IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 271 /P U N/201 3 / ASSESSMENT YEAR : 20 0 8 - 09 M/S. RENISHAW METROLOGY SYSTEMS PVT. LTD., S.NO.283, HISSA NO.2, S.NO.284, HISSA NO.2 & 3A, RAISONI ESTATE, VILLAGE MANN, TALUKA MULSHI, PUNE 4110 57 . / APPELLANT PAN: AA BCR6361F VS. THE DY . COMMISSIONER OF INCOME TAX, CIRCLE 1(2), PUNE . / RESPONDENT ASSESSEE BY : S /S HRI KAMAL SAWLNEY & NILESH JOSHI REVENUE BY : SHRI RAJEEV KUMAR , CIT / DATE OF HEARING : 03 . 1 0 .201 8 / DATE OF PRONOUNCEMENT: 16 . 1 1 .201 8 / ORDER PER SUSHMA CHOWLA, J M : THE APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF D CIT , CIRCLE - 1(2) , PUNE , DATED 27 . 11 .201 2 RELATING TO ASSESSMENT YEAR 20 0 8 - 09 PASSED UNDER SECTION 143(3) R.W .S. 144C(13) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO AND THE DY. DIRECTOR OF INCOME TAX (TP - IV), PUNE [HEREIN AFTER REFERRED TO AS LD. TRANSFER PRICING OFFICER ('LD, TPO')] HAVE ERRED IN PROPOSING AND THE HON'BLE ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 2 DISPUTE RESOLUTION PANEL ('DRP') HAS FURTHER ERRED IN DETERMINING THE TOTAL INCOME (BEFORE SET - OFF OF LOSSES) OF INR 5,512,066. I. IN RESPECT OF TRANSFE R PRICING ADJUSTMENT OF RS.2,780,728 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. AO AND THE LD. TPO HAVE ERRED IN PROPOSING AND DRP HAS FURTHER ERRED IN: 1. MAKING A TRANSFER PRICING ('TP') ADJUSTMENT OF RS.2,780,728 IN RELATION TO PROVISION OF SOFTWARE DEVELOPMENT SERVICES TO ITS ASSOCIATED ENTERPRISES ('AE'); 2. DISREGARDING THE BENCHMARKING ANALYSIS AND COMPARABLE COMPANIES SELECTED BY THE APPELLANT BASED ON THE CONTEMPORANEOUS DATA IN THE TRANSFER PRICING STUDY REPORT MAINTA INED AS PER SECTION 92D OF THE ACT READ WITH RULE 10D OF THE INCOME - TAX RULES, 1962 ('THE RULES') AND THE VARIOUS SUBMISSIONS MADE BY THE APPELLANT; 3. INTRODUCING ADDITIONAL NEW COMPANIES WITHOUT PROVIDING ANY COGENT REASON, TO BENCHMARK THE INTERNATIONA L TRANSACTIONS OF THE APPELLANT; 4. NOT SHARING THE SEARCH STRATEGY ADOPTED FOR SELECTION OF ALLEGED COMPARABLE COMPANIES DURING THE COURSE OF ASSESSMENT PROCEEDINGS IN VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE; 5. REJECTING COMPARABLE COMPANIES BY ERRONEOUSLY APPLYING A COMPARABILITY CRITERIA BASED ON STRICT COMPARISON OF PRODUCTS / SERVICES AND IN DOING SO IGNORING THE BASIC TENETS OF APPLICABILITY OF TRANSACTIONAL NET MARGIN METHOD AS THE MOST APPROPRIATE METHOD WHICH IS NOT BASED ON THE CONCEPT O F STRICT COMPARABILITY OF PRODUCTS AND SERVICES AND RELIES ON ONLY BROAD COMPARABILITY OF FUNCTIONS ASSETS AND RISKS; 6. APPLYING ARBITRARY FILTERS INCONSISTENTLY TO ARRIVE AT A FRESH SET OF COMPANIES AS COMPARABLES TO THE APPELLANT: 7. ACCEPTING COMPANI ES AS COMPARABLES TO THE APPELLANT WITHOUT CONSIDERING THE TURNOVER AND SIZE OF THE APPELLANT AND COMPARABLES AND ALSO DISREGARDING THE TURNOVER FILTER APPLIED BY THE APPELLANT 8. APPLYING THE FILTER OF REJECTING COMPANIES WITH EXPORT TURNOVER LESS THAN 7 5 % OF SALES IN THE SEARCH PROCESS WITHOUT PROVIDING COGENT REASONS FOR USING THE SAME AND EVEN THOUGH THE DATA IN RESPECT OF EXPORT TURNOVER WAS NOT AVAILABLE OF ALL COMPARABLE COMPANIES; 9. INCLUDING THE REIMBURSEMENT OF EXPENSES TO CALCULATE THE THRESHO LD OF 25 % OF RELATED PARTY TRANSACTIONS ('RPT ) AND THEREBY REJECTING THE COMPANIES HAVING RPT OF LESS THAN 25 % ; 10. APPLYING THE BENCHMARKING CRITERIA INCONSISTENTLY, AS THE COMPANIES SELECTED BY THE LD. TPO ARE LIABLE TO BE REJECTED USING THE VERY SAME CRITERIA USED BY THE LD. TPO FOR REJECTING OTHER COMPARABLES SELECTED IN THE TRANSFER PRICING STUDY FURNISHED BY THE APPELLANT; 11. REJECTING COMPARABLE COMPANIES SELECTED IN THE TRANSFER PRICING STUDY FURNISHED BY THE APPELLANT MERELY BECAUSE THE COMPANY HAD INCURRED LOSSES; ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 3 12. CHERRY PICKING THE HIGH MARGIN COMPANIES AND REJECTING THE LOW MARGIN COMPANIES AND INCONSISTENTLY APPLYING THE BENCHMARKING CRITERIA; 13. REJECTING THE LOW MARGIN COMPARABLES ON THE REASONING OF FUNCTIONAL INCOMPARABILITY AND D IFFERENT BUSINESS MODEL AND SELECTING HIGH MARGIN COMPARABLES WITHOUT PROVIDING ANY REASONS WHICH ARE FUNCTIONALLY NOT COMPARABLE TO THE APPELLANT; 14. ERRONEOUSLY COMPUTING THE OPERATING MARGINS OF CHOSEN COMPARABLE COMPANIES; 15. NOT ALLOWING ADJUSTMEN TS IN ACCORDANCE WITH THE PROVISIONS OF RULE 10B OF THE RULES TO ACCOUNT FOR DIFFERENCE BETWEEN INTERNATIONAL TRANSACTIONS AND THE ALLEGED COMPARABLE UNCONTROLLED TRANSACTIONS SELECTED BY THE LD. TPO; 16. REJECTING THE USE OF MULTIPLE YEAR DATA FOR DETERM INING THE ARM'S LENGTH PRICE ('ALP') OF THE INTERNATIONAL TRANSACTIONS OF THE APPELLANT PERTAINING TO PROVISION OF SOFTWARE DEVELOPMENT SERVICES TO ITS AE; 17. DENYING THE APPELLANT THE BENEFIT OF VARIATION OF 5 % FROM THE ARITHMETICAL MEAN OF THE COMPARAB LE ENTITIES MARGINS WHILE DETERMINING THE ALP OF THE INTERNATIONAL TRANSACTIONS OF THE APPELLANT PERTAINING TO PROVISION OF SOFTWARE SERVICES TO ITS AE; 18. NOT APPRECIATING THAT THE APPELLANT HAS NO MOTIVE TO SHIFT PROFITS OUTSIDE INDIA BY MANIPULATING T HE PRICES CHARGED IN ITS INTERNATIONAL TRANSACTIONS WHICH IS A PRE - REQUISITE CONDITION TO MAKE ANY ADJUSTMENT UNDER THE PROVISION OF CHAPTER X OF THE ACT., AS THE APPELLANT HAS BEEN AVAILING THE BENEFIT OF DEDUCTION UNDER SECTION 1 0 A OF THE ACT DURING THE YEAR IN QUESTION II. IN RESPECT OF OTHER DISALLOWANCES/ ADDITIONS OTHER THAN TRANSFER PRICING ADJUSTMENT 19. DISALLOWANCE OF FOREIG N TRAVEL EXPENSES THE LD. AO ERRED IN NOT APPRECIATING THE FACT THAT FOREIGN TRAVEL EXPENSES OF INR 1,335,310 HAVE BEEN IN CURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE APPELLANT'S BUSINESS; ACCORDINGLY, HAS ERRED IN NOT ALLOWING THE SAME UNDER SECTION 37(1) OF THE ACT. 20. SET - OFF OF LOSSES OF OTHER UNITS PRIOR TO DEDUCTION UNDER SECTION 10B OF THE ACT THE LD. AO ERR ED IN SETTING - OFF THE LOSSES OF OTHER UNITS WITH THE PROFITS OF THE MANUFACTURING UNIT PRIOR TO COMPUTING DEDUCTION U NDER SECTION 10B OF THE ACT. 21. SET - OFF OF LOSSES PRIOR TO DEDUCTION UNDER SECTION 10B OF THE ACT THE LD. AO ERRED IN NOT APPRECIATING T HAT DEDUCTION UNDER SECTION 10B OF THE ACT SHOULD BE COMPUTED BEFORE SETTING - OFF BROUGHT FORWARD LOSSES. 22. OTHERS ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 4 A ) CONSEQUENT TO THE ABOVE, THE LD. AO HAS ERRED IN COMPUTING THE AMOUNT OF CARRY FORWARD OF LOSSES FOR FUTURE SET - OFF B ) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. AO ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 271( 1 )(C) OF THE ACT ON THE PREMISE THAT THE APPELLANT HAS CONCEALED / FURNISHED INACCURATE PARTICULARS OF INCOME, WITHOUT APPRECIATING THE FACT THAT ADJUSTMENT MADE IS NOT IN ACCORDANCE WITH THE LAW. C ) THE ORDER PASSED BY THE LD. DRP IS INCOMPLETE WITH RESPECT TO THE GROUNDS OF OBJECTION RAISED BY THE APPELLANT BEFORE IT AND THE ADDITIONAL EVIDENCE SUBMITTED BEFORE IT. THE SAID ORDER DOES NOT CLARIFY IN SUFFICIEN T DETAIL, THE REASONS FOR REJECTION OF THE APPELLANT'S DETAILED SUBMISSIONS, EVIDENCES AND FACTUAL AND TECHNICAL ANALYSIS IN LIGHT OF RELEVANT LEGAL PRONOUNCEMENTS AND JUDICIAL PRECEDENTS, 3. FIRST, WE TAKE UP TRANSFER PRICING ISSUE RAISED IN THE PRESENT APPEAL. THE ISSUE RAISED IN GROUND OF APPEAL NO.I IS IN RESPECT OF TRANSFER PRICING ADJUSTMENT OF 27,80,728/ - . 4. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THOUGH VARIOUS CONNECTED TP ISSUES HAVE BEEN RAISED VIDE GROUND OF APPEAL NO.I, BUT THE ASSESSEE IS AGGRIEVED BY FINAL SELECTION OF COMPARABLES IN THE HANDS OF ASS ESSEE. THE GRIEVANCE OF ASSESSEE IS THAT OUT OF EIGHT COMPARABLES SELECTED BY THE TRANSFER PRICING OFFICER (TPO), FIVE COMPARABLES NEED TO BE EXCLUDED BEING NOT FUNCTIONALLY COMPARABLE AND ONE COMPARABLE WHICH WAS EXCLUDED FOR BEING LOSS MAKING CONCERN IS NOT PERSISTENT LOSS MAKING CONCERN, HENCE THE SAME IS TO BE INCLUDED. HE FURTHER POINTED OUT THAT INCLUSION / EXCLUSION OF COMPARABLES IS SQUARELY COVERED BY DIFFERENT ORDERS OF THE TRIBUNAL AND IN CASE THE PLEA OF ASSESSEE IS ACCEPTED, THEN NO OTHER ISS UES NEEDS TO BE LOOKED INTO AS THE MARGINS SHOWN BY THE ASSESSEE WOULD BE WITHIN +/ - 5% RANGE OF MEAN MARGINS OF COMPARABLES. 5. THE ASSESSEE HAS ALSO RAISED CORPORATE ISSUES VIDE GROUNDS OF APPEAL NO.19 TO 21 . THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROU ND OF APPEAL WHICH HAS NOT BEEN PRESSED, HENCE THE SAME IS DISMISSED AS NOT PRESSED. ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 5 6. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD FURNISHED RETURN OF INCOME DECLARING LOSS OF ( - ) 2.45 CRORES. THE CASE OF ASSESSEE WAS PICKED UP FOR SCRUTINY. THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF AUTOMATED METROLOGY AND HAD MANUFACTURING DIVISION, SOFTWARE DIVISION, SOURCING DIVISION AND SALES & MARKETING DIVISION. THE ASSESSEE HAS ENTERED INTO VARIOUS INTERNATIONAL TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISES. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD ENTERED INTO INTERNATIONAL TRANSACTIONS OF PROVISION OF SOFTWARE DEVELOPMENT SERVICES TO THE TUNE OF 1,82,94,050/ - WITH ITS ASSOC IATED ENTERPRISES. THE ASSESSING OFFICER MADE REFERENCE UNDER SECTION 92CA(1) OF THE ACT TO THE TPO TO BENCHMARK ARM'S LENGTH PRICE IN THE HANDS OF ASSESSEE. THE TPO FIRST LOOKED INTO INTERNATIONAL TRANSACTIONS OF RENDERING OF SOFTWARE DEVELOPMENT SERVIC ES. THE ASSESSEE HAD ADOPTED TNNM METHOD AS THE MOST APPROPRIATE METHOD AND HAD TAKEN THE PROFIT LEVEL INDICATOR (PLI) IN TNNM ANALYSIS AT NET PROFIT / TOTAL COST. THE ASSESSEE WAS REMUNERATED AT COST PLUS MARKUP OF 12% FOR RENDERING SOFTWARE DEVELOPMENT SERVICES. THE PLI OF ASSESSEE WAS 13.49%. THE ASSESSEE HAS SELECTED CERTAIN CONCERNS AS FUNCTIONALLY COMPARABLE WHOSE MEAN MARGIN WAS 11.13% AND AS PER THE TP DOCUMENTATION, THE INTERNATIONAL TRANSACTION WAS TREATED TO BE AT ARM'S LENGTH PRICE. THE TPO HOWEVER, NOTED THAT PLI OF COMPARABLES WAS ARRIVED AT BY CONSIDERING WEIGHTED AVERAGE MARGINS OF THREE YEARS DATA. THE ASSESSEE WAS ASKED TO FURNISH DATA FOR THE CONTEMPORANEOUS PERIOD I.E. YEAR ENDING 31.03.2008. THE ASSESSEE FURNISHED THE DATA WITH RI DER THAT IN CASE THE DATA OF THE YEAR ENDING 31.03.2008 WAS TO BE CONSIDERED, THEN CERTAIN COMPANIES HAD CEASED TO BE COMPARABLES. THE ASSESSEE FURNISHED LIST OF 15 COMPARABLES, WHICH WERE SELECTED TO BE ENGAGED IN SOFTWARE DEVELOPMENT SERVICES. THE TPO HOWEVER, AFTER ANALYZING AVAILABLE DATA, PREPARED A LIST OF 11 COMPANIES AS COMPARABLE, WHICH WERE OBJECTED TO ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 6 BY THE ASSESSEE ON VARIOUS ASPECTS. HOWEVER, THE TPO REJECTING THE PLEA OF ASSESSEE AND ACCEPTING NEW COMPARABLES PROPOSED BY HIM FINALLY DREW U P FINAL SET OF COMPARABLES TOTALING EIGHT. THE MEAN MARGINS OF SAID COMPARABLES WORKED OUT TO 30.74% AFTER WORKING CAPITAL ADJUSTMENT. THE TPO THUS, PROPOSED AN UPWARD ADJUSTMENT OF 27,80,728/ - . THE ASSESSING OFFICER ISSUED DRAFT ASSESSMENT ORDER, AGA INST WHICH THE ASSESSEE FILED OBJECTIONS BEFORE THE DISPUTE RESOLUTION PANEL (DRP), WHICH ACCEPTED BENCHMARKING DONE BY THE TPO. CONSEQUENT THERETO, THE ASSESSING OFFICER PASSED FINAL ASSESSMENT ORDER MAKING AN UPWARD ADJUSTMENT OF 27,80,728/ - ON ACCOUN T OF ARM'S LENGTH PRICE OF INTERNATIONAL TRANSACTIONS. 7. THE ASSESSEE IS IN APPEAL AGAINST THE ORDERS OF ASSESSING OFFICER/TPO/DRP . 8. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS POINTED OUT THAT CONCERNS WHICH HAVE BEEN FINALLY SELECTED NUMBERING EIGHT CANNOT BE ACCEPTED AS COMPARABLES TO THE ASSESSEE AND HAS ARGUED FOR EXCLUSION OF FIVE CONCERNS I.E. BODHTREE CONSULTING LTD., KALS INFORMATION SYSTEMS LTD., FCS SOFTWARE SOLUTION LTD., E - INFOCHIP LTD. AND E - ZEST SOLUTIONS LTD. THE ASSESSE E HAS ALSO PUT UP CASE FOR INCLUSION OF SIP TECHNOLOGIES & EXPORTS LTD. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE FIRST ISSUE RAISED IS AGAINST TRANSFER PRICING ADJUSTMENT MADE BY AUTHORITIES BELOW IN THE SEGMENT OF PROVISION OF SOFTWARE DEVELOPMENT SERVICES BY THE ASSESSEE TO ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 7 ITS ASSOCIATED ENTERPRISES. THE TOTAL VALUE OF INTERNATIONAL TRANSACTIONS FOR THE YEAR UNDER CONSIDERATION WAS 1,82,94,050/ - . THE ASSESSEE HAD APPLIED TNNM METHOD AS MOST APPROPRIATE METHOD AND HAD TAKEN NET PROFIT / TOTAL COST AS ITS PLI. THE MARGINS OF ASSESSEE WORKED OUT TO 13.49%. THE ASSESSEE HAD INITIALLY PICKED UP WE IGHTED AVERAGE OF THREE YEARS MARGIN OF COMPARABLES WHICH WERE NOT ACCEPTED BY THE TPO AND THE ASSESSEE WAS DIRECTED TO FILE DATA FOR THE CONTEMPORANEOUS PERIOD. AFTER MUCH DELIBERATIONS, THE TPO FINALLY SELECTED FOLLOWING EIGHT CONCERNS AS FUNCTIONALLY C OMPARABLE TO THE ASSESSEE: - SR. NO. NAME OF THE COMPANY UNADJUSTED MARGINS AS PER TPO (OP/TC) (%) WORKING CAPITAL ADJUSTED MARGIN 1 BODHTREE CONSULTING LTD. 19.14 21.96 2 E INFOCHIPS LTD. 30.32 31.53 3 EZEST SOLUTIONS LTD. 28.58 30.84 4 GOLDSTONE TECHN OLOGIES 27.06 22.53 5 HELIOS AND MATHESON INFORMATION TECHNOLOGY 36.05 35.15 6 KALS INFORMATION SYSTEM 30.92 33.27 7 LGS GLOBAL LTD. 26.33 26.87 8 FCS SOFTWARE SOLUTIONS LTD. 57.02 54.76 31.93 30.74 11. THE MEAN MARGINS OF SAID COMPARABLES WORKED OUT TO 30.74% AFTER WORKING CAPITAL ADJUSTMENT AND THE ASSESSING OFFICER FINALLY MADE AN UPWARD ADJUSTMENT OF 27,80,728/ - . THE ASSESSEE IS AGGRIEVED BY THE ORDERS OF AUTHORITIES BELOW. THE FIRST PLEA RAISED BY ASSESSEE IS AGAINST EXCLUSION O F CONCERN KALS INFORMATION SYSTEMS LTD. ON THE GROUND THAT THE SAID COMPANY WAS ENGAGED IN SOFTWARE DEVELOPMENT AND SOFTW ARE PRODUCTS AND THE SAME WAS NOT FUNCTIONALLY COMPARABLE. IN THIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS PLACED RELIANCE ON THE RATIO LAID DOWN BY PUNE BENCH OF TRIBUNAL IN SYMPHONY SERVICES PUNE PVT. LTD. VS. ITO IN ITA NO.25 7/PN/2013, RELATING TO ASSESSMENT YEAR 2008 - 09 ITSELF. THE TRIBUNAL VIDE ORDER DATED 30.04.2014 HAD HELD THAT THE CONCERN KALS INFORMATION SYSTEMS LTD. WAS ENGAGED IN THE BUSINESS OF DEVELOPING AND SELLING SOFTWARE PRODUCTS ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 8 AND WAS NOT PURELY OR MAINLY A SOFTWARE PROVIDER. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDER: - 17. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE PRECEDENTS BY WAY OF THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF BINDVIEW INDIA PVT. LTD. ( SUPRA) AND THE DECISION OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF M/S 3DPLM SOFTWARE SOLUTIONS LTD. (SUPRA) RELIED UPON BY THE ASSESSEE SQUARELY COVER THE CONTROVERSY RELATING TO KALS INFORMATION SYSTEMS LIMITED. IN THE AFORESAID TWO PRECEDENTS , THE SAID CONCERN HAS BEEN SOUGHT TO BE EXCLUDED FROM THE LIST OF COMPARABLES ON ACCOUNT OF FUNCTIONAL DISSIMILARITIES. THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF M/S 3DPLM SOFTWARE SOLUTIONS LTD. (SUPRA) HAS CONSIDERED THE FUNCTIONS UNDERTAKEN BY THE SAID CONCERN DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION BEFORE US, AND IT HAS BEEN FOUND THAT THE SAID CONCERN WAS ENGAGED IN THE BUSINESS OF DEVELOPING AND SELLING SOFTWARE PRODUCTS AND WAS NOT PURELY OR MAINLY A SOF TWARE SERVICE PROVIDER. THERE IS NO DISPUTE TO THE FACT POSITION THAT THE APPELLANT BEFORE US HAS UNDERTAKEN MAINLY SOFTWARE DEVELOPMENT SERVICES FOR ITS ASSOCIATED ENTERPRISES AND THE NON - ASSOCIATED ENTERPRISES AND THAT SUCH ACTIVITY IS QUITE DISTINCT FRO M THE DEVELOPING AND SELLING OF SOFTWARE PRODUCTS. THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF BINDVIEW INDIA PVT. LTD. (SUPRA) HAS ALSO FOUND THE SAID CONCERN TO BE FUNCTIONALLY DISSIMILAR FROM A CONCERN WHICH WAS ENGAGED IN THE BUSINESS OF SOFTWARE DEV ELOPMENT SERVICES, WHICH IS THE CASE BEFORE US. THOUGH, THE DECISION OF THE TRIBUNAL IN THE CASE OF BINDVIEW INDIA PVT. LTD. (SUPRA) RELATES TO THE ASSESSMENT YEAR 2006 - 07 WHEREAS THE PRESENT CASE OF THE ASSESSEE IS FOR ASSESSMENT YEAR 2008 - 09 YET THERE IS NO MATERIAL ON RECORD TO SUGGEST THAT THE ACTIVITIES CARRIED OUT BY KALS INFORMATION SYSTEMS LIMITED IN THE CURRENT ASSESSMENT YEAR ARE DIFFERENT FROM THOSE NOTED BY THE TRIBUNAL IN THE CASE OF BINDVIEW INDIA PVT. LTD. (SUPRA) FOR ASSESSMENT YEAR 2006 - 07. 18. CONSIDERING THE AFORESAID DISCUSSION, IN OUR VIEW, THE CONCERN I.E. KALS INFORMATION SYSTEMS LIMITED IS LIABLE TO BE EXCLUDED FROM THE LIST OF COMPARABLES FOR THE PURPOSES OF BENCHMARKING INTERNATIONAL TRANSACTIONS OF PROVISION OF SOFTWARE DEVELOPMEN T SERVICES. WE HOLD SO. THUS, ON THIS ASPECT ASSESSEE SUCCEEDS. 12. THE SAID PRINCIPLE HAS BEEN APPLIED BY PUNE BENCH OF TRIBUNAL IN APPROVA SYSTEMS PVT. LTD. VS. DCIT IN ITA NO.1921/PUN/2014, RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 25.01.2017. 13. WE FIND THAT THE ISSUE RAISED IS SQUARELY COVERED BY EARLIER DECISIONS OF PUNE BENCH OF TRIBUNAL IN SYMPHONY SERVICES PUNE PVT. LTD. VS. ITO (SUPRA), WHICH RELATES TO ASSESSMENT YEAR 2008 - 09 ITSELF AND IT HAS BEEN HELD THAT THE CONCERN KALS INFORMAT ION SYSTEMS LTD. IS TO BE EXCLUDED FROM THE LIST OF COMPARABLES AS IT WAS NOT FUNCTIONALLY COMPARABLE TO THE CONCERN WHICH WAS ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 9 PROVIDING SOFTWARE DEVELOPMENT SERVICES TO ITS ASSOCIATED ENTERPRISES. FOLLOWING THE SAME PARITY OF REASONING, WE HOLD THAT KALS INFORMATION SYSTEMS LTD. IS TO BE EXCLUDED FROM THE FINAL SET OF COMPARABLES. 1 4 . NOW, COMING TO THE NEXT CONCERN BODHTREE CONSULTING LTD. THE PLEA OF LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE BEFORE US IS THAT THE SAID CONCERN IS ALSO NOT FUNC TIONALLY COMPARABLE TO THE ASSESSEE AS IT WAS INVOLVED IN PROVIDING OPEN AND END - TO - END WEB SOLUTIONS, SOFTWARE CONSULTANCY, DESIGN AND DEVELOPMENT OF SOLUTIONS. IN THIS REGARD, THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAS PLACED RELIANCE ON SERIES OF DECISIONS OF DIFFERENT BENCHES OF TRIBUNAL. THE PUNE BENCH OF TRIBUNAL IN BARCLAYS TECHNOLOGY CENTRE INDIA PVT. LTD. VS. ACIT IN ITA NO.2279/PN/2012, RELATING TO ASSESSMENT YEAR 2008 - 09, ORDER DATED 28.01.2015 HAD HELD THAT BODHTREE CONSULTING LTD. WAS TO BE EXCLUDED FROM FINAL LIST OF COMPARABLES AS IT WAS FOLLOWING DIFFERENT BUSINESS MODULES. FURTHER, THE SAID CONCERN WAS SHOWING FLUCTUATING MARGINS OVER THE YEARS. ACCORDINGLY, WE HOLD THAT THE CONCERN BODHTREE CONSULTING LTD. IS TO BE EXCLU DED FROM THE FINAL SET OF COMPARABLES IN THE CASE OF ASSESSEE ALSO. 1 5 . THE NEXT CONCERN IS FCS SOFTWARE SOLUTIONS LTD., WHICH IS CLAIMED TO BE FUNCTIONALLY NOT COMPARABLE AS IT WA S SHOWING ABNORMAL PROFITS FROM YEAR TO YEAR. FURTHER, THE SAID CONCERN WA S ENGAGED IN VARIOUS ACTIVITIES LIKE SOFTWARE CONSULTANCY, TECHNICAL SUPPORT SERVICES, E - LEARNING, ETC. THE SAID CONCERN HAD SHOWN HIGH PROFIT FLUCTUATION IN MARGINS FROM 14.75% IN FINANCIAL YEAR 2005 - 06 TO 19.94% IN FINANCIAL YEAR 2006 - 07, 57.02% IN FINA NCIAL YEAR 2007 - 08 AND 37.07% IN FINANCIAL YEAR 2008 - 09. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN THIS REGARD HAS PLACED RELIANCE ON THE DECISION OF PUNE BENCH ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 10 OF TRIBUNAL IN BARCLAYS TECHNOLOGY CENTRE INDIA PVT. LTD. VS. ACIT (SUPRA), WH EREIN IT HAS BEEN NOTED THAT OPERATING MARGINS OF SAID CONCERN DID NOT REFLECT CONSISTENT TREND OVER THE YEARS AND IN ANY CASE THE CURRENT YEARS OPERATIONS I.E. FOR ASSESSMENT YEAR 2008 - 09 IN COMPARISON TO EARLIER YEARS WERE QUITE ABNORMAL. FOLLOWING THE SAME PARITY OF REASONING, WE HOLD THAT FCS SOFTWARE SOLUTIONS LTD. IS TO BE EXCLUDED FROM THE FINAL LIST OF COMPARABLES WHILE BENCHMARKING INTERNATIONAL TRANSACTIONS UNDERTAKEN BY ASSESSEE. 1 6 . THE NEXT CONCERN UNDER DISPUTE IS E - ZEST SOLUTIONS LTD., WHI CH IS ENGAGED IN E - BUSINESS CONSULTANCY SERVICES INCLUDING PORTAL DEVELOPMENT SERVICES. THE TRIBUNAL IN SYMPHONY SERVICES PUNE PVT. LTD. VS. ITO (SUPRA) WHILE DECIDING THE ISSUE FOR ASSESSMENT YEAR 2008 - 09 HAD HELD THAT SINCE THE SAID CONCERN WAS ENGAGED IN E - BUSINESS CONSULTANCY SERVICES CONSISTING OF WEB STRATEGY SERVICES, ITES SERVICES AND TECHNOLOGY CONSULTANCY SERVICES INCLUDING PORTAL DEVELOPMENT SERVICES, WHICH WERE THE KIND OF SERVICES UNDERSTOOD TO BE KPO SERVICES AND HENCE, WAS EXCLUDED WHILE BEN CHMARKING A CONCERN PROVIDING SOFTWARE DEVELOPMENT SERVICES. THE SAID PRINCIPLE HAS BEEN APPLIED BY PUNE BENCH OF TRIBUNAL IN BARCLAYS TECHNOLOGY CENTRE INDIA PVT. LTD. VS. ACIT (SUPRA) AND FOLLOWING THE SAME PARITY OF REASONING, WE HOLD THAT THE CONCERN WHICH IS ENGAGED IN PROVIDING KPO SERVICES IS NOT TO BE INCLUDED AS FUNCTIONALLY COMPARABLE TO A CONCERN PROVIDING SOFTWARE DEVELOPMENT SERVICES. ACCORDINGLY, WE DIRECT THAT THE SAME TO BE EXCLUDED FROM FINAL SET OF COMPARABLES. 1 7 . THE LAST CONCERN WH ICH THE ASSESSEE WANTS TO BE EXCLUDED IS E - INFOCHIPS LTD., WHICH IS ENGAGED IN SOFTWARE DEVELOPMENT AND ALSO IN ITES SEGMENT. HOWEVER, THE SEGMENTAL DATA FOR THE SAID SOFTWARE DEVELOPMENT ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 11 SERVICES IS NOT AVAILABLE. EVEN IN THE SEGMENTAL INFORMATION OF AN NUAL REPORT, WHEREIN INFORMATION ABOUT PRIMARY SEGMENT IS PROVIDED AND IT IS MENTIONED THAT THE COMPANY IS PRIMARILY ENGAGED IN SOFTWARE DEVELOPMENT AND ITES SERVICES, WHICH IS ONLY REPORTABLE BUSINESS SEGMENT AS PER ACCOUNTING STANDARD (AS) - 17 ISSUED BY I CAI. FURTHER, THE SAID CONCERN HAS ALSO SHOWN INVENTORY AGGREGATING TO 17,90,766/ - . THE ASSESSEE HAS FURNISHED COPY OF ANNUAL REPORT IN THE PAPER BOOK AND IN THE NOTES FORMING PART OF ACCOUNT, PART OF ANNUAL REPORT, THE REVENUE IS RECOGNIZED FROM SOFTWARE DEVELOPMENT AND W AS ALSO RECOGNIZED FROM SALES UPON SHIPMENT OF THE PRODUCT. IN VIEW THEREOF, WE FIND THAT THE SAID CONCERN IN THE ABSENCE OF SEGMENTAL DETAILS, CANNOT BE PICKED UP AS FUNCTIONALLY COMPARABLE TO THE ASSESSEE. ACCORDINGLY, WE HOLD SO. THUS, WE DIRECT THE ASSESSING OFFICER/TPO TO EXCLUDE FIVE CONCERNS I.E. BODHTREE CONSULTING LTD., KALS INFORMATION SYSTEMS LTD., FCS SOFTWARE SOLUTION LTD., E - INFOCHIP LTD. AND E - ZEST SOLUTIONS LTD. 1 8 . THE NEXT PLEA OF ASSESSEE IS IN FAVOUR OF INCLUSION OF SIP TECHNOLOGIES LTD. THE SAID CONCERN IS ADMITTEDLY, ENGAGED IN PR OVIDING SOFTWARE DEVELOPMENT SERVICES. HOWEVER, THE TPO EXCLUDED THE SAME BECAUSE IT WAS LOSS MAKING ENTITY. THE PLEA OF ASSESSEE BEFORE US IS THAT IT IS NOT PERSISTENT LOSS MAKING ENTITY. THE OP/TC FOR MARCH, 2006 WAS 21.78%, FOR MARCH, 2007 WAS 14.29% AND FOR MARCH, 2008 WAS ( - ) 33.15%. 1 9 . THE PUNE BENCH OF TRIBUNAL IN JOHN DEERE INDIA PVT. LTD. VS. DCIT REPORTED AS TS - 927 - ITAT - 2016(PUNE) - TP, RELATING TO ASSESSMENT YEAR 2009 - 10 HAD HELD THAT SIP TECHNOLOGIES LTD. COULD NOT BE EXCLUDED FROM THE LIST OF COMPARABLES AS IT HAD MADE PROFITS IN EARLIER YEARS. ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 12 20 . THE HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S. WELSPUN ZUCCHI TEXTILES LTD. VS. CIT IN INCOME TAX APPEAL NO.1286 OF 2014, JUDGMENT DATED 06.01.2017 HAD HELD THAT MERELY BECAUSE COMPARABLE H AD MADE LOSS IN ONE YEAR WOULD NOT BE IPSO FACTO RESULT IN ITS EXCLUSION FROM THE COMPARABLE ANALYSIS. 2 1 . SIMILAR PROPOSITIONS HAVE BEEN LAID DOWN IN OTHER DECISIONS OF PUNE BENCH OF TRIBUNAL, WHICH HAVE BEEN RELIED UPON BY THE ASSESSEE. ACCORDINGLY, WE HOLD THAT THE SAID CONCERN SIP TECHNOLOGIES LTD. BEING NOT PERSISTENT LOSS MAKING ENTITY, FUNCTIONALLY COMPARABLE, IS TO BE INCLUDED IN THE FINAL LIST OF COMPARABLES. THE ASSESSEE BEFORE US HAS ALSO FILED THE MARGINS OF COMPARABLE COMPANIES AFTER EXCLU SION / INCLUSION OF THE COMPANIES I.E. OUT OF EIGHT CONCERNED PICKED UP BY THE TPO, FIVE CONCERNS HAVE BEEN DIRECTED BY US TO BE EXCLUDED AND ONE CONCERN HAS BEEN DIRECTED TO BE INCLUDED AND THE ARITHMETIC MEAN MARGINS OF BALANCE ENTITIES WORKS OUT TO 12.9 6% AS AGAINST ASSESSEES MARGIN OF 13.49%. ACCORDINGLY, WE HOLD THAT NO ADJUSTMENT ON ACCOUNT OF ARM'S LENGTH PRICE NEEDS TO BE MADE IN THE HANDS OF ASSESSEE. THE UPWARD ADJUSTMENT MADE BY ASSESSING OFFICER / TPO IS THUS, DELETED. THE GROUND OF APPEAL N O.I IS THUS, ALLOWED IN FAVOUR OF ASSESSEE. 2 2 . NOW, COMING TO CORPORATE ISSUES RAISED BY ASSESSEE, WHEREIN THE GROUND OF APPEAL NO.19 IS AGAINST DISALLOWANCE OF FOREIGN TRAVEL EXPENSES. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT T HAT THIS ISSUE IS COVERED BY THE ORDER OF TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2007 - 08. ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 13 2 3 . BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSESSEE HAD THREE UNITS I.E. MANUFACTURING UNIT, TRADING UNIT AND STP UNIT. THE ASSESSEE HA D DEBITED SUM OF 1,42,618/ - TO WARDS FOREIGN TRAVEL IN THE MANUFACTURING UNIT. THE ASSESSING OFFICER ON VERIFICATION OF RECORDS NOTED THAT THE EXPENSES WERE INCURRED TOWARDS TRAVELLING OF EMPLOYEES OF ASSESSEE COMPANY FOR THE PURPOSE OF UNDERSTANDING NEW PRODUCT DEVELOPM ENT , WHICH THE ASSESSEE WANTED TO DEVELOP FOR ITS HOLDING COMPANY. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE SAID EXPENDITURE WAS FOR THE BENEFIT OF HOLDING COMPANY AND HENCE, IS NOT TO BE ALLOWED IN THE HANDS OF ASSESSEE. FURTHER, THE ASSESSEE HAD DEBITED SUM OF 3,65,941/ - TOWARDS FOREIGN TRAVEL IN THE TRADING UNIT. THE SAID EXPENDITURE WAS ALSO INCURRED TOWARDS TRAVEL OF ASSESSEE COMPANY S EMPLOYEES FOR THE PURPOSE OF PRODUCT KNOWLEDGE AND CUSTOMERS SUPPORT TRAINING , WHICH THE ASSESSEE WANTED TO TRADE FOR ITS HOLDING COMPANY ON SIMILAR BASIS. SINCE THE EXPENDITURE WAS INCURRED FOR THE BENEFIT OF HOLDING COMPANY, THE SAME WAS NOT ALLOWED IN THE HANDS OF ASSESSEE. IN THE STP UNIT, EXPENDITURE OF 8,26,751/ - WAS BOOKED TOWARDS FOREIGN TRAVEL WHICH WAS ALSO IN C ONNECTION WITH PRODUCT KNOWLEDGE AND CUSTOMERS SUPPORT TRAINING , WHICH THE ASSESSEE WANTED TO TRADE FOR ITS HOLDING COMPANY . H ENCE THIS EXPENDITURE WAS ALSO DISALLOWED IN THE HANDS OF ASSESSEE, BY THE ASSESSING OFFICER AND WAS CONFIRMED BY DRP AND THE ASS ESSING OFFICER MADE DISALLOWANCE IN FINAL ASSESSMENT ORDER. 2 4 . THE PLEA OF ASSESSEE IN THIS REGARD IS THAT IN THE MANUFACTURING DIVISION, THE ASSESSEE LICENSES MANUFACTURING KNOWHOW FROM RENISHAW, UK AND IN THE TRADING DIVISION, IN ADDITION TO TRADING , THE ASSESSEE ALSO REFERS SUPPORT SERVICES TO RENISHAW P IC , UK WITH REGARD TO DIRECT SALES AND REPAIRS OF PRODUCTS. FURTHER IN SOFTWARE SERVICES DIVISION, THE ASSESSEE PROVIDED ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 14 SOFTWARE SERVICES TO RENISHAW, UK, WHEREIN THE ASSESSEE IS REMUNERATED AT COST PLUS MARK UP. THE ASSESSEE HAS INCURRED SIMILAR EXPENDITURE IN THE PRECEDING YEAR ALSO, WHEREIN THE TRIBUNAL HAD HELD THAT BENEFICIARIES OF FOREIGN TRAVEL WERE SOLELY THE EMPLOYEES OF ASSESSEE AND THE VISITS WERE MEANT FOR BUSINESS PURPOSE OF ASSESSEE, WHO WAS CAPTIVE SERVICE PROVIDER TO ASSOCIATED ENTERPRISES, HENCE THE EXPENDITURE WAS ALLOW ED AS BUSINESS EXPENDITURE. THE FACTUAL ASPECTS OF THE ISSUE RAISED ARE SIMILAR AND IN THE NATURE OF BUSINESS CARRIED ON BY THE ASSESSEE, WHEREIN IT IS PROVIDING SERVICES TO ITS ASSOCIATED ENTERPRISES IN ALL THE DIVISIONS, THEN THE EXPENDITURE INCURRED ON FOREIGN TRAVEL EXPENSES ON THE EMPLOYEES OF ASSESSEE CONCERNED, ARE TO BE ALLOWED AS BUSINESS EXPENDITURE. HENCE, WE HOLD SO. THE GROUND OF APPEAL NO.19 RAISED BY THE ASSESSEE IS THUS, ALLOWED. 2 5 . NOW, COMING TO THE ISSUE RAISED VIDE GROUNDS OF APPEAL NO.20 AND 21, WHEREIN THE ASSESSEE HAS RAISED THE ISSUE OF COMPUTATION OF DEDUCTION UNDER SECTION 10B OF THE ACT, WHEREIN THE ASSESSING OFFICER HAD SET OFF ALL THE LOSSES OF OTHER UNITS WITH PROFITS OF MANUFACTURING UNIT PRIOR TO COMPUTING THE DEDUCTION U NDER SECTION 10B OF THE ACT. 2 6 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ASSESSEE HAD EARNED PROFIT IN MANUFACTURING UNIT OF 2.59 CRORES, AGAINST WHICH IT HAD CLAIMED DEDUCTION UNDER SECTION 10B OF THE ACT. HOWEVER , IN THE TRADING UNIT AND IN SOFTWARE SERVICES DIVISION, THERE WERE LOSSES AND ALSO THE ASSESSEE HAD BROUGHT FORWARD LOSSES OF PREVIOUS YEAR, WHICH HAD TO BE SET OFF DURING THE YEAR. THE ASSESSEE HAD COMPUTED DEDUCTION UNDER SECTION 10B OF THE ACT AGAINST PROFITS OF MANUFACTURING DIVISION BEFORE SETTING OFF OF ANY LOSSES. THE ASSESSING OFFICER HOWEVER, WAS OF THE VIEW THAT DEDUCTION UNDER SECTION ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 15 10B OF THE ACT WA S TO BE COMPUTED AFTER SETTING OFF OF THE LOSSES OF OTHER UNIT AND ALSO BROUGHT FORWARD LOSSE S. THERE IS NO MERIT IN THE STAND OF ASSESSING OFFICER, IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN CIT VS. YOKOGAWA INDIA LTD. (2017) 77 TAXMANN.COM 41 (SC). THE HON'BLE SUPREME COURT HAS LAID DOWN THAT LOSSES OR UNAB SORBED DEPRECIATI ON IS TO BE SET OFF AGAINST PROFITS OF ELIGIBLE UNIT AFTER THE DEDUCTION UNDER SECTION 10A OF THE ACT HAS BEEN ALLOWED. 2 7 . SIMILAR PROPOSITION HAS BEEN LAID DOWN BY PUNE BENCH OF TRIBUNAL IN THE CASE OF M/S. VISHAY COMPONENTS INDIA PVT. LTD. VS. ADDL. CIT WITH LEAD ORDER IN ITA NO.551/PN/2014, RELATING TO ASSESSMENT YEAR 2005 - 06, VIDE ORDER DATED 08.10.2015. THE TRIBUNAL IN ASSESSEES OWN CASE RELATING TO ASSESSMENT YEAR 2007 - 08 (SUPRA) REMITTED THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER. IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT AND PUNE BENCH OF TRIBUNAL, WE ARE OF THE VIEW THAT SINCE THE ISSUE IS SETTLED BY THE HON'BLE SUPREME COURT, THEN THE DEDUCTION CLAIMED UNDER SECTION 10B OF THE ACT IS TO BE ALLOWED AGAINST PROFITS OF MANUFACTURING UNIT BEFORE ADJUSTING LOSSES OF OTHER UNITS OR BROUGHT FORWARD LOSSES. WE HOLD SO. HOWEVER, THE ASSESSING OFFICER SHALL COMPUTE WORKING AND FOR THIS LIMITED PURPOSE, WE REMIT THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER, AFTER ALLOWING DEDUCTION UNDE R SECTION 10B OF THE ACT, LOSSES OF OTHER UNITS SHALL BE SET OFF AGAINST BALANCE PROFITS IN THE HANDS OF ASSESSEE AND IF AVAILABLE PROFITS ARE THERE, THEN BROUGHT FORWARD LOSSES ALSO SHALL BE SET OFF AGAINST PROFITS OF MANUFACTURING UNIT. THE ASSESSEE IS DIRECTED TO FILE WORKING BEFORE THE ASSESSING OFFICER IN THIS REGARD, WHO SHALL RE - COMPUTE BALANCE INCOME AND BALANCE LOSSES, IF ANY, TO BE CARRIED FORWARD IN THE HANDS OF ASSESSEE. THUS, GROUNDS OF APPEAL NO.20 AND 21 ARE ALLOWED. THE GROUND ITA NO. 271 /P U N/20 1 3 RENISHAW METROLOGY SYSTEMS PVT. LTD. 16 OF APPEAL N O.22 IS GENERAL IN NATURE, HENCE THE SAME IS DISMISSED. THE GROUNDS OF APPEAL RAISED BY ASSESSEE ARE THUS, PARTLY ALLOWED. 2 8 . IN THE RESULT, APPEAL OF AS SESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 16 TH DAY OF NOVEM BER , 201 8 . SD / - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 16 TH NOVEM BER , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT ; 2. THE RESPONDENT; 3. THE DRP, PUNE ; 4. THE DIT (TP/IT), PUNE ; 5. THE DR A , ITAT, PUNE; 6. GUARD FILE. / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE