Xchanging Solutions Ltd, Bengaluru V. Deputy Commissioner of Income Tax, Corporate Circle-7(1)(2), Bengaluru

ITA 2664/BANG/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 0426 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 21-12-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 08-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Related party transaction; Transfer pricing; International transaction; Rule of consistency; Set aside
• Section: 143(3); 144C; 13; 92CA; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES C BENCH: BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOU NTANT MEMBER IT (TP) A NO. 2664 /BANG/201 7 (ASSESSMENT YEAR: 20 13 - 14 ) M/S. XCHNGING SOLUTIONS LIMITED, XCHANGING TOWER, SJR PARK, EPIP AREA, WHITEFIELD, BANGALORE - 560 066 .APPELLANT PAN AAFCS 9303L VS. DY. COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 7(1)(2), BANGALORE. RESPONDENT. ASSESSEE BY: SHRI AJIT KUMAR JAIN, C.A. REVENUE BY: SHRI PRADEEP KUMAR, CIT (D.R) DATE OF HEARING : 21.12. 20 20. DATE OF PRONOUNCEMENT : 21 .12. 20 20. O R D E R PER SHRI CHANDRA POOJARI , A M : T H IS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ASSESSMENT ORDER DT.06.10.2017 PASSED U/S. 143(3) R.W.S. 144C(13) OF THE INCOME TAX ACT, 1961 ('THE ACT') FOR THE ASSESSMENT YEAR 2013 - 14. 2. THE ASSESSEEHAS RAISED THE FOLLOWING CONSOLIDATED GROU NDS : 2 IT (TP) A NO. 2664/BANG/2017 1. GENERAL 1.1 BASED ON THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AND IN LAW, THE FINAL ORDER PASSED BY LD. ASSESSING OFFICER (`LD. AO') BEING PASSED NOT IN CONFORMITY WITH THE DIRECTIONS ISSUED BY THE DISPUTE RESOLUTION PANEL ('HON'BLE DRP '), IS BAD IN LAW AS PER PROVISIONS OF SECTION 144C(10) R.W.S. 144C(13) OF THE INCOME - TAX ACT, 1961 ('THE ACT') AND HENCE LIABLE TO BE QUASHED. 1.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. TPO/ THE LD. AO UNDER THE DIRECTIONS I SSUED BY THE HON'BLE DRP, ERRED IN MAKING AN ADDITION TO THE APPELLANT'S TOTAL INCOME OF INR 8,67,23,600 BASED ON THE PROVISIONS OF CHAPTER X OF THE ACT. 1.3 THE HON'BLE DRP ERRED IN LAW BY UPHOLDING/ CONFIRMING THE ACTION OF THE LD. TPO IN NOT SATISFYING ANY OF THE CONDITIONS PRESCRIBED UNDER SECTION 92C(3) OF THE ACT BEFORE MAKING AN ADJUSTMENT TO THE INCOME OF THE APPELLANT. 2. GROUNDS IN RELATION TO INCORRECT MARGIN COMPUTATION OF THE APPELLANT 2.1 THE HON'BLE DRP FAILED TO ADJUDICATE ON THE GROUND O F OBJECTION RAISED BY THE APPELLANT IN RELATION TO THE SEGMENTAL MARGIN OF THE AE SEGMENT, CONTRARY TO THE PRINCIPLES OF CONSISTENCY AND PROVISIONS OF CHAPTER X OF THE ACT. 2.2 THE LD. TPO ERRED, IN LAW AND ON FACTS, IN REJECTING THE NET COST PLUS MARK - UP (`NCP') MARGIN COMPUTED BY THE APPELLANT IN ITS TRANSFER PRICING STUDY IN RESPECT OF THE INCOME EARNED FROM PROVISION OF SOFTWARE SERVICES TO ITS ASSOCIATED ENTERPRISES (`AES'). 2.3 THE LD. TPO GROSSLY ERRED IN LAW AND ON FACTS BY MAKING A TRANSFER PRICING ADJUSTMENT ON THE ENTIRE REVENUE INCLUDING THIRD PARTY REVENUE, WITHOUT RESTRICTING THE ADJUSTMENT TO THE PROPORTION OF INTERNATIONAL TRANSACTIONS OF THE APPELLANT. 2.4 THE LD. TPO ERRED IN ERRONEOUSLY DISREGARDING THE SEGMENTAL APPROACH ADOPTED BY THE AP PELLANT WITHOUT APPRECIATING THE COMMERCIAL CONSIDERATIONS OF THE BUSINESS OF THE APPELLANT AND WITHOUT PROVIDING ANY COGENT REASONS FOR THE SAME. 3 IT (TP) A NO. 2664/BANG/2017 2.5 THE LD. TPO ERRED IN NOT CONSIDERING THAT THE APPELLANT CONTINUES TO EARN SIGNIFICANT INCOME FROM THIRD P ARTY CUSTOMERS (51% APPROX.) AS IN THE CASE OF PREVIOUS YEARS AND ACCORDINGLY AN ENTITY LEVEL APPROACH MAY NOT TRULY REFLECT THE OUTCOME OF TRANSACTIONS OF THE APPELLANT WITH ITS AES THE HON'BLE DRP/ LD. TPO FAILED TO APPRECIATE THAT THERE HAS BEEN NO CHAN GE IN THE BUSINESS OPERATING MODEL OF THE APPELLANT DURING THE AY 2013 - 14 REQUIRING A DIFFERENT APPROACH FOR DETERMINATION OF ARM'S LENGTH PRICE IN RESPECT OF PROVISION OF SOFTWARE SERVICES. 2.6 THE LD. TPO ERRED IN NOT CONSIDERING THE SEGMENTAL MARGINS OF THE APPELLANT TO DETERMINE THE ARM'S LENGTH NATURE OF THE INTERNATIONAL TRANSACTIONS WHICH WAS ACCEPTED IN THE PREVIOUS ASSESSMENT YEARS AS WELL AS THE SUBSEQUENT ASSESSMENT YEAR, THEREBY NOT FOLLOWING THE PRINCIPLE OF CONSISTENCY. 2.7 WITHOUT PREJUDICE T O THE ABOVE, THE LD. TPO ERRED IN NOT CONSIDERING THE OTHER OPERATING INCOME OF THE APPELLANT AS PART OF OPERATING REVENUE IN COMPUTING THE NCP MARGIN OF THE APPELLANT FOR FY 2012 - 13. 3. GROUNDS IN RELATION TO REJECTION OF THE TRANSFER PRICING ANALY SIS CONDUCTED BY XSL AND CHOICE OF COMPARABLES ERRONEOUS REJECTION OF TRANSFER PRICING STUDY OF THE APPELLANT 3.1 THE HON'BLE DRP/ LD. TPO ERRED ON FACTS AND IN LAW IN DISREGARDING THE TRANSFER PRICING ANALYSIS CONDUCTED BY THE APPELLANT FOR ESTABLISHING THE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS OF THE APPELLANT WITHOUT PROVIDING COGENT REASONS. .3.2 THE HON'BLE DRP/ LD. TPO ERRED ON FACTS AND IN LAW IN CONDUCTING A FRESH BENCHMARKING ANALYSIS USING 'NON - CONTEMPORANEOUS' DATA AND SUBSTITUTIN G THE APPELLANT'S ANALYSIS WITH THE FRESH BENCHMARKING ANALYSIS ON HIS OWN CONJECTURES AND SURMISES. THUS THE APPELLANT PRAYS THAT THE FRESH BENCHMARKING ANALYSIS CONDUCTED BY THE LD. TPO IS LIABLE TO BE QUASHED. ERRONEOUS SELECTION / REJECTION OF COMPARAB LE COMPANIES 4 IT (TP) A NO. 2664/BANG/2017 3.3 THE HON'BLE DRP/ LD. TPO ERRED ON THE FACTS AND IN LAW IN VIOLATING THE PROVISIONS OF RULE 10B(2) OF THE RULES BY ARBITRARILY REJECTING THE COMPANIES SELECTED BY THE APPELLANT IN THE TP DOCUMENTATION, WHICH ARE FUNCTIONALLY COMPARABLE TO T HE APPELLANT. AKSHAY SOFTWARE TECHNOLOGIES LIMITED CAT TECHNOLOGIES LIMITED CIGNITI TECHNOLOGIES LIMITED SASKEN COMMUNICATION TECHNOLOGIES LIMITED THINKSOFT GLOBAL SERVICES LIMITED 3.4 THE HON'BLE DRP/ LD. TPO ERRED ON THE FACTS AND IN LAW IN AR BITRARILY REJECTING FUNCTIONALLY COMPARABLE COMPANIES ON THE BASIS OF NON - AVAILABILITY OF FINANCIAL DATA FOR FY 2012 - 13. MARVERIC SYSTEMS LIMITED YBRANT DIGITAL LIMITED 3.5 THE HON'BLE DRP/ LD. TPO ERRED ON THE FACTS AND IN LAW IN ARBITRARILY REJECTING FUNCTIONALLY COMPARABLE COMPANIES WITH DIFFERENT YEAR ENDING (I.E. OTHER THAN 31 MARCH 2013) CALIBER POINT BUSINESS SOLUTIONS LIMITED HELIOS AND MATHESON INFORMATION TECHNOLOGY LIMITED LUCID SOFTWARE LIMITED SILVERLINE TECHNOLOGIES LIMITED 3.6 TH E HON'BLE DRP/ LD. TPO ERRED ON THE FACTS AND IN LAW IN ARBITRARILY REJECTING FUNCTIONALLY COMPARABLE COMPANIES AS HAVING EMPLOYEE COST LESS THAN 25% OF TURNOVER. ZYLOG SYSTEMS LIMITED 3.7 THE HON'BLE DRP/ LD. TPO ERRED ON THE FACTS AND IN LAW IN ARBITR ARILY REJECTING FUNCTIONALLY COMPARABLE COMPANIES AS HAVING EXPORT SERVICE INCOME LESS THAN 75% OF TURNOVER. BLUESTAR INFOTECH LIMITED - (CONSOLIDATED) 5 IT (TP) A NO. 2664/BANG/2017 GOLDSTONE TECHNOLOGIES LIMITED PRIYA SOFTWEB SOLUTIONS PRIVATE LIMITED 3.8 THE HON'BLE DRP/ LD. TP O ERRED ON THE FACTS IN INCORRECTLY COMPUTING THE RATIO OF RELATED PARTY TRANSACTIONS TO SALES AND CONCLUDING THE RATIO OF RPT TO BE MORE THAN 25% OF TURNOVER. R SYSTEMS INTERNATIONAL LIMITED (SEGMENT) 3.9 THE HON'BLE DRP/ LD. TPO ERRED ON THE FACTS AND IN LAW IN VIOLATING THE PROVISIONS OF RULE L OB(2) BY INTRODUCING NEW COMPANIES WITHOUT CONSIDERING THE DIFFERENCES IN THE FUNCTIONS PERFORMED, ASSETS EMPLOYED AND RISKS ASSUMED BY SUCH COMPANIES VIS - A - VIS THE APPELLANT, THEREBY RESORTING TO UNSUBSTANTIATE D SELECTION OF COMPARABLES. PERSISTENT SYSTEMS LIMITED TECH MAHINDRA LIMITED LARSEN & TOUBRO INFOTECH LIMITED 3.10 (A). THE HON'BLE DRP/ LD. TPO ERRED IN NOT ALLOWING THE ECONOMIC ADJUSTMENTS FOR DIFFERENCES IN THE RISK PROFILE OF THE APPELLANT AND OF THE COMPARABLES. (B). THE HON'BLE DRP ERRED ON FACTS AND IN LAW IN REJECTING THE WORKING CAPITAL ADJUSTMENT COMPUTED BY THE APPELLANT AND WHICH WAS ALLOWED BY THE LD. TPO, BY ARBITRARILY STATING THAT THE APPELLANT HAS FAILED TO DEMONSTRATE THE EFFECT OF NEGATIVE WORKING CAPITAL ON THE MARGINS OF THE APPELLANT. 3.11 THE LD. TPO ERRED IN LAW AND ON FACTS BY NOT GIVING EFFECT TO THE DIRECTIONS OF THE HON'BLE DRP IN RELATION TO THE COMPARABLES - EVOKE TECHNOLOGIES LIMITED (I.E. TO BE INCLUDED) AND ICRA TECHN O ANALYTICS LIMITED (I.E. TO BE EXCLUDED) IN THE FINAL SET OF COMPARABLES. 3.12 HON'BLE DRP/LD. TPO OUGHT TO HAVE APPLIED THE UPPER TU RN OVER FILTER AND SELECT THE COMPANIES AS COMPARABLES AFTER CONSIDERING THE TU RN OVER AND SIZE OF THE APPELLANT. 4. GROUNDS IN RELATION TO INCORRECT MARGIN COMPUTATION OF THE COMPARABLES 4.1 THE HON'BLE DRP/ LD. TPO ERRED ON THE FACTS AND INCORRECTLY COMPUTED NCP MARGINS OF THE COMPARABLE COMPANIES BY CONSIDERING FINANCIAL DATA FROM THE DATABASE(S), DISREGARDING THE ANNUAL REP O RT S FILED BY THE APPELLANT FOR SUCH COMPANIES DURING THE ASSESSMENT PROCEEDINGS. 6 IT (TP) A NO. 2664/BANG/2017 3. AT THE TIME OF HEARING, THE LEARNED AUTHORISED REPRESENTATIVE PRIMARILY ARGUED THE GROUND NO.1.1 WHICH READS AS FOLLOWS : 1.1 BASED ON THE FACTS AND CIRCUMSTAN CES OF THE PRESENT CASE AND IN LAW, THE FINAL ORDER PASSED BY LD. ASSESSING OFFICER (`LD. AO') BEING PASSED NOT IN CONFORMITY WITH THE DIRECTIONS ISSUED BY THE DISPUTE RESOLUTION PANEL ( DRP'), IS BAD IN LAW AS PER PROVISIONS OF SECTION 144C(10) R.W.S. 144C (13) OF THE INCOME - TAX ACT, 1961 ('THE ACT') AND HENCE LIABLE TO BE QUASHED. HE SUBMITTED THAT ORIGINALLY THE ASSESSING OFFICER MADE TRANSFER PRICING ADJUSTMENT AT RS.8,67,23,600 IN HIS ORDER PASSED U/S. 92CA OF THE ACT DT.4.10.2016. THE DISPUTE RESOLUT ION PANEL (DRP) GIVEN CERTAIN RELIEF VIDE ORDER DT.19.09.2017 REGARDING INCLUSION OF EVOKE TECHNOLOGIES LIMITED AND EXCLUSION OF ICRA TECHNO ANALYTICS LIMITED FROM THE LIST OF COMPARABLES. HOWEVER, THE ASSESSING OFFICER WHILE PASSING THE FINAL ASSESSMENT ORDER DETERMINED THE TRANSFER PRICING ADJUSTMENT AT RS.8,67,23,600 WITHOUT ADHERING TO THE DIRECTIONS OF DRP. ACCORDING TO THE LD. AR, THE FINAL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER SHOULD BE BAD IN LAW AND SHOULD BE QUASHED. SINCE THE FI NAL ASSESSMENT ORDER IS NOT IN CONFORMITY WITH THE DIRECTIONS OF THE DRP, IT SHOULD BE CANCELLED. HE REL I ED ON THE FOLLOWING JUDGMENTS OF THE TRIBUNAL : I) M/S. FLEXTRONICS TECHNOLOGIES (INDIA) PVT. LTD. IN IT(TP)A NO.832/BANG/2017. II) M/S. SOFTWARE PARADIGMS INFOTECH PVT. LTD. IN IT(TP)A NO.150/BANG/2014. III) M/S. LENOVO INDIA PVT. LTD. IN IT(TP)A NO.580 & 581/BANG/2015 IV) M/S. ESPN STAR SPORTS MAURITIUS S N C E T COMPANIES IN W P. (C) 2384/2015 &CM NO.4277/2015 (DELHI HIGH COURT). V) M/S. JULY SYSTEMS & TECHNOLOGI E S PV T. LTD. IN IT(TP)A NO.368/BANG/2016. 7 IT (TP) A NO. 2664/BANG/2017 4. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE FINAL ASSESSMENT ORDER NOT TO BE CANCELLED AND IT MAY BE SET ASIDE TO THE FILE OF ASSESSING OFFICER TO PASS ORDER IN CONFORMITY WITH THE DRP DIRECTIONS AND NON - PASSING OF THE ORDER BY ASSESSING OFFICER IN CONSONANCE WITH THE DRP CANNOT MAKE HIS ORDER NULL AND VOID AS THIS IS A CURABLE MISTAKE. HE RELIED ON THE DECISION OF DELHI BENCH OF ITAT IN THE CASE OF H & M HENNES & MARUTIZ (INDIA ) LTD. VS. ACIT 25 TXMANN.COM 510. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. SIMILAR ISSUE CAME UP FOR CONSIDERATION IN THE CASE OF FLEXTRONICS TECHNOLOGIES (INDIA) PVT. LTD. VS. ACIT IN IT(TP)A NO.832/BANG/2017 DT.31.12. 2018 HAS HELD IN PARAS 9 TO 12 AS UNDER : 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT ON IDENTICAL FACTS, THIS TRIBUNAL IN THE CASE OF SOFTWARE PARADIGMS INFOTECH (P.) LTD. (SUPRA) HAS QUASHED THE FINAL ORDER OF ASSESSMENT OBSERVING AS FOLLOWS: - 3.3.1 WE HAVE HEARD THE RIVAL CONTENTION OF BOTH PARTIES IN THE MATTER AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. THE UNDISPUTED FACTS ON RECORD, AS BROUGHT OUT BY THE DISCUSSIONS ABOVE, IS THAT THE AO, AS PER LAW, WAS REQUIR ED TO PASS THE FINAL ORDER OF ASSESSMENT DATED 17/1/2014 FOR ASST. YEAR 2009 - 10 U/S 143(3) R.W.S 144C OF THE ACT IN CONFORMITY WITH THE DIRECTIONS ISSUED BY THE DRP U/S 144C(5) OF THE ACT, WHICH ARE BINDING ON HIM AS PER SECTION 144C(10) THEREOF AND WITHIN THE TIME PRESCRIBED U/S 144C(13) OF THE ACT. WE FIND THAT INSTEAD OF PASSING THE FINAL ORDER OF ASSESSMENT AS REQUIRED BY LAW, THE AO PASSED THE IMPUGNED FINAL ORDER OF ASSESSMENT DATED 17/1/2014 U/S 143(3) R.W.S 92CA OF THE ACT; WHICH, AS CONTENDED BY TH E ID AR, IS IDENTICAL TO THE DRAFT ORDER OF ASSESSMENT PASSED ON 14/3/2013 BY ONLY INCORPORATING THIS TPO'S PROPOSALS AND , THEREBY EVIDENTLY GIVING THE DRP'S MANDATORY DIRECTIONS ISSUED U/S 144C(5) OF THE ACT A COMPLETE GO - BY. IN OUR VIEW, IT IS FACTUALLY ESTABLISHED THAT THE AO IN THE FINAL ORDER OF ASSESSMENT DATED 17/1/2014 HAS NOT GIVEN EFFECT TO OR CARRIED OUT THE BINDING DIRECTIONS OF THE DRP AS REQUIRED U/S 144C(10) WITHIN THE TIME SPECIFIED U/S 144C(13) OF THE ACT; WHICH IS A CLEAR VIOLATION OF THE BINDING PROVISIONS OF SEC. 144C(10) AND (13) OF THE ACT. THEREFORE, IN OUR CONSIDERED OPINION, THE CONDUCT OF THE AO/TPO IN PASSING THE IMPUGNED FINAL ORDER OF ASSESSMENT DATED 17/1/2014 IS A CLEAR CASE OF DEFIANCE AND DISREGARD TO THE BINDING DIRECTIONS 8 IT (TP) A NO. 2664/BANG/2017 OF THE HIGHER AUTHORITIES, I.E, THE DRP IN THE CASE ON HAND. IN FACT, IN THE IMPUGNED ORDER DATED 17/1/2014 THERE IS NOT EVEN A SINGLE REFERENCE TO THE DRP'S DIRECTIONS ISSUED US/ 144C(5) OF THE ACT VIDE ORDER DATED 30/12/2013. 3.3.2 IN THE FACTUAL AND LE GAL MATRIX OF THE CASE ON HAND, AS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED FINAL ORDER OF ASSESSMENT FOR ASST. YEAR 2008 - 09 PASSED U/S 143(3) R.W.S 92CA OF THE ACT BY THE AO, IN VIOLATION OF THE EXPRESS MANDATORY PROVISIONS OF SEC. 144C(10) AND (13) OF THE ACT BY NOT PASSING THE IMPUGNED ORDER IN PURSUANCE OF AND IN CONFORMITY WITH THE BINDING DIRECTIONS OF THE DRP ISSUED U/S 144C(5) OF THE ACT, WITHIN THE TIME SPECIFIED FOR THIS PURPOSE, HAS RENDERED THE SAID IMPUGNED FINAL ORDER O F ASSESSMENT UNSUSTAINABLE IN LAW. WE, THEREFORE, QUASH THE IMPUGNED FINAL ORDER OF ASSESSMENT FOR ASST. YEAR 2009 - 10 PASSED BY THE AO U/S 143(3) R.W.S 92CA OF THE ACT DATED 17/1/2014 IN THE CASE ON HAND. W HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY, GROUND NO. 17 OF ASSESSEE'S APPEAL IS ALLOWED. 10. RESPECTFULLY FOLLOWING THE AFORESAID VIEW OF THE TRIBUNAL, WE QUASH THE IMPUGNED ORDER OF ASSESSMENT. SINCE THE IMPUGNED ORDER OF ASSESSMENT IS QUASHED ON THE GROUND THAT THE SAME IS NOT IN CONFORMITY WITH THE PROVISIONS OF SECTION 144C OF THE ACT AND FURTHER ON THE GROUND THAT THE TIME FOR PASSING THE FINAL ORDER OF ASSESSMENT IS BARRED BY TIME, WE ARE OF THE VIEW THAT THE OTHER ISSUES RAISED BY THE ASSESSEE IN ITS GROUNDS OF APPEAL AND THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL DOES NOT REQUIRE ANY CONSIDERATION. AS FAR AS THE DECISION CITED BY THE LEARNED DR IN THE CASE OF H & M HENNES & MAURITZ INDIA (P) LTD. (SUPRA) IS CONCERNED, WE FIND THAT IN THE SAID DECISION, THE COUNSEL FOR THE ASSESSEE HAS IN P ARA 3.8 OF THE SAID ORDER PRAYED FOR SETTING ASIDE THE FINAL ORDER OF ASSESSMENT OF AO TO PASS ORDERS IN ACCORDANCE WITH THE DIRECTIONS OF THE DRP. THUS, IT IS A CASE OF CONCESSION BY THE ASSESSEE AND NOT ON THE BASIS OF ARGUMENTS ADVANCED BY THE PARTIES. THE LAW IS WELL SETTLED THAT A DECISION ON CONCESSION OF THE COUNSEL CANNOT BE REGARDED AS A PRECEDENT. THEREFORE, THE DECISION CITED BY THE LEARNED DR DOES NOT SUPPORT THE CASE OF THE REVENUE. 11. IN VIEW OF THE CONCLUSION THAT THE ASSESSMENT ORDER IS NU LL AND VOID, THE OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE ON MERITS OF THE ADDITION MADE DO NOT REQUIRE ANY ADJUDICATION. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. IN THE PRESENT CASE ALSO, AS POINTED OUT BY THE AR, THE DRP INCLU DED EVOKE TECHNOLOGIES LIMITED IN THE LIST OF COMPARABLES AND SIMILARLY THE DRP EXCLUDED ICRA TECHNO ANALYTICS LIMITED FROM THE LIST OF COMPARABLES. THE ALP ADJUSTMENT MADE BY THE TPO HAS BEEN CHANGED ON ACCOUNT OF THESE TWO DIRECTIONS OF DRP, HOWEVER, TH E ASSESSING OFFICER RETAINED THE ORIGINAL TRANSFER PRICING ADJUSTMENT AT RS.8,67,23,600 IN THE FINAL ASSESSMENT ORDER AS MADE IN THE DRAFT 9 IT (TP) A NO. 2664/BANG/2017 ASSESSMENT ORDER. BEING SO, WE ARE NOT IN A POSITION TO UPHOLD THE ORDER OF THE ASSESSING OFFICER ON THIS COUNT. AS PROVIDED IN THE SECTION 144C(13) OF THE ACT, THE FINAL ORDER OF THE ASSESSING OFFICER SHOULD BE IN CONFORMITY WITH THE DIRECTIONS GIVEN BY THE DRP. IN THE PRESENT CASE, WHILE WORKING OUT THE ALP ADJUSTMENT, HE HAS NOT FOLLOW E D THE DIRECTION OF THE DRP, CO NSEQUENTLY, THE ASSESSMENT ORDER IS BAD IN LAW AS HELD BY CO - ORDINATE BENCH IN THE CASE CITED ABOVE. ACCORDINGLY, THE ASSESSMENT FRAMED IN THIS CASE IS QUASHED AND SET ASIDE. HOWEVER WE MAKE IT CLEAR THAT, THIS ORDER WOULD NOT, IN ANY WAY, STOP THE REVENUE FROM TAKING SUCH STEPS AS ARE AVAILABLE TO IT IN LAW AND THE ASSESSEE ALSO FROM CONTESTING THE ACTION OF THE REVENUE IN ACCORDANCE WITH THE LAW, IF IT SO DESIRES. 6. SINCE WE HAVE DECIDED THE PRIMARY GROUND ON APPLICABILITY OF SECTION 144C( 13) OF THE ACT, AT THIS STAGE WE ARE REFRAINED FROM ADJUDICATING OTHER GROUNDS ON ISSUES RAISED BY THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/ - SD/ - ( N.V. VASUDEVAN ) ( CHANDRA POOJARI ) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 21 .12. 20 20 . *REDDY GP 10 IT (TP) A NO. 2664/BANG/2017 COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPE LLATE TRIBUNAL BANGALORE