDER OF THE DRP/TP Q. 51. THE REQUIREMENTS OF RULE 10B(1)(2) & (3) OF THE RULES IN THE MATTER OF COMPARABILITY OF COMPANIES UNDER TNMM NEEDS TO BE S EEN. THE SAME READS AS FOLLOWS: '10B. (1) FOR THE PURPOSES, OF SUB-SECTION (2) OF SECTION 92C , THE ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIONAL TRANSA CTION SHALL BE DETERMINED BY ANY OF THE FOLLOWING METHODS, BEING THE MOST APP ROPRIATE METHOD, IN THE FOLLOWING MANNER, NAMELY:-- (A) TO (D) (E) TRANSACTIONAL-MARGIN METHOD, BY WHICH, (I) THE NET PROFIT MARGIN REALISED BY THE ENTERPRIS E FROM AN INTERNATIONAL TRANSACTION ENTERED INTO WITH AN ASSOCIATED ENTERPR ISE IS COMPUTED IN RELATION TO COSTS INCURRED OR SALES EFFECTED OR ASS ETS EMPLOYED OR TO BE EMPLOYED BY THE ENTERPRISE OR HAVING REGARD TO ANY OTHER RELEVANT BASE; (II) THE NET PROFIT MARGIN REALISED BY THE ENTERPRI SE OR BY AN UNRELATED ENTERPRISE FROM A COMPARABLE UNCONTROLLED TRANSACTI ON OR A NUMBER OF SUCH TRANSACTIONS IS COMPUTED HAVING REGARD TO THE SAME BASE; (III) THE NET PROFIT MARGIN REFERRED TO IN SUB-CLAU SE (IF) ARISING IN COMPARABLE UNCONTROLLED TRANSACTIONS IS ADJUSTED TO TAKE INTO ACCOUNT THE DIFFERENCES, IF ANY, BETWEEN THE INTERNATIONAL TRANSACTION AND THE COMPARABLE UNCONTROLLED TRANSACTIONS, OR BETWEEN THE ENTERPRISES ENTERING I NTO SUCH TRANSACTIONS, WHICH COULD MATERIALLY AFFECT THE AMOUNT OF NET PRO FIT MARGIN IN THE OPEN MARKET; (IV) THE NET PROFIT MARGIN REALISED BY THE ENTERPRI SE AND REFERRED TO IN SUB- CLAUSE (I) IS ESTABLISHED TO BE THE SAME AS THE NET PROFIT MARGIN REFERRED TO IN SUB-CLAUSE (III); ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 12 OF 26 (V) THE NET PROFIT MARGIN THUS ESTABLISHED IS THEN TAKEN INTO ACCOUNT TO ARRIVE AT AN ARM'S LENGTH PRICE IN RELATION TO THE INTERNA TIONAL TRANSACTION. (2) FOR THE PURPOSES OF SUB-RULE (1), THE COMPARABI LITY OF AN INTERNATIONAL TRANSACTION WITH AN UNCONTROLLED TRANSACTION SHALL BE JUDGED WITH REFERENCE TO THE FOLLOWING, NAMELY:-- (A) THE SPECIFIC CHARACTERISTICS OF THE PROPERTY TR ANSFERRED OR SERVICES PROVIDED IN EITHER TRANSACTION; (B) THE FUNCTIONS PERFORMED, TAKING INTO ACCOUNT AS SETS EMPLOYED OR TO BE EMPLOYED AND THE RISKS ASSUMED, BY THE RESPECTIVE P ARTIES TO THE TRANSACTIONS; (C ) THE CONTRACTUAL TERMS (WHETHER OR NOT SUCH TER MS ARE FORMAL OR IN WRITING) OF THE TRANSACTIONS WHICH LAY DOWN EXPLICI TLY OR IMPLICITLY HOW THE RESPONSIBILITIES, RISKS AND BENEFITS ARE TO BE DIVI DED BETWEEN THE RESPECTIVE PARTIES TO THE TRANSACTIONS; (D) CONDITIONS PREVAILING IN THE MARKETS IN WHICH T HE RESPECTIVE PARTIES TO THE TRANSACTIONS OPERATE, INCLUDING THE GEOGRAPHICAL LO CATION AND SIZE OF THE MARKETS, THE LAWS AND GOVERNMENT ORDERS IN FORCE, C OSTS OF LABOUR AND CAPITAL IN THE MARKETS, OVERALL ECONOMIC DEVELOPMEN T AND LEVEL OF COMPETITION AND WHETHER THE MARKETS ARE WHOLESALE O R RETAIL (3) AN UNCONTROLLED TRANSACTION SHALL BE COMPARABLE TO AN INTERNATIONAL TRANSACTION IF-- (I) NONE OF THE DIFFERENCES, IF ANY, BETWEEN THE TR ANSACTIONS BEING COMPARED, OR BETWEEN THE ENTERPRISES ENTERING INTO SUCH TRANS ACTIONS ARE LIKELY TO MATERIALLY AFFECT THE PRICE OR COST CHARGED OR PAID IN, OR THE PROFIT ARISING FROM, SUCH TRANSACTIONS IN THE OPEN MARKET; OR (II) REASONABLY ACCURATE ADJUSTMENTS CAN BE MADE TO ELIMINATE THE MATERIAL EFFECTS OF SUCH DIFFERENCES.' 52. THERE APPEARS TO BE NO BAR IN THE RULES REFERRE D TO ABOVE TO CONSIDERING SEGMENTAL DATA UNDER TNMM BECAUSE THE COMPARISON IS OF 'NET PROFIT MARGIN REALIZED BY THE ENTERPRISE FROM AN INTERNATI ONAL TRANSACTION' WITH THE 'NET PROFIT REALIZED FROM A COMPARABLE UNCONTROLLED TRANSACTION'. THEREFORE COMPARISON IS OF SIMILAR TRANSACTION. WHEN SEGMENTA L INFORMATION IS AVAILABLE AND IS NOT DISPUTED, IT CANNOT BE ARGUED THAT FILTERS HAVE TO BE APPLIED AT ENTITY LEVEL. IT CANNOT BE ARGUED THAT W HEN THE TPO HIMSELF APPLIED THE FILTERS AT THE ENTITY LEVEL HE WAS NOT ENTITLED TO APPLY THE FILTERS AT SEGMENTAL LEVEL. AS WE HAVE ALREADY STATED IF CLEAR SEGMENTAL INFORMATION IS AVAILABLE THE FILTERS CAN BE APPLIED AT THE SEGMENT AL LEVEL IN TNMM. THEREFORE THE OBJECTION WITH REGARD TO THIS COMPANY FAILING THE EMPLOYEE ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 13 OF 26 COST FILTER AND SERVICE REVENUE FILTER IN OUR VIEW WAS RIGHTLY REJECTED BY THE TPO AND DRP. IT IS HOWEVER SEEN THAT THIS COMPANY H AS FOUR SEGMENTS VIZ., REPRO. LABEL PRINTING, OFFSET PRINTING AND PRE-PRES S BPO. WHETHER THE LABEL PRINTING AND OFFSET PRINTING SEGMENTS SUPPLEMENT TH E FUNCTIONS PERFORMED IN THE PRE- PRESS BPO SEGMENT HAS TO BE SEEN. WE THERE FORE SET ASIDE THE ORDER OF THE DRP IN THIS REGARD AND REMAND FOR FRESH CONS IDERATION BY THE TPO THE COMPARABILITY OF THIS COMPANY. IN TERMS OF RULE 10B (3) OF THE RULES THE PROFIT MARGINS OF PRE-PRESS BPO HAVE TO BE ADJUSTED TAKING INTO ACCOUNT THE FACT THAT TWO OTHER SEGMENTS SUPPLEMENT THE PRE- PRESS B PO SEGMENT. IF SUCH ADJUSTMENT CANNOT BE REASONABLY OR ACCURATELY MADE THEN THIS COMPANY HAS TO BE EXCLUDED FROM THE LIST OF COMPARABLE COMPANIE S. THE TPO FOR THIS PURPOSE CAN USE HIS POWERS U/S. 133(6) OF THE ACT T O GET REQUIRED DETAILS FROM THIS COMPANY. AS FAR AS THE ARGUMENT THAT THIS COMP ANY FAILS FUNCTIONAL COMPARABILITY, WE FIND THAT NONE OF THE OBJECTIONS RAISED BY THE ASSESSEE IN THIS REGARD ABOUT LACK OF INFORMATION ABOUT ALLIED SERVICES PERFORMED BY THE PRE-PRESS BPO SEGMENT OF THIS COMPANY AND THE BREAK -UP OF THE REVENUE FROM SUCH ALLIED SERVICES HAVE BEEN DEALT WITH SPEC IFICALLY BY THE TPO OR DRP. SINCE THE COMPARABILITY OF THIS COMPANY IS BEI NG REMANDED TO BE TPO FOR CONSIDERATION OF ADJUSTMENTS AS MENTIONED ABOVE , THE OBJECTION WITH REGARD TO FUNCTIONAL COMPARABILITY SHOULD ALSO BE L OOKED INTO BY THE TPO IN THE REMAND PROCEEDINGS ON THE BASIS OF MATERIALS WH ICH HE MAY GATHER U/S. 133(6) OF THE ACT, THE ASSESSEE SHOULD BE GIVEN OPP ORTUNITY OF BEING HEARD BY THE TPO BEFORE THE ISSUE IS DECIDED BY THE TPO.' RESPECTFULLY FOLLOWING THE DECISION, WE REMAND THIS COMPARABLE TO THE FILE OF THE TPO/AO FOR FRESH ADJUDICATION ON THE ABOVE LINES. RESPECTFULLY FOLLOWING AFORESAID DECISION, WE REMAN D THIS COMPARABLE TO FILE OF LD.AO/TPO, FOR FRESH ADJUDICATION, ON THE BASIS OF DIRECTIONS REPRODUCED HEREINABOVE. NEEDLESS TO SAY THAT PROPER OPPORTUNIT Y SHALL BE GRANTED TO ASSESSEE AS PER LAW. ACCORDINGLY WE SET ASIDE THIS COMPARABLE BACK TO LD .TPO. 2. INFOSYS BPO LTD . ASSESSEE OBJECTED FOR INCLUSION OF THIS COMPARABLE PRIMARILY ON THE BASIS OF FUNCTIONAL INCOMPATIBILITY AND PRESENCE OF INTANGIB LES. IT HAS BEEN SUBMITTED THAT THIS COMPANY OWNS HUGE BRAND AND NOT A FIT COMPARAB LES FOR COMPANY LIKE ASSESSEE, WHO PROVIDE CAPTIVE SERVICE TO ITS AE'S. LD.CIT DR OPPOSED THE EXCLUSION AND PLACED RELIANCE UPON ORDERS PASSED BY AUTHORITIES BELOW. 6. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN THE LIGHT OF THE RECORDS PLACED BEFORE US. ASSESSEE PLACED RELIANCE UPON DEC ISION OF THIS TRIBUNAL IN CASE OF ZYME SOLUTIONS PVT LTD., VS ACIT VIDE ORDER DATED 28/06/19 IN ITA (TP) A NO. 1661/BANG/2016, WHEREIN THIS COMPARABLE HAS BEEN EX CLUDED BY OBSERVING AS UNDER: ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 14 OF 26 '5. WE HAVE HEARD THE RIVAL SUBMISSIONS ON THE COMP ARABILITY OF INFOSYS BPO AS A COMPARABLE COMPANY. THE DELHI ITAT IN THE CASE OF BAXTER INDIA PVT. LTD. VS. ACIT ITA NO.6158/DEL/2016 FOR AY 2012-13 I N THE CASE OF A COMPANY RENDERING ITES SUCH AS THE ASSESSEE, VIDE O RDER DATED 24.8.2017 PARAGRAPH 23 HELD THAT INFOSYS BPO IS NOT COMPARABL E WITH A COMPANY RENDERING ITES FOR THE FOLLOWING REASONS:- '23. IN SO FAR AS EXCLUSION OF INFOSYS BPO LTD. IS CONCERNED, WE FIND FROM THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE ASS ESSING OFFICER/TPO/DRP IS THAT INFOSYS BPO LTD. IS PREDOMINANTLY INTO AREA S LIKE INSURANCE, BANKING, FINANCIAL SERVICES, MANUFACTURING AND TELECOM WHICH ARE IN THE NICHE AREAS, UNLIKE THE ASSESSEE. FURTHER IT WAS ALSO SUB MITTED THAT THE INFOSYS BPQ LTD. COMPRISES BRAND VALUE WHICH WILL TEND TO I NFLUENCE ITS BUSINESS OPERATION AND THE PRICING POLICY THEREBY DIRECTLY I MPACTING THE MARGINS EARNED BY THE INFOSYS BPO LTD.. WE FIND THE SUBMISS IONS OF THE LD. COUNSEL FOR THE ASSESSEE BEFORE TPO/DRP THAT IN ORDER TO MA INTAIN THE BRAND IMAGE OF INFOSYS BPQ LTD. IN THE MARKET, THE COMPANY INCU RS SUBSTANTIAL SELLING AND MARKETING EXPENDITURE WHEREAS THE ASSESSEE BEIN G A CONTRACT SERVICE PROVIDER DOES NOT INCUR SUCH EXPENSES TO MAINTAIN I TS BRAND HAS NOT BEEN CONTROVERTED BY THEM. FURTHER, INFOSYS BPO LTD. BEI NG A SUBSIDIARY OF INFOSYS HAS AN ELEMENT OF BRAND VALUE ASSOCIATED WI TH IT. THIS CAN BE FURTHER CONFIRMED BY THE PRESENCE OF BRAND RELATED EXPENSES INCURRED BY INFOSYS BPO LTD. FURTHER, INFOSYS BPO LTD. HAS ACQUIRED AUS TRALIAN BASED COMPANY M/S PORTLAND GROUP PTY LTD. DURING FINANCIAL YEAR 2 011-12. THEY PROVIDE SOURCING AND CATEGORY MANAGEMENT SERVICES IN SYDNEY , AUSTRALIA. THEREFORE, THIS COMPANY ALSO FAILED THE TPO'S OWN FILTER OF RE JECTING COMPANIES WITH PECULIAR CIRCUMSTANCES. IN VIEW OF THE ABOVE I.E. F UNCTIONALLY NOT COMPARABLE, PRESENCE OF BRAND AND EXTRAORDINARY EVE NT THAT HAS TAKEN PLACE DURING THE YEAR ON ACCOUNT OF ACQUISITION OF AUSTRA LIAN BASED COMPANY, WE ARE OF THE CONSIDERED OPINION THAT INFOSYS BPO LTD. SHOULD NOT BE INCLUDED IN THE LIST OF COMPARABLES. WE ACCORDINGLY DIRECT T HE ASSESSING OFFICER/TPO TO EXCLUDE INFOSYS BPO LTD. FROM THE LIST OF COMPAR ABLES FOR THE PURPOSE OF COMPUTING THE AVERAGE MARGIN.' IT WAS ALSO BROUGHT TO OUR NOTICE THAT THE HON'BLE DELHI HIGH COURT IN ITA NO.260/2018 IN THE APPEAL FILED BY THE REVENUE AGAI NST THE AFORESAID ORDER DISMISSED THE APPEAL AT THE ADMISSION STAGE OBSERVI NG THAT RATIONALE GIVEN BY THE ITAT FOR EXCLUSION WAS CORRECT. IN VIEW OF T HE AFORESAID DECISION, WE DIRECT EXCLUSION OF INFOSYS BPO FROM THE LIST OF CO MPARABLE COMPANIES CHOSEN BY THE TPO. FROM ABOVE, IT IS CLEAR THAT THIS COMPANY IS FUNCTI ONALLY NOT COMPARABLE WITH CAPTIVE SERVICE PROVIDER. RESPECTFULLY FOLLOWING THE SAME WE DIRECT THIS COMP ANY TO BE EXCLUDED FROM THE LIST OF COMPARABLES. 3. TCS E-SERVE LTD . ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 15 OF 26 LD.AR SUBMITTED THAT THIS COMPANY HAS BEEN OBJECTED BY ASSESSEE FOR ITS FUNCTIONAL DISSIMILARITY AS IT RENDERS BOTH BPO AND KPO IT(TP) A NO.185(B)/2018 SERVICES WITHOUT SEGMENTAL REPORTING. IT IS SUBMITTED THAT T HIS COMPANY OWNS HUGE BRAND OF TATA GROUP AND HAS ALSO INCURRED BRAND RELATED EXPE NSES AND THEREFORE CANNOT BE ACCEPTED TO BE COMPARED WITH A CAPTIVE SERVICE PROV IDER LIKE ASSESSEE. LD.CIT DR ON THE CONTRARY OPPOSED ITS EXCLUSION AND PLACED RE LIANCE UPON ORDERS PASSED BY AUTHORITIES BELOW. 7. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN LIGHT OF RECORDS PLACED BEFORE US. ASSESSEE PLACED RELIANCE UPON FOLLOWING DECISIONS IN SUPPORT OF ITS ARGUMENT FOR EXCLUSION OF THIS COMPARABLE: ZYME SOLUTIONS PVT LTD. VS ACIT (SUPRA) BAXTER INDIA PVT. LTD VS ACIT REPORTED IN (2017) 8 5 TAXMANN.COM 285 (DELHI-TRIB) PCIT VS BC MANAGEMENT SERVICES PVT. LTD. REPORTED IN TS-948- HC- 2017 (DEL)-TP IT IS OBSERVED THAT THIS COMPARABLE HAS BEEN EXCLUD ED BY THIS TRIBUNAL. ASSESSEE PLACED RELIANCE UPON DECISION OF THIS TRIBUNAL IN C ASE OF ZYME SOLUTIONS PVT LTD., VS ACIT REPORTED IN (2019) 101 TAXMAN.COM 292, BY OBSERVIN G AS UNDER: '11.3 WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED M ATERIAL ON RECORD. THE ISSUE OF COMPARABILITY OF THIS COMPANY WAS CONSIDER ED BY THE CO-ORDINATE BENCH OF TRIBUNAL IN THE CASE OF XLHEALTH CORPN. IN DIA (P.) LTD. (SUPRA). THE RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDER: ' . . . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. FROM THE PERUSAL OF THE ANNUAL REPORT OF TH IS ENTITY PLACED AT PAGE NOS. 583 TO 678 OF PAPER BOOK, AT PAGE NO. 604 IT I S STATED AS UNDER. '2. COMPANY OVERVIEW YOUR COMPANY, ALONG WITH ITS SUBSIDIARY COMPANIES - TCS E-SERVE INTERNATIONAL LIMITED AND TCS E-SERVE AMERICA INC., IS PRIMARILY ENGAGED IN THE BUSINESS OF PROVIDING BUSINESS PROCESS SERVI CES (BPO) FOR ITS CUSTOMERS IN BANKING, FINANCIAL SERVICES AND INSURA NCE DOMAIN. THE COMPANY'S OPERATIONS INCLUDE DELIVERING CORE BUSINE SS PROCESSING SERVICES, ANALYTICS & INSIGHTS (KPO) AND SUPPORT SERVICES FOR BOTH DATA AND VOICE PROCESSES. YOUR COMPANY IS AN INTEGRAL PART OF THE TATA CONSUL TANCY SERVICES' (TCS) STRATEGY TO BUILD ON ITS 'FULL SERVICES OFFERINGS' THAT OFFER GLOBAL CUSTOMERS AN INTEGRATED PORTFOLIO OF SERVICES RANGING FROM IT SERVICES TO BPO SERVICES. THE COMPANY PROVIDES ITS SERVICES FROM VARIOUS PROC ESSING FACILITIES, BACKED T) A ROBUST AND SCALABLE INFRASTRUCTURE NETWORK TAI LORED TO MEET CLIENTS' ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 16 OF 26 NEEDS. A DETAILED BUSINESS CONTINUITY PLAN HAS ALSO BEEN PUT IN PLACE TO ENSURE THE SERVICES ARE PROVIDED TO THE CUSTOMERS W ITHOUT ANY DISRUPTIONS.' THUS, THIS COMPANY IS ALSO STATED TO BE A KNOWLEDGE PROCESS OUTSOURCING AND THEREFORE FOR REASONS STATED BY US WHILE DEALING WI TH THIS ISSUE OF COMPARABILITY OF THE COMPANY INFOSYS BPO LTD. SHALL EQUALLY HOLD GOO D AND THEREFORE WE DIRECT TH E A O / T P O TO E X C L U D E THIS COMPANY FROM : LI ST OF COMPARABLES.' SINCE THE APPELLANT COMPANY IS INTO LOW END BPO, IT CANNOT BE COMPARED WITH KPO SERVICE PROVIDER. 11.4 RESPECTFULLY FOLLOWING THE DECISION OF THE CO- ORDINATE BENCH OF TRIBUNAL, WE DIRECT FOR EXCLUSION THIS COMPANY FROM THE LIST OF COMPARABLE'. IT HAS BEEN OBSERVED THAT THIS COMPANY IS INTO HIGH -END KPO SERVICES AND AN ASSESSEE RENDERING LOW END BPO SERVICES CANNOT BE C OMPARED WITH IT. FURTHER, THIS COMPANY HAS BEEN EXCLUDED DUE TO ABSENCE OF SEGMENT AL INFORMATION. RESPECTFULLY FOLLOWING AFORESAID DECISION, WE DIREC T LD.TPO TO EXCLUDE THIS COMPANY FROM THE LIST OF COMPARABLES. 5.BNR UDYOG LTD. (SEGMENTAL) LD.AR SUBMITTED THAT THIS COMPANY FAILS RPT FILTER AND ALSO FAILS EXPORT FILTER APPLIED BY LD.TPO. IT IS SUBMITTED THAT THIS COMPANY IS INT O MEDICAL TRANSCRIPTION, CODING, BUSINESS SUPPORT SERVICES AND E- GOVERNANCE PROJECT S AND THEREFORE FUNCTIONALLY NOT SIMILAR WITH THAT OF ASSESSEE. LD. CIT DR HOWEVER CONTENDED THAT THIS COMPANY IS C OMPARED ONLY FOR SEGMENT OF MEDICAL TRANSCRIPTION AND THEREFORE SHOULD NOT BE E XCLUDED. SHE PLACED RELIANCE UPON DECISION OF THIS TRIBUNAL IN CASE OF MOBILY INFOTECH INDIA (P) LTD VS DCIT REPORTED IN (2018) 97 TAXMAN.COM 2 IN SUPPORT. 8. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN THE LIGHT OF THE RECORDS PLACED BEFORE US. ASSESSEE IS CHALLENGING FUNCTIONAL DISSIMILARITY OF THIS COMPANY WITH THAT OF ASSESSEE AS IT IS INTO MEDICAL TRANSCRIPTION. WE HAVE OUR RE SERVATION TO CONSIDER MEDICAL TRANSCRIPTION SERVICES TO BE ONE OF KPO SERVICES. I N OUR CONSIDERED OPINION MEDICAL TRANSCRIPTION SERVICES IS BASICALLY BACK-OFFICE SER VICES PROVIDED BY GRADUATES WHO ARE TRAINED FOR SHORT PERIOD OF 6 MONTHS TO ONE YEA R. THESE ARE SHORT CRASH COURSES UNDERTAKEN BY GRADUATES WHO ARE TRAINED TO UNDERSTA ND AND SPEAK ENGLISH. THERE IS NO VALUE ADDITION IN THE SERVICES RENDERED BY PEOPL E IN MEDICAL TRANSCRIPTION. TO OUR UNDERSTANDING, BASICALLY THESE PEOPLE WHO CARRY OUT MEDICAL TRANSCRIPTION SERVICES ARE TRAINED TO UNDERSTAND LANGUAGE SPOKEN BY DOCTORS, OUTSIDE INDIA TO WHOM MEDICAL REPORTS OF PATIENCE ARE SENT FOR EXPER T OPINION. MEDICAL TRANSCRIPTIONIST SIMPLY REPRODUCES OPINION EXPRESSE D BY DOCTOR, WHICH IS THEN COMMUNICATED TO THE PATIENTS. ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 17 OF 26 IT IS OBSERVED FROM ANNUAL REPORT PLACED AT PAGE 2 23 OF PAPER BOOK (INDEX TO ANNUAL REPORTS) THAT THIS COMPANY HAS SEGMENTAL INFORMATIO N OF MEDICAL TRANSCRIPTION AND REVENUE EARNED UNDER THIS SEGMENT IS RS.147.40 LACS . IT IS ALSO BEEN OBSERVED THAT VARIOUS OTHER DECISIONS BY CO-ORDINATE BENCHES OF T HIS TRIBUNAL HAS REMANDED THIS COMPARABLE BACK TO LD.TPO, FOR PROPER ANALYSIS AND FRESH CONSIDERATION. WE DRAW SUPPORT FOR SAME FROM INDEGENE (P) LTD VS ACIT REPORTED IN (2017) 85 TAXMANN.COM 60, WHEREIN IT HAS BEEN HELD AS UNDER: '9.3.1. WE HAVE HEARD THE RIVAL CONTENTIONS AND PER USED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD INCLUDING THE JUD ICIAL PRONOUNCEMENTS CITED. FROM THE DETAILS ON RECORD WE OBSERVE THAT W HILE THE ASSESSEE HAS CONTENDED THAT THE SERVICES RENDERED BY THIS COMPAN Y M/S TCS E-SERVE LTD ARE HIGH END KPO SERVICES, IT HAS NOT BROUGHT OUT A S TO WHICH OF THESE ARE THE SERVICES THAT WOULD COME UNDER TECHNICAL SERVIC ES. ON THE OTHER HAND, W ALSO NOTICE THAT THAT THE TPO HAS HELD ALL THE SERV ICES RENDERED BY THE ASSESSEE TO BE BPO SERVICES WITH ANY PROPER ANALYSI S. IN THIS FACTUAL MATRIX OF THE CASE, WE FIND THAT ON SIMILAR FACTS, THE CO- ORDINATE BENCH O ITAT BANGALORE IN THE CASE OF INDEGENE (P) LTD., (SUPRA) HAS REMANDED THE MATTER OF COMPARABILITY OF THIS COMPANY TO THE FILE OF THE TPO FOR FRESH CONSIDERATION. IN VIEW OF THE FACTUAL MATRIX OF THE CASE ON HAND, AS LAID OUT ABOVE AND FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF INDEGENE (P) LTD. (SUPRA) WHICH IS ALSO RENDERED ON SIMILAR FACTS, WE DEEM IT APPROPRIATE TO REMAND THE MATTER OF THE COMPARAB ILITY OF THIS COMPANY, TCS E-SERVE LTD. TO THE FILE OF THE TPO FOR FRESH C ONSIDERATION IN THE LIGHT OF OUT ABOV OBSERVATIONS. NEEDLESS IT(TP)A NO.185(B )/2018 TO ADD, THE TPO SHALL AFFORD THE ASSESSEE ADEQUATE OPPORTUNITY OF B EING HEARD AND TO FILE DETAILS/SUBMISSIONS IN THIS REGARD. IT IS ALSO BEEN OBSERVED THAT SIMILAR VIEW HAS BEEN TAKEN BY DECISION OF THIS TRIBUNAL IN CASE OF M/S NIELSON SPORTS INDIA PVT.LTD., VS ACIT IN IT(TP)A NO.196(B))/2017 VIDE ORDER DATED 28- 06-2019. RESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE THIS COMPARABLE BACK TO LD.TPO FOR CONSIDERING IT AFRESH. NEEDLESS TO SAY THAT PROPER OPPORTUNITY SHALL BE GRANTED TO ASSESSEE AS PER LAW. ACCORDINGLY WE SET ASIDE THIS COMPARABLE BACK TO LD.TPO 6. EXCEL INFOWAYS LTD. (SEGMENTAL) THIS COMPARABLE SELECTED BY LD.TPO IS ALLEGED TO BE FUNCTIONALLY NOT COMPARABLE WITH ASSESSEE, AS IT IS HANDLING BUSINESS RELATIONS AND MANAGING CUSTOMER RELATIONSHIPS. IT HAS BEEN SUBMITTED BY LD.AR THAT THIS COMPARABLE FAILS EMPLOYEE COST FILTER. LD.CIT DR HOWEVER CONTENDED THAT THIS COMPANY IS CO MPARED ONLY FOR SEGMENT OF MEDICAL TRANSCRIPTION AND THEREFORE SHOULD NOT BE E XCLUDED. SHE PLACED RELIANCE UPON DECISION OF THIS TRIBUNAL IN CASE OF MOBILY INFOTECH INDIA (P) LTD VS DCIT REPORTED IN (2018) 97 TAXMAN.COM 2 IN SUPPORT. 9. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SID ES IN LIGHT OF RECORDS PLACED BEFORE US. ANNUAL REPORT OF THIS COMPANY IS PLACED AT PAGE 273 OF PAPER BOOK (INDEX ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 18 OF 26 FOR ANNUAL REPORTS). IN THE SIGNIFICANT ACCOUNTING POLICIES REPORTED AT PAGE 308 OF PAPER BOOK, IT IS OBSERVED THAT THESE COMPANIES OPE RATING BUSINESSES ARE ORGANIZED AND MANAGED SEPARATELY, ACCORDING TO NATURE OF BUSI NESS AND SERVICES PROVIDED WITH EACH SEGMENT, REPRESENTING DIFFERENT STRATEGIC BUSI NESS UNIT. NOTE 15 AT PAGE 312 TO REFERS TO REVENUES FROM OPERATIONS UNDER THE HEAD I NFORMATION TECHNOLOGY/BPO RELATED SERVICES SEPARATELY. IT IS OBSERVED THAT TH E FUNCTION PERFORMED BY THIS COMPANY AS REPORTED AT PAGE 285 REVEALS THAT IT IS ENGAGED IN BUSINESS OF PROVIDING CUSTOMER CARE SERVICES AND HANDLING CLIENT BUSINESS RELATIONS ON THEIR BEHALF BY MAINTAINING RELATION WITH CUSTOMERS AND ALSO PROVID ING SERVICES BY ASSISTING IN MANAGING THE WORKFLOW AND UPDATING THE RECORDS. IT IS OBSERVED THAT THIS TRIBUNAL IN CASE OF ZYME SOLUTIONS PVT LTD., VS ACIT VIDE ORDER DATED 28/06/19 IN ITA (TP) A NO. 1661/BANG/2016, THIS COMPARABLE IS EXCLUDED BY OBSERVING AS UNDER: 'THE THIRD AND LAST COMPANY THAT IS SOUGHT TO BE EX CLUDED FROM THE LIST OF COMPARABLE COMPANIES IS EXCLUSION OF EXCEL INFO LTD . THE TRIBUNAL HAD RETAINED THIS COMPANY AS A COMPARABLE COMPANY IN IT S ORIGINAL ORDER. THE ASSESSEE SOUGHT EXCLUSION OF THIS COMPANY ON THE GR OUND THAT THIS COMPANY WAS FUNCTIONALLY DIFFERENT FROM THE ASSESSEE COMPAN Y AND THE EMPLOYEE COST TO THE REVENUE WAS LESS THAN THE THRESHOLD LIMIT OF 25% AND THAT THERE WERE PECULIAR ECONOMIC CIRCUMSTANCES WHICH IMPACTED THE PROFIT MARGIN OF THIS COMPANY THEREBY RENDERING THIS COMPANY AS NOT COMPA RABLE COMPANY. THE TRIBUNAL WHILE ADJUDICATING OF EXCLUSION OF THIS CO MPANY IN PARAGRAPH 14.3 OF ITS ORDER HELD THAT ON APPLICATION OF EMPLOYEE C OST FILTER THAT THE ASSESSEE HAS FAILED TO SHOW AS TO HOW THE FINDINGS OF THE TP O AND DRP ARE NOT CORRECT. 2. THE ASSESSEE HAS POINTED OUT CERTAIN FACTS WITH REGARD TO EMPLOYEE COST AND DIMINISHING REVENUE OF THIS COMPANY WHICH TAKES IT OUT OF THE COMPARABILITY AND THESE ASPECTS HAVE NOT BEEN CONSI DERED BY THE TRIBUNAL IN ITS ORDER. ON THE ABOVE OBJECTIONS IN THE MA, THE T RIBUNAL HELD AS FOLLOWS:- '8. WE HAVE EXAMINED THE CONTENTS IN THE MISC. PETI TION AND WE FIND THAT THERE HAS BEEN OMISSION TO CONSIDER THE APPLICATION OF EM PLOYEE COST FILTER BY THE TRIBUNAL THOUGH ATTENTION OF THE BENCH WAS INVITED TO RELEVANT PAGES POINTED OUT IN THE MISC. PETITION. WE DO NOT HOWEVER AGREE WITH THE ASSESSEE THAT FUNCTIONAL COMPARABILITY OF THIS COMPANY HAS NOT BE EN EXAMINED BY THE TRIBUNAL IN PARAGRAPH 14.4. THE TRIBUNAL HAS COME T O THE CONCLUSION THAT THIS COMPANY IS A ITES COMPANY AND THAT CANNOT BE R EVIEWED IN THE MISC. APPLICATION. HOWEVER THERE HAS BEEN OMISSION TO ADJ UDICATED EXCLUSION OF THIS COMPANY ON ACCOUNT OF EXTRAORDINARY EVENTS. WE THEREFORE RECALL THE ORDER OF THE TRIBUNAL TO THE LIMITED EXTENT OF EXAM INING OF THE EMPLOYEE COST FILTER AND THE PRESENCE OF EXTRAORDINARY EVENTS ON WARRANTY EXCLUSION OF THIS COMPANY.' 3. WE HAVE HEARD THE RIVAL SUBMISSIONS ON THE EXCLU SION OF THIS COMPANY ON THE BASIS OF EXTRAORDINARY EVENTS THAT OCCURRED DUR ING THE RELEVANT PREVIOUS YEAR WHICH HAD IMPACT ON THE PROFIT MARGIN OF THIS COMPANY AND THEREFORE RENDERING THIS COMPANY FROM BEING CHOSEN AS A COMPA RABLE COMPANY. THE DELHI ITAT IN THE CASE OF BT E-SERVE (INDIA) LTD. V S. ITO ITA NO.6690/DEL/2016 FOR AY 2012-13 ORDER DATED 19.6.20 18 CONSIDERED THE ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 19 OF 26 COMPARABILITY OF THIS COMPANY AND CAME TO THE CONCL USION IN PARAGRAPH 5.4 OF ITS ORDER THAT THERE WAS ABNORMAL VOLATILITY OF REVENUE OF THIS COMPANY FROM 2009-10 TO 2014-15 AND THEREFORE THIS COMPANY SHOULD NOT BE REGARDED AS COMPARABLE COMPANY. RESPECTFULLY FOLLOWING THE A FORESAID DECISION, WE DIRECT EXCLUSION OF THE AFORESAID COMPANY FROM THE LIST OF COMPARABLE COMPANIES CHOSEN BY THE TPO. IT IS OBSERVED FROM ORDER PASSED BY LD.TPO AT PAGE 10 THAT ASSESSEE OBJECTED THIS COMPANY THAT EMPLOYEE COST FILTER BEING MORE THAN 2 5% HAS NOT BEEN EXAMINED BY LD.TPO. IT IS OBSERVED THAT IN DECISION OF COORDINA TE BENCH OF DELHI TRIBUNAL IN CASE OF BAXTER INDIA PVT.LTD VS ACIT REPORTED IN (2017) 85 TAXMANN.COM 285 THIS COMPARABLE FAILING EMPLOYEE COST FILTER HAS BEEN AN ALYZED AS UNDER: FURTHER, FROM THE ORDER OF THE TPO WE FIND HE HAS O BTAINED THE EMPLOYEE COST AND THE SALE FOR THE ITES SEGMENT BY EXERCISE OF HIS POWERS U S. 133(6) . WHEREIN THE SAID COMPANY HAS ALLOCATED ENTIRE EMPLO YEE COST TO IT - BPO SEGMENT WITH NO ALLOCATION TO INFRA ACTIVITY SEGMEN T WHICH ACCOUNTS TO 49% OF EXCEL'S TOTAL REVENUE. IN OUR OPINION. IT IS HIG HLY IMPRACTICAL THAT NO EMPLOYEE HAS BEEN HIRED BY EXCEL FOR INFRA ACTIVITY SEGMENT. WE. THEREFORE. FIND MERIT IN THE ARGUMENT OF THE ID. COUNSEL FOR T HE ASSESSEE THAT THE INFORMATION PROVIDED AS PER SECTION 133(6) BY EXCEL INFOWAYS LTD. IS UNRELIABLE AND SHOULD NOT BE USED TO COMPUTE EMPLOY EE COST FOR ITES SEGMENT. THE DELHI BENCH OF THE TRIBUNAL IN THE CAS E OF MOTOROLA SOLUTIONS INDIA (P.) LTD. V. ASSTS . CIT[2014] 48 TAXMANN.COM 24842015] 152 ITD 158 (DELHI) HAS HELD THAT A COMPANY SHOULD BE REJECTED AS COMPARABLE IN CASE THERE IS CONTRADICTION IN THE FACTS OR DATA SOURCED FROM ANNUAL REPORT AND AS PER THE INFORMATION GATHERED U/S. 133(6). IN VIEW O F ABOVE DISCUSSION, WE HOLD THAT EXCEL INFOWAYS LTD. CANNOT BE CONSIDERED AS COMPARABLE AND SHOULD BE EXCLUDED FROM THE LIST OF COMPARABLES. WE HOLD AND DIRECT ACCORDINGLY'. FROM THE ABOVE OBSERVATION BY COORDINATE BENCH, OBJ ECTION RAISED BY LD.CIT DR STANDS CLARIFIED, AS THIS COMPANY FOR YEAR UNDER CO NSIDERATION MADE A STATEMENT UNDER 133 (6) REGARDING ALLOCATING ENTIRE EMPLOYEE COST TO IT-BPO SEGMENT, WITH NO ALLOCATION TO OTHER SEGMENT, WHICH AMOUNTS TO AL MOST 49% OF ITS TOTAL REVENUE DURING THE YEAR UNDER CONSIDERATION. AT THIS STAGE, WE CLARIFY THAT, WE ARE NOT INCLINED TO EXPRESS OUR OPINION REGARDING FUNCTIONA L SIMILARITIES/DISSIMILARITY OF THIS COMPANY WITH THAT OF PRESENT ASSESSEE BEFORE US AND THE SAME IS KEPT OPEN TO BE CONSIDERED IN AN APPROPRIATE CASE. WE THEREFORE AGREE WITH CONTENTION RAISED BY ASSESS EE REGARDING THIS COMPARABLE NOT SATISFYING EMPLOYEE COST FILTER. RESPECTFULLY F OLLOWING AFORESTATED DECISION OF DELHI TRIBUNAL REPRODUCED HEREINABOVE, WE DIRECT LD .TPO TO EXCLUDE THIS COMPARABLE FROM THE FINAL LIST. 19. WE NOTICE THAT THE CO-ORDINATE BENCH HAS DIR ECTED EXCLUSION OF M/S INFOSYS BPO LTD, M/S TCS E-SERVE LTD AND M/S EX CEL INFOWAYS LTD. FOLLOWING THE ABOVE SAID DECISION, WE DIRECT EXCLUSION OF ABOVE ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 20 OF 26 SAID THREE COMPANIES. THE CO-ORDINATE BENCH HAS RE MANDED THE MATTER TO THE FILE OF AO/TPO M/S UNIVERSAL PRINT SY STEMS LTD AND M/S BNR UDYOG LTD. FOLLOWING THE SAME, WE RESTORE THESE TWO COMPANIES TO THE FILE OF AO/TPO WITH SIMILAR DIRECT IONS. 20. WITH REGARD TO THE CLAIM OF INCLUSION OF CR YSTAL VOXX LTD, THE LD A.R RELIED UPON THE DECISION RENDERED IN THE CAS E OF FNF INDIA P LTD (SUPRA), WHEREIN IT WAS HELD AS UNDER:- 24. IN GROUND NO.13, THE ASSESSEE HAS PRAYED FOR I NCLUSION OF CRYSTAL VOXX LTD. AS A COMPARABLE COMPANY. THIS COMPANY WAS NOT REGARDED AS COMPARABLE COMPANY WITH THE ASSESSEE BY THE DRP FOR THE REASONS GIVEN IN PARA 2.15 OF ITS ORDER I.E., FOR THE REASON THAT IN THE FINANCIAL RESULTS, THE AUDITORS HAVE MENTIONED THAT THIS COMPANY WAS PREDO MINANTLY A BUSINESS PROCESS OUTSOURCING (BPO) COMPANY AND THEREFORE THI S COMPANY CANNOT BE SAID TO BE AN ITES COMPANY. THE LEARNED COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THAT IN THE VERY SAME NOTE, THE AUDIT ORS HAVE ALSO MENTIONED THAT THE ONLY REPORTABLE SEGMENT WAS BPO. THEREFORE THIS COMPANY WAS A BPO COMPANY AND THE RESULTS OF THE BPO WHICH IS THE ONLY SEGMENT OUGHT TO HAVE WEIGHED IN THE MIND OF THE TPO TO INCLUDE THIS COMPANY AS A COMPARABLE COMPANY. 25. WE HAVE CONSIDERED THE SUBMISSION OF THE LEARNE D COUNSEL FOR THE ASSESSEE AND ARE OF THE VIEW THAT THE PLEA RAISED B Y THE ASSESSEE IS CORRECT AND THE TPO OUGHT TO HAVE REGARDED THIS COMPANY AS COMPARABLE COMPANY BECAUSE THE ONLY REPORTABLE SEGMENT OF THIS COMPANY WAS BPO. WE DIRECT THE TPO TO INCLUDE THIS COMPANY AS A COMPARABLE COM PANY. FOLLOWING THE ABOVE SAID DECISION, WE DIRECT THE TP O TO INCLUDE THIS COMPANY AS A COMPARABLE COMPANY. 21. IN VIEW OF THE FOREGOING DISCUSSIONS, WE RE STORE THIS ISSUE TO THE FILE OF AO/TPO FOR DETERMINING THE ALP OF THE I NTERNATIONAL TRANSACTIONS RELATING TO ITE SERVICES TO THE FILE O F AO/TPO IN TERMS OF DISCUSSIONS MADE SUPRA. 22. THE NEXT ISSUE URGED BY THE ASSESSEE RELATE S TO THE INCLUSION OF FOREIGN EXCHANGE GAIN AS PART OF PROFITS OF UNDE RTAKING FOR THE PURPOSE OF COMPUTING DEDUCTION U/S 10AA OF THE ACT. THE LD A.R SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF T HE ASSESSEE BY THE ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 21 OF 26 DECISION RENDERED BY HONBLE KARNATAKA HIGH COURT I N THE CASE OF WIPRO LTD (ITA NO.3202/2005) AND ALSO THE DECISION RENDERED BY THE CO-ORDINATE BENCH IN THE CASE OF SANYO LSI TECHNOLO GY INDIA PVT LTD (ITA NO.977/BANG/2010 DATED 13-05-2011. THE DECISI ON RENDERED BY THE CO-ORDINATE BENCH IN THE CASE OF SANYO LSI T ECHNOLOGY INDIA P LTD (SUPRA) IS EXTRACTED BELOW:- 8.1.4. REVERTING BACK TO THE ISSUE UNDER CONSIDERA TION, ON THE FACTS AND CIRCUMSTANCES OF THE ISSUE, WE ARE OF THE CONSIDERE D VIEW THAT THE FOREIGN EXCHANGE FLUCTUATION GAIN WAS DIRECTLY RELATED TO T HE EXPORT ACTIVITY OF THE ASSESSEE. ASSUMING THAT THE ASSESSEE HAD NOT VENTUR ED TO DO ANY EXPORT SALES, THE QUESTION OF FOREIGN EXCHANGE GAIN DIDN'T ARISE. AS SUCH, THE FOREIGN EXCHANGE FLUCTUATION HAD DIRECT NEXUS WITH THE STPI U/T OF THE ASSESSEE WHICH HAS BEEN RIGHTLY INCLUDED BY THE ASSESSEE AS PART OF PROFITS OF THE U/T FOR THE PURPOSE OF COMPUTATION OF DEDUCTION U/S 10 A OF THE ACT . OUR FINDING IS IN CONSONANCE WITH VARIOUS JUDICIAL PRECEDENTS, A FEW OF WHICH ARE DISCUSSED, IN BRIEF, HERE-BELOW: (I) THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT V. M/S. PENTASOFT TECHNOLOGIES LTD . REPORTED IN 2010-TIOL-525-HC-MAD-IT, HAD HELD THA T - 'THE EXCHANGE VALUE BASED ON UPWARD OR DOWNWARD OF THE RUPEE VALUE IS NOT IN THE HANDS OF THE ASSESSEE. THE ASSE SSEE DOES NOT DETERMINE THE EXCHANGE VALUE OF THE INDIAN RUPEE; T HAT WHEN THE FLUCTUATION IN FOREIGN EXCHANGE RATE WAS SOLELY REL ATABLE TO THE EXPORT BUSINESS OF THE ASSESSEE AND THE HIGHER RUPEE VALUE WAS EARNED BY VIRTUE OF SUCH EXPORTS CARRIED OUT BY THE ASSESSEE, THERE WAS NO REASON WHY THE BENEFIT OF S.10A SHOULD NOT BE ALLOW ED TO THE ASSESSEE.' (II) IN THE CASE OF CIT V. GEM PLUS JEWELLERY INDIA LTD . REPORTED IN (2010) 233 CTR (BOM) 248, THE HON'BLE HIGH COURT OF BOMBAY HAS RULED THAT - 'GAIN FROM FLUCTUATION OF FOREIGN EXCHANGE IS DIREC TLY RELATED WITH THE EXPORT ACTIVITIES AND SHOULD BE CONSIDERED AS I NCOME DERIVED FROM EXPORT IN THE YEAR IN WHICH THE EXPORT TOOK PL ACE FOR THE PURPOSE OF DEDUCTION U/S 10 A OF THE ACT . (III) WITH REGARD TO THE FOREIGN EXCHANGE FLUCTUATI ON IS A PART OF 'PROFITS FROM BUSINESS AND PROFESSION, THE HON'BLE APEX COURT IN ITS RULING IN THE CASE OF SUTLEJ COTTON MILLS LTD. V. CIT CITED SUPRA, HAD HELD THUS - 'THE LAW MAY, THEREFORE, NOW BE TAKEN TO BE WELL SETTLED THAT WHE RE PROFIT OR LOSS ARISES TO AN ASSESSEE ON ACCOUNT OF APPRECIATION OR DEPRECIAT ION IN THE VALUE OF FOREIGN CURRENCY HELD BY IT, ON CONVERSION INTO ANO THER CURRENCY, SUCH PROFIT OR LOSS WOULD ORDINARILY BE TRADING PROFIT OR LOSS IF THE FOREIGN CURRENCY IS ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 22 OF 26 HELD BY THE ASSESSEE ON REVENUE ACCOUNT OR AS A TRA DING ASSET OR AS PART OF CIRCULATING CAPITAL EMBARKED IN THE BUSINESS. BUT, IF ON THE OTHER HAND, THE FOREIGN CURRENCY IS HELD AS A CAPITAL ASSET OR AS F IXED CAPITAL, SUCH PROFIT OR LOSS WOULD BE OF CAPITAL NATURE.' IN CONSONANCE WITH THE ABOVE RULING, THE HON'BLE SU PREME COURT IN ITS SUBSEQUENT VERDICT IN THE CASES OF (I) CIT V. WOODWARD GOVERNOR INDIA (P) LIMITED AND (II) IN CIT V. HONDA SIEL POWER PRODUCTS LIMITED REPORTED IN (2009) 312 ITR 254 (SC) OBSERVED THUS - '15. FOR TH E REASONS GIVEN HEREINABOVE, WE HOLD THAT, IN THE PRESENT CASE, THE 'LOSS' SUFFERED BY THE ASSESSEE ON ACCOUNT OF THE EXCHANGE DIFFERENCE AS O N THE DATE OF THE BALANCE SHEET IS AN ITEM OF EXPENDITURE UNDER S. 37(1) OF THE 1961 ACT. 8.1.5. TAKING INTO ACCOUNT THE FACTS OF THE ISSUE A ND ALSO IN CONFORMITY WITH THE LEGAL POSITION OF VARIOUS JUDICIARIES REFERRED IN THE FORE-GOING PARAGRAPHS, WE OBSERVE THAT - (I) THE FOREIGN EXCHANGE GAIN WAS INCOME DERIVED BY EXPORT BUSINESS OF THE ASSESSEE, AND, HENCE, ELIGIBLE FOR DEDUCTION U/S 10 A OF THE ACT ; & (II) THE FOREIGN EXCHANGE GAINS HAS TO BE TAXED UND ER THE HEAD 'INCOME FROM BUSINESS AND PROFESSION'. IT IS ORDERED ACCORDINGLY. FOLLOWING THE ABOVE SAID DECISION, WE DIRECT THE AO TO CONSIDER FOREIGN EXCHANGE GAINS REALISED ON EXPORT PROCEEDS AS INCOME DERIVED FROM EXPORT AND ALLOW DEDUCTION U/S 10AA OF TH E ACT. 23. THE NEXT ISSUE RELATES TO THE ACTION OF THE AO IN SETTING OFF OF BROUGHT FORWARD LOSSES PRIOR TO COMPUTING DEDUCTIO N U/S 10AA OF THE ACT. THE LD A.R SUBMITTED THAT THE HONBLE S UPREME COURT HAS HELD IN THE CASE OF YOKOGAWA INDIA LTD (2017)(7 7 TAXMANN.COM 41) HAS HELD THAT THE STAGE OF DEDUCTION U/S 10A WO ULD BE WHILE COMPUTING GROSS TOTAL INCOME OF ELIGIBLE UNDERTAKING UNDER CHAPTER IV OF THE ACT AND NOT AT STAGE OF COMPUTATI ON OF TOTAL INCOME. 24. WE HEARD LD D.R ON THIS ISSUE. THE HONBLE S UPREME COURT HAS HELD IN THE CASE OF YOKOGAWA INDIA LTD (SUPRA) T HAT THE DEDUCTION U/S 10A HAS TO BE MADE INDEPENDENTLY AND IMMEDIATELY ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 23 OF 26 AFTER THE STAGE OF DETERMINATION OF ITS PROFITS AND G AINS. IT FURTHER HELD THAT, AT THAT STAGE THE AGGREGATE OF THE INCOM ES UNDER OTHER HEADS AND THE PROVISIONS FOR SET OFF AND CARRY FORWA RD CONTAINED IN SECTIONS 70, 72 AND 74 OF THE ACT WOULD BE PREMA TURE FOR APPLICATION. ACCORDINGLY, THE HONBLE SUPREME COURT HELD THAT THE DEDUCTIONS UNDER SECTION 10A THEREFORE WOULD BE P RIOR TO THE COMMENCEMENT OF THE EXERCISE TO BE UNDERTAKEN UNDER CH APTER VI OF THE ACT FOR ARRIVING AT THE TOTAL INCOME OF THE ASS ESSEE FROM THE GROSS TOTAL INCOME. IN THE PRESENT CASE, THE DEDUCT ION CLAIMED BY THE ASSESSEE IS UNDER SECTION 10AA, WHICH IS AKIN TO THE DEDUCTION ALLOWED U/S 10A OF THE ACT. ACCORDINGLY, THE RATIO L AID DOWN BY HONBLE SUPREME COURT IN THE ABOVE SAID CASE SHALL AP PLY TO THE DEDUCTION CLAIMED U/S 10AA OF THE ACT. ACCORDINGLY, WE DIRECT THE AO TO ALLOW DEDUCTION U/S 10AA WITHOUT SETTING OFF OF BROUGHT FORWARD LOSSES. 25. THE NEXT ISSUE RELATES TO THE DEDUCTION OF EXP ENSES INCURRED ON BUY BACK OF SHARES. THIS ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE CO-ORDINATE BENCH IN THE ASSESSE ES OWN CASE RELATING TO AY 2011-12 IN IT(TP)A NO.511 & 686/BANG/ 2016, VIDE ITS ORDER DATED 25.09.2020. RELEVANT DISCUSSIONS MA DE AND DECISION TAKEN BY THE CO-ORDINATE BENCH ARE EXTRACTED BELOW, FOR THE SAKE OF CONVENIENCE:- 4.2 BUY-BACK OF SHARES 4.2.1 DURING THE PREVIOUS YEAR RELEVANT TO ASSESSME NT YEAR, THE ASSESSEE HAD SPENT A SUM OF RS.8,90,961 ON BUY-BACK OF SHARES AN D DEBITED THE SAME TO PROFIT & LOSS ACCOUNT. THE EXPENDITURE WAS DISALLOW ED BY THE AO IN HIS DRAFT ASSESSMENT ORDER HOLDING THE SAME TO BE CAPITAL EXP ENDITURE. 4.2.2 THE DRP IN ITS DIRECTIONS CONFIRMED THE VIEW OF THE AO. THE RELEVANT FINDING OF THE DRP READS AS FOLLOWS:- '16.1 THE ASSESSEE HAS MADE SUBMISSIONS ON THESE OB JECTIONS AND THE SAME HAVE DULY BEEN CONSIDERED. WHEN A COMPANY BUYS BACK SHARES, ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 24 OF 26 IT IS GENERALLY RETURNING THE VALUE OF THE SHARES I N THE FORM OF FACE VALUE AS ORIGINALLY PAID, ACCUMULATED RESERVES AND VALUE OF ASSETS LIKE GOODWILL, ETC. THAT IS NOT RECOGNIZED IN THE B OOKS. SUCH RETURN CAN HARDLY BE TREATED AS BUSINESS EXPENDITURE. THE ACCO UNTING TREATMENT UNDER ACCOUNTING PRINCIPLES AND ALSO UNDER SECTION 77A (AND RELATED PROVISIONS) OF THE COMPANIES ACT , 1956, CLEARLY SUPPORTS THIS. THE FACE VALUE OF SHARES BOUGHT BACK IS REDUCED FROM TH E PAID UP CAPITAL AND THE SURPLUS (PREMIUM) IS DEBITED TO RESERVES SU CH AS SECURITIES PREMIUM ACCOUNT OR OTHER RESERVES (OTHER THAN REVAL UATION RESERVE). THESE PROVISIONS DO NOT PERMIT DEBITING THE AMOUNT PAID TO PROFIT AND LOSS ACCOUNT FOR THE YEAR. SO THERE IS NO INFIRMITY IN THE ORDER OF THE AO AND THE OBJECTION OF THE ASSESSEE IS NOT ACCEPTE D.' 4.2.3 AGGRIEVED BY THE DIRECTIONS OF THE DRP, THE A SSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4.2.4 THE LD. AR SUBMITTED THAT THE ISSUE IN QUESTI ON IS DECIDED IN FAVOUR OF ASSESSEE BY THE JUDGMENT OF THE HON'BLE JURISDICTIO NAL HIGH COURT IN THE CASE OF CIT V. MOTOR INDUSTRIES CO. LTD. - ITA NO .1064/2008 JUDGMENT DATED 31.10.2014 (KARNATAKA HIGH COURT). 4.2.5 THE LD. DR SUPPORTED THE ORDERS OF INCOME-TAX AUTHORITIES. 4.2.6 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD. THE HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT V. MOTOR INDUSTRIES CO. LTD . (SUPRA) HAS HELD AS FOLLOWS:- '26. THE INCREASE IN THE CAPITAL RESULTS IN EXPANSI ON OF THE CAPITAL BASE OF THE COMPANY AND INCIDENTALLY THAT WOULD HEL P IN THE BUSINESS OF THE COMPANY AND MAY ALSO HELP IN THE PROFIT- MAK ING. THE EXPENSES INCURRED IN THAT CONNECTION STILL RETAIN THE CHARAC TER OF A CAPITAL EXPENDITURE SINCE THE EXPENDITURE IS DIRECTLY RELAT ED TO THE EXPANSION OF THE CAPITAL BASE OF THE COMPANY. ISSUE OF BONUS SHARES DOES NOT RESULT IN THE EXPANSION OF CAPITAL BASE OF THE COMP ANY. IT DOES NOT LEAD TO ANY INFLOW OF FRESH FUNDS INTO THE COMPANY. THE CAPITAL STRUCTURE IS NOT EXPANDED. ON THE CONTRARY THE CONSEQUENCE OF SUCH BUY-BACK OF SHARES IS THE CAPITAL BASE OF T HE COMPANY GETS REDUCED AND THE CAPITAL STRUCTURE WILL GO DOWN. IT IS NOT OF AN ENDURING EFFECT SO AS TO BRING THE EXPENDITURE INCU RRED IN THIS REGARD AS CAPITAL EXPENDITURE. WHERE THERE IS NO FLOW OF F UNDS OR INCREASE IN THE CAPITAL EMPLOYED, THE EXPENDITURE INCURRED WOUL D BE REVENUE EXPENDITURE. THEREFORE, RIGHTLY THE TRIBUNAL HELD T HAT IT IS IN THE NATURE OF REVENUE EXPENDITURE AND ALLOWED THE SAME. ' 4.2.7 IN VIEW OF THE JUDGMENT OF THE HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT V. MOTOR INDUSTRIES CO. LTD . (SUPRA), WE HOLD THAT THE EXPENSES INCURRED BY THE ASSESSEE FOR BUY-BACK OF S HARES AMOUNTING TO RS.8,90,961 IS ALLOWED AS A REVENUE EXPENDITURE. IT IS ORDERED ACCORDINGLY. ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 25 OF 26 FOLLOWING THE ABOVE SAID DECISION, WE DIRECT THE AO TO ALLOW THE EXPENSES INCURRED ON BUY BACK OF SHARES. 26. THE NEXT ISSUE RELATES TO THE NON-GRANT OF BROUGHT FORWARD MAT CREDIT. SINCE THIS ISSUE REQUIRES FACTUAL VERIFICA TION, WE RESTORE THIS ISSUE TO THE FILE OF THE AO WITH THE DIRECTION TO E XAMINE THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW. 27. THE NEXT ISSUE RELATES TO CHARGING OF INTER EST U/S 234C OF THE ACT. THE LD A.R SUBMITTED THAT THE INTEREST U/S 23 4C IS CHARGEABLE ON THE RETURNED INCOME. HE SUBMITTED THAT THE AO H AS CHARGED SAID INTEREST ON ASSESSED INCOME. WE FIND MERIT IN THE SUBMISSION OF LD A.R, SINCE IT IS IN ACCORDANCE WITH THE PROVISIONS OF SEC. 234C OF THE ACT. ACCORDINGLY, WE DIRECT THE AO TO CHARGE INTER EST U/S 234C OF THE ACT ON THE RETURNED INCOME. 28. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2010-11 IS TREATED AS PARTLY ALLOWED AND APPEAL FOR THE ASSESSMENT YEAR 2012-13 IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JUL, 2021. SD/- (N.V. VASUDEVAN ) VICE PRESIDENT SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 12 TH JUL, 2021. VG/SPS ITA NO.153/BANG/2017 & ITA 2292/BANG/2019 OCWEN FINANCIAL SOLUTIONS PVT. LTD., BENGALURU PAGE 26 OF 26 COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE.