M/s. Citrix Systems India Private Limited, Bangalore V. Deputy Commissioner Of Income Tax, Circle- 11(2), Bangalore

ITA 2513/BANG/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2314 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 12-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYADARSHI MISRA
• Assessee Lawyers: RISHI HARLALKA
• Keywords: Related party transaction; Depreciation; Transfer pricing
• Section: 92CA

Judgement Text

IT(TP)A NO.2513/BANG/2019 M/S. CITRIX SYSTEMS (INDIA) PVT. LTD. IN THE INCOME TAX APPELLATE TRIBUNAL BBENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUTANT MEMBER IT(TP)A NO.2513/BANG/2019 ASSESSMENTYEAR: 2010-11 M/S. CITRIX SYSTEMS INDIA PRIVATE LIMITED PRESTIGE DYNASTY #33/2, ULSOOR ROAD BANGALORE-560 042 PAN NO :AAACP9889R VS. DEPUTY COMMISSIONER OF INCOME-TAX CIRCLE-11(2) BENGALURU APPELLANT RESPONDENT APPELLANT BY : SHRI RISHI HARLALKA, A.R. RESPONDENT BY : SHRI PRIYADARSHIMISRA, D.R. DATE OF HEARING : 18.02.2020 DATE OF PRONOUNCEMENT : 20.03.2020 O R D E R PERB.R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 30-09-2019 PASSED BY LD CIT(A)-2, BENGALURU A ND IT RELATES TO THE ASSESSMENT YEAR 2010-11. 2. THE GROUND NOS.1 AND 6 ARE GENERAL IN NATURE. AT THE TIME OF HEARING, THE LD A.R DID NOT PRESS GROUND NOS. 3 & 4 BY MAKING NECESSARY ENDORSEMENT IN THE GROUNDS OF APPEAL. TH E REMAINING GROUNDS RELATE TO THE FOLLOWING TWO ISSUES:- (A) WRONG INCLUSION OF CERTAIN COMPARABLE COMPANI ES IT(TP)A NO.2513/BANG/2019 M/S. CITRIX SYSTEMS (INDIA) PVT. LTD. PAGE 2 OF 11 (B) NON-GRANTING OF WORKING CAPITAL ADJUSTMENT AND RISK ADJUSTMENT WHILE COMPUTING TRANSFER PRICING ADJUSTM ENT. 3. THE FACTS OF THE CASE ARE SET OUT IN BRIEF. THE ASSESSEE COMPANY IS ENGAGED IN PROVIDING MARKETING SERVICES IN INDIA TO ITS ASSOCIATED ENTERPRISES (AES) LOCATED ABROAD. THE N ATURE OF SERVICES PROVIDED BY THE ASSESSEE INCLUDE:- (A) ANSWERING CUSTOMER INQUIRIES, TELEMARKETING CA LLS (B) BUILDING AWARENESS ABOUT THE PRODUCTS BY CONDUC TING EXHIBITIONS, ROAD SHOWS, CONFERENCES, CUSTOMER EVEN TS ETC. (C) LIAISON WITH PR AGENCIES FOR MARKETING ACTIVIT IES (D) OTHER RELATED MARKETING SUPPORT TO AES. 4. THE ASSESSEE HAD RECEIVED A SUM OF RS.15.00 CROR ES FROM ITS A.E. ON ACCOUNT OF MARKETING AND TECHNICAL SUPPORT SERVICES. THE ASSESSEE BENCH MARKED THE TRANSACTION UNDER TNM MET HOD BY ADOPTING OP/OC AS PROFIT LEVEL INDICATOR (PLI). TH E PLI OF THE ASSESSEE WAS 10.04% AND THE ARITHMETIC MEAN OF PLI OF THE COMPARABLE COMPANIES SELECTED BY THE ASSESSEE WAS 1 0.72%. ACCORDINGLY, THE ASSESSEE CLAIMED THAT THE INTERNAT IONAL TRANSACTION WITH ITS A.E. WAS AT ARMS LENGTH. THE TPO REJECT ED THE TRANSFER PRICING STUDY OF THE ASSESSEE AND FINALLY SELECTED FOLLOWING 6 COMPARABLE COMPANIES WITH AN ARITHMETIC MEAN OF 24. 48%. SL.NO. NAME OF THE COMPANY OP/COST (%) 1. ASIAN BUSINESS EXHIBITION & CONFERENCES LTD. 58.64 2. CYBER MEDIA RESEARCH LTD. 19.52 3. HCCA BUSINESS SERVICES PVT. LTD. 19.11 4. HINDUSTAN HOUSING CO. LTD. 19.59 5 ICC INTERNATIONAL AGENCIES LTD. 13.27 6. KILLICK AGENCIES & MKTG. LTD. 16.77 AVERAGE 24.48% IT(TP)A NO.2513/BANG/2019 M/S. CITRIX SYSTEMS (INDIA) PVT. LTD. PAGE 3 OF 11 ACCORDINGLY, THE TPO MADE AN ADJUSTMENT OF RS.1.96 CRORES U/S 92CA OF THE ACT. THE A.O. COMPLETED THE ASSESSMENT BY MAKING ABOVE SAID ADDITION. 5. THE ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) CHALLENGING THE TRANSFER PRICING ADJUSTMENT MADE BY THE A.O./TP O. THE LD. CIT(A) NOTICED THAT THE COMPARABLE COMPANY NAMED AS IAN BUSINESS EXHIBITION & CONFERENCES LTD. WAS HELD TO BE NOT A GOOD COMPARABLE BY THE ITAT IN THE ASSESSEES OWN CASE F OR ASSESSMENT YEAR 2011-12. ACCORDINGLY, THE LD. CIT(A) DIRECTED THE AO/TPO TO EXCLUDE ABOVE SAID COMPANY FROM THE FINAL LIST OF C OMPARABLES. THE LD. CIT(A) CONFIRMED OTHER COMPARABLES SELECTED BY THE TPO. 6. BEFORE THE TRIBUNAL, THE ASSESSEE IS SEEKING EX CLUSION OF FOLLOWING THREE COMPANIES: 1. HCCA BUSINESS SERVICES PVT. LTD. 2. KILLICK AGENCIES AND MKTG. LTD. 3. HINDUSTAN HOUSING CO. LTD. THE ASSESSEE IS ALSO SEEKING DIRECTION TO COMPUTE T HE PROFIT MARGIN OF ANOTHER COMPARABLE COMPANY NAMED IDC (INDIA) LIM ITED (EARLIER KNOWN AS CYBER MEDIA RESEARCH LTD) CORRECTLY. 7. IT IS PERTINENT TO NOTE THAT THE ASSESSEE HAS ME NTIONED IN THE GROUNDS OF APPEAL THE NAME OF M/S. ASIAN BUSINESS E XHIBITION & CONFERENCES LTD., FOR EXCLUSION. HOWEVER, THE SAME HAS BEEN AMENDED BY WAY OF AN ADDITIONAL GROUND OF APPEAL BY REPLACING THE ABOVE SAID COMPANY WITH HCCA BUSINESS SERVICES PVT. LTD. 8. WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E LD. A.R. SUBMITTED THAT ALL THESE THREE COMPANIES ARE NOT FU NCTIONALLY IT(TP)A NO.2513/BANG/2019 M/S. CITRIX SYSTEMS (INDIA) PVT. LTD. PAGE 4 OF 11 COMPARABLE. HE FURNISHED BUSINESS PROFILE OF THESE THREE COMPANIES AS UNDER:- (A) HCCA BUSINESS SERVICES P LTD:- THIS COMPANY IS ENGAGED IN HR CONSULTANCY SERVICES LIKE PAYROLL PROCESSING & COMPENSATION STRUCTURING, HR OPERATIONS & ADMINISTRATION, MANAGEMENT OF LABOUR A ND LEGAL COMPLIANCES, REIMBURSEMENT PROCESSING, ACCOUNTING S ERVICES. (B) KILLICK AGENCIES AND MKTG LTD:- THIS COMPANY IS ENGAGED IN THE BUSINESS OF SUPPLYIN G CONSTRUCTION AND EARTHMOVING MACHINERY. FURTHER IT IS ALSO ENGAGED IN THE BUSINESS OF PURCHASE AND SALE OF PRO DUCTS LIKE MICRO SWITCHES, ENGINEERING ITEMS, ACOUSTICS ITEMS, HEAD SETS ETC. IT ALSO FAILS THE 75% SERVICES REVENUE FILTER. (C) HINDUSTAN HOUSING CO. LTD:- THIS COMPANY DOES NOT DERIVE ANY REVENUE FROM MARKE TING ACTIVITY. INSTEAD, IT IS ENGAGED IN PROVIDING DIVE RSIFIED SERVICES LIKE AIR-CONDITIONING SERVICES, LIFT SERVI CES, COMPUTER SERVICES, COMMUNICATION SERVICES, GENERAL ADMINISTR ATIVE SERVICES, PHOTOCOPYING SERVICES, HOUSEKEEPING SERVI CES, DINING ROOM SERVICES, STRONG ROOM SERVICES AND BOAR D ROOM SERVICES. THE RELATED PARTY TRANSACTIONS (RPT) IS 26.97%, I.E., MORE THAN 25% OF TOTAL SALES. THE LD A.R SUBMITTED THAT COORDINATE BENCH, IN THE CASE OF ELECTRONICS FOR IMAGING INDIA PVT. LTD. (2016) 70 T AXMANN.COM 299, HAS EXCLUDED M/S. HCCA BUSINESS SERVICES PVT. LTD. AND KILLICK AGENCIES AND MKTG. LTD. FROM THE LIST OF COMPARABLE S. HE FURTHER SUBMITTED THAT M/S. HINDUSTAN HOUSING COMPANY LTD. WAS RESTORED TO THE AO/TPO TO EXAMINE THE RPT FILTER BY THE CO-ORDINATE IT(TP)A NO.2513/BANG/2019 M/S. CITRIX SYSTEMS (INDIA) PVT. LTD. PAGE 5 OF 11 BENCH IN THE CASE OF ITO VS. ALCON LABORATORIES PVT . LTD. (2017) 88 TAXMANN.COM 240. 9. WE HEARD LD. D.R. AND PERUSED THE RECORD. WE NO TICED THAT THE COORDINATE BENCH IN THE CASE OF ELECTRONICS FOR IMAGING INDIA PVT. LTD. (PERTAINING TO AY 2010-11) HAS EXCLUDED M /S. HCCA BUSINESS SERVICES PVT. LTD. AND KILLICK AGENCIES AN D MKTG. LTD. WITH THE FOLLOWING OBSERVATIONS: 40. THE ASSESSEE CHALLENGED THE ACTION OF TPO BEFORE T HE DRP. THE DRP EXCLUDED 3 OUT OF 6 COMPARABLE COMPANIES SE LECTED BY THE TPO AGAINST WHICH REVENUE HAS FILED APPEAL BEFO RE US. WE WILL DISCUSS COMPARABILITY OF TWO COMPANIES WHICH A RE EXCLUDED BY THE DRP AND CHALLENGED BY THE REVENUE AS UNDER:- (1) HCCA BUSINESS SERVICES PVT. LTD. 41. THE ASSESSEE OBJECTED AGAINST INCLUSION OF THIS CO MPANY IN THE LIST OF COMPARABLES ON THE GROUND THAT THIS COM PANY IS ENGAGED IN PROVIDING PAYROLL PROCESS SERVICES AND T HEREFORE IT IS FUNCTIONALLY DIFFERENT. IN SUPPORT OF ITS CONTENTIO N, THE ASSESSEE REFERRED TO NOTES TO THE ACCOUNTS WHEREIN THE COMPA NY'S OPERATIONS COMPRISE OF PAYROLL PROCESSING SERVICES IS MENTIONED AND HENCE IT IS NOT POSSIBLE TO GIVE THE QUANTITATI VE DETAILS OF SALES AND CERTAIN INFORMATION SEPARATELY. 42. THE DRP AFTER CONSIDERING THE ANNUAL REPORT NOTED THAT EXCEPT THE NOTE 2.14, THERE IS NO OTHER OBSERVATION IN THE ANNUAL REPORT FROM WHICH IT CAN BE ESTABLISHED THAT THE COMPANY IS ENGAGED IN MARKETING AND SALES SUPPORT SERVICES COM PARABLE TO THE ASSESSEE. ACCORDINGLY, THE DRP DIRECTED THE AO TO EXCLUDE THE SAID COMPANY FROM THE COMPARABLES. 43. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND CON SIDERED THE RELEVANT MATERIAL ON RECORD. THE DRP HAS CONSID ERED THE FACT THAT PAYROLL PROCESSING SERVICES WAS MAIN PART OF T HE OPERATIONS OF THE COMPANY AND QUANTITATIVE DETAILS OF SALES AN D CERTAIN INFORMATION AS REQUIRED UNDER PART II OF SCHEDULE V I TO IT(TP)A NO.2513/BANG/2019 M/S. CITRIX SYSTEMS (INDIA) PVT. LTD. PAGE 6 OF 11 COMPANIES ACT WAS NOT POSSIBLE. THUS, IN THE ABSENC E OF ANY CONTRARY FACT ON RECORD BROUGHT BEFORE US, WE DO NO T FIND ANY REASON TO INTERFERE WITH THE FINDING OF THE DRP, WH EN THE FUNCTIONS AND BUSINESS ACTIVITY OF THIS COMPANY WAS FOUND TO BE DIFFERENT FROM MARKETING AND SALES SUPPORT SERVICES OF THE ASSESSEE. ACCORDINGLY, THE OBJECTION OF THE REVENUE IS REJECTED. (2) KILLICK AGENCIES & MARKETING LTD . 44. THE ASSESSEE OBJECTED AGAINST THIS COMPANY ON THE GROUND THAT COMMISSION/SERVICE CHARGES INCOME OF THIS COMP ANY IS RS. 2,19,00,000 OUT OF THE OPERATING REVENUE OF RS. 3,3 9,00,000. THEREFORE, THE COMMISSION/SERVICE CHARGES INCOME CO NSTITUTE ABOUT 65% OF THE OPERATING REVENUE WHICH IS LESS TH AN 75% OF THE OPERATING REVENUE FILTER APPLIED BY THE TPO. IN THE ABSENCE OF SEGMENTAL RESULTS, THIS COMPANY WAS SOUGHT TO BE EXCLUDED FROM THE SET OF COMPARABLES. 45. THE DRP FOUND THAT THIS COMPANY CONDUCTS BUSINESS AS AN AGENT OF THE FOREIGN PRINCIPAL AND DEAL IN MARITIME EQUIPMENTS. FURTHER, THE RECEIPTS ARE MAINLY IN THE NATURE OF C OMMISSION INCOME AND SERVICE CHARGES. THEREFORE, THIS COMPANY WAS FUNCTIONALLY DISSIMILAR TO THAT OF ASSESSEE. 46. WE HAVE HEARD THE LD. DR AS WELL AS LD. AR AND CON SIDERED THE RELEVANT MATERIAL ON RECORD. 47. THE LD. DR HAS SUBMITTED THAT THE TPO HAS CONSIDER ED THE RELEVANT INFORMATION AS REPORTED IN THE ANNUAL REPO RT OF THE COMPANY AND IT WAS FOUND THAT THIS COMPANY IS ACTIN G AS AN AGENT FOR VARIOUS FOREIGN PRINCIPALS FOR SALE OF DR EDGERS, DREDGING EQUIPMENT AND ALSO OFFERS AFTER SALES SERV ICE. THEREFORE, THIS COMPANY WAS FOUND TO BE IN THE BUSI NESS OF MARKETING SUPPORT SERVICES WHICH IS SIMILAR TO THE ASSESSEE. 48. ON THE OTHER HAND, THE LD. AR HAS SUBMITTED THAT T HIS COMPANY IS ENGAGED IN THE BUSINESS OF CONSTRUCTION EQUIPMENTS AND EARTH MOVING MACHINERY AND IS NOT INTO MARKETIN G SUPPORT SERVICES. 49. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD, WE NOTE THAT IN THE PROFIT & LO SS ACCOUNT FOR THE YEAR UNDER CONSIDERATION, THIS COMPANY HAS SHOW N SALES IT(TP)A NO.2513/BANG/2019 M/S. CITRIX SYSTEMS (INDIA) PVT. LTD. PAGE 7 OF 11 (EXPORT OF RS. 1,18,00,000 AND COMMISSION/SERVICE C HARGES OF RS. 2,19,00,000. THEREFORE, EXPORT INCOME REVENUE O F THIS COMPANY IS LESS THAN 75% OF THE TOTAL REVENUE, A FI LTER APPLIED BY THE TPO. ONCE THE TPO HAS APPLIED A FILTER OF 75% O F EXPORT SALE, THEN THIS COMPANY WHICH FAILS THE FILTER APPL IED BY THE TPO CANNOT BE CONSIDERED AS A GOOD COMPARABLE. FURTHER, WE NOTE THAT THIS COMPANY IS ENTIRELY IN A DIFFERENT ACTIVI TY WITH THAT OF THE ASSESSEE. UNDISPUTEDLY, THIS COMPANY IS ACTING AS AGENT FOR VARIOUS FOREIGN PRINCIPALS FOR SALE OF DREDGERS, DR EDGING EQUIPMENT, STEERABLE RUDDER PROPULSIONS AND OTHER E QUIPMENTS AND MACHINERIES. ACCORDINGLY, WE DO NOT FIND ANY ER ROR OR ILLEGALITY IN THE FINDINGS OF THE DRP AND DIRECT TH E AO TO EXCLUDE THIS COMPANY FROM THE COMPARABLES. 10. WE NOTICE THAT M/S HCCA BUSINESS SERVICES P LTD IS ENGAGED IN PAYROLL PROCESSING SERVICES AND THE SAME HAS BEE N HELD TO BE NOT COMPARABLE WITH A COMPANY ENGAGED IN PROVIDING MARK ETING SERVICES BY THE CO-ORDINATE BENCH IN THE CASE OF EL ECTRONICS FOR IMAGING INDIA P LTD (SUPRA). THOUGH IT WAS NOT THE ONLY REASON FOR EXCLUDING THIS COMPANY BY THE CO-ORDINATE BENCH, WE ARE OF THE VIEW THAT THE DECISION TAKEN THEREIN CAN BE CONVENI ENTLY APPLIED HERE ALSO. ACCORDINGLY, WE DIRECT THE AO/TPO TO EX CLUDE THIS COMPANY. 11. WITH REGARD TO KILLICK AGENCIES AND MKTG. LT D, THE MAIN BUSINESS OF THE COMPANY AS MENTIONED IN ITS ANNUAL REPORT (PAGE 843 OF PAPER BOOK) IS GIVEN BELOW:- KILLICK AGENCIES & MARKETING LTD IS PUBLIC LIMITED COMPANY. COMPANY IS ACTING AS AGENT FOR VARIOUS FOREIGN PRIN CIPALS FOR SALE OF DREDGERS, DREDGING EQUIPMENTS, STEERABLE RU DDER PROPULSIONS, MARITIME AND AVIATION LIGHTING, ACOUST IC COMMUNICATION EQUIPMENTS ETC. COMPANY ALSO OFFERS AFTER SALES SERVICES. APART FROM THIS COMPANY IS INVOLVED IN EXPORT IT(TP)A NO.2513/BANG/2019 M/S. CITRIX SYSTEMS (INDIA) PVT. LTD. PAGE 8 OF 11 OF MICRO SWITCHERS, ENGINEERING ITEMS, ACOUSTIC ITE MS & HEAD SETS. HOWEVER, THE BUSINESS PROFILE OF THE ASSESSEE COMPA NY IS NOTED BY THE TPO AS UNDER:- (A) ANSWERING CUSTOMER INQUIRIES, TELEMARKETING CAL LS (B) BUILDING AWARENESS ABOUT THE PRODUCTS BY CONDUC TING EXHIBITIONS, ROAD SHOWS, CONFERENCES, CUSTOMER EVEN TS ETC. (C) LIAISON WITH PR AGENCIES FOR MARKETING ACTIVIT IES (D) OTHER RELATED MARKETING SUPPORT TO AES. WE NOTICE THAT THE TPO HAS SELECTED THIS COMPANY AS GOOD COMPARABLE ONLY FOR THE REASON THAT THIS COMPANY IS ALSO PROVIDING MARKET SUPPORT SERVICES. WHILE M/S KILLICK AGENCIE S & MARKETING LTD., IS ACTING AS MARKETING AGENT FOR FOREIGN COMP ANIES FOR THEIR PRODUCTS, THE ASSESSEE IS SEEN PROVIDING MARKETING SUPPORT SERVICES TO ITS AE. THE FORMER IS MARKETING THE PRODUCTS ON COMMISSION BASIS, WHILE THE ASSESSEE IS ONLY PROVIDING ONLY SU PPORT SERVICES. HENCE, IN OUR VIEW, FUNCTIONS PERFORMED BY BOTH THE COMPANIES ARE DIFFERENT. ACCORDINGLY WE DIRECT EXCLUSION OF M/S KILLICK AGENCIES & MARKETING LTD FROM THE LIST OF COMPARABLES. 12. IN RESPECT OF HINDUSTAN HOUSING CO. LTD, THE CO NTENTION OF THE ASSESSEE WAS THAT THIS COMPANY WAS PROVIDING VA RIOUS TYPES OF SERVICES. ANOTHER CONTENTION RAISED WAS THAT THE R ELATED PARTY TRANSACTION OF THIS COMPANY EXCEEDS 25%. WE NOTICE THAT THE CO- ORDINATE BENCH HAS RESTORED THIS COMPANY TO THE FIL E OF AO/TPO FOR EXAMINING IT AFRESH IN THE CASE OF ALCON LABORATORI ES P LTD (SUPRA). ACCORDINGLY, FOLLOWING THE ABOVE SAID DECISION, WE RESTORE THIS COMPARABLE COMPANY TO THE FILE OF AO/TPO FOR EXAMIN ING AFRESH BY CONSIDERING THE RPT FILTER ALSO. IT(TP)A NO.2513/BANG/2019 M/S. CITRIX SYSTEMS (INDIA) PVT. LTD. PAGE 9 OF 11 13. THE ASSESSEE HAS ALSO RAISED A GROUND CONTENDIN G THAT THE MARK UP OF IDC INDIA LTD. (CYBER MEDIA RESEARCH LTD .) HAS BEEN WRONGLY COMPUTED BY THE TPO. IT IS THE SUBMISSION OF THE LD A.R THAT THE TPO HAS NOT INCLUDED DEPRECIATION AS PAR T OF OPERATING COST AND WRONGLY INCLUDED FINANCIAL COST AS PART OF OPERATING COST. THE LD. A.R. SUBMITTED THAT THE FINANCIAL COST DOES NOT FORM PART OF OPERATING COST AND DEPRECIATION SHOULD BE INCLUDED IN THE OPERATING COST. 14. WE HEARD LD. D.R. AND PERUSED THE RECORD. THER E SHOULD NOT BE ANY DOUBT THAT, WHILE COMPUTING OPERATING COST , A UNIFORM PRACTICE SHOULD BE FOLLOWED FOR ALL THE COMPARABLE COMPANIES. IT IS THE SUBMISSION OF THE ASSESSEE THAT DEPRECIATION FO RMS PART OF OPERATING COST, WHILE THE FINANCIAL EXPENSES DOES N OT. WE NOTICE THAT THE ASSESSEE HAS TAKEN A GENERAL GROUND BEFORE LD CIT(A) AND HENCE IT APPEARS THAT THE LD CIT(A) HAS NOT ADJUDIC ATED THE SAME. BEFORE US, THE ASSESSEE HAS TAKEN A SPECIFIC GROUND IN RESPECT OF IDC INDIA LTD. (CYBER MEDIA RESEARCH LTD.). AS OBS ERVED BY US, A UNIFORM METHODOLOGY SHOULD BE FOLLOWED WHILE DETERM INING OPERATING COST. IT IS NOT CLEAR AS TO WHETHER THE SAME METHOD WAS FOLLOWED IN RESPECT OF THE ASSESSEE AS WELL AS IN R ESPECT OF OTHER COMPARABLE COMPANIES. HENCE, THIS ISSUE REQUIRES E XAMINATION AT THE END OF AO/TPO. ACCORDINGLY, WE RESTORE THIS IS SUE TO THE FILE OF AO/TPO FOR EXAMINING IT. 15. THE ASSESSEE IN GROUND NO.5 HAS CONTENDED THAT THE WORKING CAPITAL ADJUSTMENT AND RISK ADJUSTMENT SHOULD BE GI VEN TO THE ASSESSEE. THE LD. A.R. SUBMITTED THAT THE ASSESSEE HAS CLAIMED THIS ADJUSTMENT BEFORE LD. CIT(A) AND ACCORDINGLY, THE LD. CIT(A) CALLED FOR REMAND REPORT FROM THE A.O. THE TPO HAS EXPRESSED THE IT(TP)A NO.2513/BANG/2019 M/S. CITRIX SYSTEMS (INDIA) PVT. LTD. PAGE 10 OF 11 VIEW THAT THESE ADJUSTMENTS COULD NOT BE GIVEN FOR WANT OF REQUIRED DETAILS. THE LD. A.R. SUBMITTED THAT THE WORKING C APITAL ADJUSTMENT AND RISK ADJUSTMENTS ARE GIVEN IN VARIOUS CASES AND ACCORDINGLY PLEADED THAT SUITABLE DIRECTION MAY BE ISSUED TO TH E AO/TPO. 16. WE HEARD THE LD. D.R. ON THIS ISSUE AND PERUSED THE RECORD. IT IS STATED BY THE AO/TPO IN THE REMAND REPORT THA T THE REQUIRED DETAILS WERE NOT FURNISHED BY THE ASSESSEE. HENCE WE DIRECT THE ASSESSEE TO FURNISH REQUIRED DETAILS TO THE AO/TPO. SINCE THIS ISSUE ALSO REQUIRES EXAMINATION AT THE END OF THE A .O./TPO, WE RESTORE THIS ISSUE ALSO TO THEIR FILE. 17. AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEIN G HEARD, THE AO/TPO MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW. 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20.03.2020. SD/- (N.V. VASUDEVAN) VICE PRESIDENT SD/- (B.R. BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED 20 TH MARCH, 2020. /VG/ IT(TP)A NO.2513/BANG/2019 M/S. CITRIX SYSTEMS (INDIA) PVT. LTD. PAGE 11 OF 11 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.