Electronic Arts Games (India) Pvt.Ltd., Hyd, Hyderabad V. DCIT, Circle 17(1), Hyderabad, Hyderabad

ITA 325/HYD/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2223 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 18-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: KARISHMA R PHATARPHEKAR; HARSH R SHAH ARS
• Keywords: Transfer pricing; Wholly owned subsidiary

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NO. 325/HYD/2016 ASSESSMENT YEAR: 2011-12 ELECTRONIC ARTS GAMES (INDIA) PRIVATE LIMITED, HYDERABAD [PAN: AABCJ4279Q] VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-17(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : MS. KARISHMA R. PHATARPHEKAR & MR. HARSH R. SHAH, ARS FOR REVENUE : SMT. T.H. VIJAYA LAKSHMI, CIT-DR DATE OF HEARING : 21-12-2017 DATE OF PRONOUNCEMENT : 29-12-2017 O R D E R PER B. RAMAKOTAIAH, A.M. : THIS IS AN APPEAL BY ASSESSEE FOR THE AY. 2011-12. ASSESSEE IS CONTESTING TRANSFER PRICING ADJUSTMENTS MADE IN THE AS SESSMENT ORDER BY THE TRANSFER PRICING OFFICER [TPO]. 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE-COMPANY I S A GROUP COMPANY OF DELAWARE CORPORATION AND IS WHOLLY OWNED SUBSIDIARY OF ELECTRONIC ARTS GAMES (INDIA) PRIVATE L IMITED, INC. ASSESSEE IS ENGAGED IN PROVIDING CONTRACT SOFTWARE S ERVICES, BACK OFFICE SUPPORT SERVICES, CORPORATE IT SUPPORT SERVICES AND MARKETING SUPPORT SERVICES TO ITS ASSOCIATED ENTERPRISES [AE]. I.T.A. NO. 325/HYD/2016 :- 2 - : ASSESSEE HAS FURNISHED TRANSFER PRICING REPORT ALONG WITH RETURN AND SUBMITTED THAT ASSESSEES PLI I.E., OP/TC IS OF 10. 40% AND JUSTIFIED ON THE BASIS OF THE COMPARABLES SELECTED BY ASSESSEE. HOWEVER, THE TPO ON A REFERENCE FROM THE AO CONDUCTED FRESH SEARCH AND BENCH MARKED THE NET OPERATING PROFIT MARGI N AT 17.03% AFTER GIVING 3.78% RELIEF ON ACCOUNT OF WORKI NG CAPITAL ADJUSTMENT. THE 18 COMPARABLE COMPANIES SELECTED BY TH E TPO ARE AS UNDER: SR. NO. NAME OF THE COMPANY NCP AFTER WCA% 1. ACROPETAL TECHNOLOGIES LIMITED (SEG) 30.09 2. AKSHAY SOFTWARE TECHNOLOGIES LIMITED - 0.52 3. C T I L LIMITED 0.5 4. EVOKE TECHN OLOGIES PRIVATE LIMITED 6.22 5. E - ZEST SOLUTIONS LIMITED 34.71 6. ICRA TECHNO ANALYTICS LIMITED 21.87 7. IGATE GLOBAL SOLUTIONS LIMITED 21.39 8. INFOSYS LIMITED 40.06 9. KALS INFORMATION SYSTEMS LIMITED (SEG) 5.29 10. LARSEN AND TOUBRO INFOTECH LIMIT ED 16.04 11. MINDTREE LIMITED 8.76 12. PERSISTENT SYSTEMS AND SOLUTIONS LIMITED 18.77 13. PERSISTENT SYSTEMS LIMITED 23.73 14. R S SOFTWARE (INDIA) LIMITED 13.85 15. SANKHYA INFOTECH LIMITED 9.74 16. SASKEN COMMUNICATION TECHNOLOGIES LIMITED 24.88 1 7. TATA ELXSI LIMITED 10.2 18. ZYLOG SYSTEMS LIMITED 21.01 ARITHMETIC MEAN 17.03 3. CONSEQUENT TO THE TPO ORDER, AO ISSUED A DRAFT ASSESSMENT ORDER DT. 25-03-2015 PROPOSING THE ADJUSTME NT OF RS. 4,09,38,368/-. AGGRIEVED BY THE DRAFT ASSESSMENT ORDE R, ASSESSEE FILED AN APPLICATION BEFORE THE DISPUTE RESOLUTION PAN EL [DRP] U/S. 144C OF THE ACT, OBJECTING TO THE ADDITIONS PROPOSED IN THE DRAFT ASSESSMENT ORDER. THE DRP IN ITS ORDER, REJECTED 15 COMPARABLE I.T.A. NO. 325/HYD/2016 :- 3 - : COMPANIES,OUT OF THE 18 COMPARABLE COMPANIES SELECTED BY THE LD.TPO. ON GIVING EFFECT TO THIS DIRECTION, THE MEAN M ARGIN OF THE RETAINED COMPARABLE COMPANIES I.E., PERSISTENT SYSTEMS AND SOLUTIONS LIMITED, PERSISTENT SYSTEMS LIMITED AND SASKEN COMMUNICATION TECHNOLOGIES LIMITED [AT ITEM NOS. 12, 13 AND 16] WORKED OUT TO BE MORE THAN THE MARGIN COMPUTED BY THE TPO AT 22.46%. THEREAFTER, THE DRP CONCLUDED THAT MORE NUMBER OF COMPARABLES TAKE CARE OF THE DIFFERENCES DUE TO THE MEA N MARGIN COMPUTATION AND ACCORDINGLY, UPHELD THE ARMS LENGTH PR ICE [ALP] DETERMINED BY THE TPO. CONSEQUENT TO THE ORDER OF THE DRP, AO RETAINED SAME ADDITION AND FINALIZED THE ASSESSMENT ORD ER. HENCE, ASSESSEE AGGRIEVED. 4. ASSESSEE HAS RAISED VARIOUS GROUNDS CONTESTIN G THE ISSUE BUT MAINLY FOCUSED ON INCLUSION AND EXCLUSION OF COMPARABLES. SINCE THE ORDER OF DRP IS CAUSING CONF USION WHETHER THE SELECTION OF COMPARABLES BY THE TPO ARE UPHELD OR NOT, LD. COUNSEL ARGUED THE CASE KEEPING TWO SCENARIOS IN MIN D (I) THAT DRP HAS RETAINED ONLY THREE COMPANIES BUT THE ARITHMETIC MEAN TO BE TAKEN AT 17.03 AND (II) APPROVING OF THE 18 COMPAR ABLES OF TPO. THE ARGUMENT OF THE LD. COUNSEL ON SCENARIO ONE IS THA T THE DRP WRONGLY EXCLUDED THE COMPANY EVOKE TECHNOLOGIES PRI VATE LIMITED WHICH SHOULD HAVE BEEN RETAINED. WITH REFERENCE TO C OMPANIES WHICH ARE RETAINED BY THE DRP, LD. COUNSEL HAS OBJECTI ONS AS THESE THREE COMPANIES WERE EXCLUDED BY VARIOUS ORDERS THAT THESE ARE NOT COMPARABLE. THE REASONS OF EACH OF THE COMPA NIES IS AS UNDER: I.T.A. NO. 325/HYD/2016 :- 4 - : I. EVOKE TECHNOLOGIES PVT. LTD. : 4.1. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT THIS COMPA NY IS STRICTLY INVOLVED IN SOFTWARE DEVELOPMENT SERVICES. SHE PLACED RELIANCE ON THE FOLLOWING PAGES OF THE PAPER BOOK: (I) PB PG. 419 PROFIT AND LOSS ACCOUNT INCOME SOFTWARE DEVELOPMENT CHARGES; (II) PB PG. 426 SEGMENT REPORTING, ONLY ONE SEGMENT SOFTWARE DEVELOPMENT; (III) PB PG. 428 PART IV PRODUCT DESCRIPTION, SOFTWARE DEVELOPMENT; 4.1.1. IT WAS SUBMITTED THAT HE ARGUMENT OF THE DRP ON CONSULTANCY CHARGES IS MISPLACED, AS NOWHERE IN THE A NNUAL REPORT HAS THE COMPANY TERMED THIS INCREASE AS ABNORMAL, IN THESE CIRCUMSTANCES THERE IS NO REASON TO DOUBT THAT THIS EXPEN SE IS NORMAL IN NATURE. 4.1.2. LD. COUNSEL STATED THAT ASSESSEE INITIALLY REL IED ON WEBSITE WHILE OBJECTING BEFORE DRP. HOWEVER, ANNUAL REPORT CLEARLY STATES ONLY SOFTWARE DEVELOPMENT SERVICES. THE TPO/D RP HAVE RELIED ONLY ON ANNUAL REPORTS FOR OTHER COMPARABLES A ND NOT WEBSITE. LD. COUNSEL ARGUED THAT IN LIGHT OF THIS INC ONSISTENCY, COMPANY SHOULD BE RETAINED AS COMPARABLE. II. PERSISTENT SYSTEMS & SOLUTIONS LTD. (MERGED) : 4.2. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT THIS COMPA NY IS ENGAGED IN DIVERSIFIED SERVICES SUCH AS SOFTWARE CONSULTANCY, SOFTWARE PRODUCT DEVELOPMENT AND SYSTEM INTEGRATION SER VICES, ALL I.T.A. NO. 325/HYD/2016 :- 5 - : ACTIVITIES IN WHICH THE ASSESSEE HEREIN IS NOT ENGAGED IN. THE SAME IS EVIDENT FROM: (I) PB PG. 993, 994 FOCUSSES ON SOFTWARE PRODUCT DEVELOPMENT; (II) PB PG. 1023 INCOME FROM LICENSING OF PRODUCTS; BASED ON THE ABOVE, LD. COUNSEL PRAYED THAT THIS COMPAN Y BE REJECTED AS A COMPARABLE. 4.2.1. SHE RELIED ON THE FOLLOWING CASE LAW: I. CIT VS. INTOTO SOFTWARE INDIA PVT. LTD., (ITTA N O. 233 OF 2014, HIGH COURT OF TELANGANA AND ANDHRA PRADESH) PAGE 2; II. ALEATEL LUCENT INDIA LTD., VS. DCIT (ITA NO. 68 56/DEL-2015) PARA (V) PAGE 42; III. PERSISTENT SYSTEMS LTD. : 4.3. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT THIS COMPA NY IS ENGAGED IN DIVERSIFIED SERVICES INCLUDING INTELLE CTUAL PROPERTY LED SOLUTIONS AND SOFTWARE PRODUCTS, ALL ACTIVITIES WHICH THE ASSESSEE IS NOT ENGAGED IN. THE SAME IS EVIDENT FROM: (I) PB PG. 1062 - FOCUSSES ON SOFTWARE PRODUCT DEVELOPMENT; (II) PB PG. 1077 AND 1078 COMPANY HAS LAUNCHED PRODUCT NAMED PAXPRO PACKAGING SOLUTIONS, WHICH HAS ALSO WON AN AWARD; (III) PB PG. 1080 COMPANY IS INVOLVED IN R&D; I.T.A. NO. 325/HYD/2016 :- 6 - : (IV) PB PG. 1135, 1136 MDA DISCUSSES PRODUCT DEVELOPMENT; (V) PB PG. 1143, 1158, 1165 SALE OF PRODUCTS; (VI) PB PG. 1168 INCOME FROM LICENSING OF PRODUCTS; (VII) PB PG. 1170 NO SEPARATE SEGMENTAL; (VIII) THE COMPANY OWNS INTANGIBLES PB PG. 1160; (IX) PB PG. 1073, THE COMPANY HAS HAD VARIOUS ACQUISITIONS AND JOINT VENTURES DURING THE YEAR; (X) THE COMPANY IS AN ABNORMALLY HIGH TURNOVER COMPANY AS COMPARED TO THAT OF ASSESSEE HEREIN AND OUGHT TO BE REJECTED ON THE BASIS OF THE HON'BLE DRP ORDER FOR AY . 2010-11 AS UPHELD BY THE ITAT; BASED ON THE ABOVE, LD. COUNSEL PRAYED THAT THIS COMPAN Y BE REJECTED AS A COMPARABLE. 4.3.1. LD. COUNSEL RELIED ON THE FOLLOWING CASE LAW : I. CIT VS. INTOTO SOFTWARE INDIA PVT. LTD., (ITTA N O. 233 OF 2014, HIGH COURT OF TELANGANA AND ANDHRA PRADESH) PAGE 2; II. ALEATEL LUCENT INDIA LTD., VS. DCIT (ITA NO. 68 56/DEL-2015) PARA (VI) PAGE 43; III. SYMANTEE SOFTWARE AND SERVICES INDIA PRIVATE L IMITED VS. DCIT (ITA NO. 614/MDS-2016) PARA (10) PAGE 12; I.T.A. NO. 325/HYD/2016 :- 7 - : IV. SASKEN COMMUNICATION TECHNOLOGIES LTD. : 4.4. LD. COUNSEL FOR ASSESSEE SUBMITTED THAT THIS COMPA NY IS AN ABNORMALLY HIGH TURNOVER COMPANY AS COMPARED TO THAT OF ASSESSEE-COMPANY HEREIN AND OUGHT TO BE REJECTED ON TH E BASIS OF HON'BLE DRP ORDER FOR AY. 2010-11 AS UPHELD BY THIS ITAT. LD. COUNSEL CLAIMED THAT THE HON'BLE DRP HAS FOR AY. 2012 -13 REJECTED THIS COMPANY AS A COMPARABLE. IN THE AY. 2012-13, THE DEPARTMENT HAS NOT EVEN CHALLENGED THE DRP ORDER BEFOR E THE ITAT. THE FACTS OF THIS COMPANY IS SAME FOR AY. 2012-13 AND AY. 2011- 12 WHICH IS EVIDENT FROM THE COMPARISON OF THE FOLLOWI NG PAGES WITH THE ORDER OF THE HON'BLE DRP FOR AY. 2012-13; (I) PB PG. 1314, 1336, 1339, 1346 AND 1350; BASED ON THE ABOVE, LD. COUNSEL PRAYED THAT THIS COMPAN Y BE REJECTED AS A COMPARABLE. 4.4.1. LD. COUNSEL RELIED ON THE FOLLOWING CASE LAW : I. ALEATEL LUCENT INDIA LTD., VS. DCIT (ITA NO. 685 6/DEL-2015) PARA (VIII) PAGE 46; II. SYMANTEE SOFTWARE AND SERVICES INDIA PRIVATE LI MITED VS. DCIT (ITA NO. 614/MDS-2016) PARA (12) PAGE 18; 5. IT WAS THE SUBMISSION OF LD. COUNSEL THAT AFTER EXCLUDING THE THREE COMPANIES AND RETAINING ONLY ONE C OMPANY I.E., EVOKE TECHNOLOGIES PRIVATE LIMITED, THE ARITHMETI C MEAN OF I.T.A. NO. 325/HYD/2016 :- 8 - : ASSESSEE-COMPANY IS MORE AND WITHIN THE RANGE AND THER EFORE, NO ADDITION NEED BE MADE. 6. ALTERNATELY, LD. COUNSEL SUBMITTED THAT IF TPOS 18 COMPARABLES ARE CONSIDERED APPROVED BY THE DRP, THEN , ASSESSEE IS ASKING FOR EXCLUSION OF ONLY THREE COMPANIES, WH ICH SHOULD HAVE BEEN EXCLUDED AND THOSE ARE (1 ) INFOSYS LIMITED AND (2) L&T ON TURNOVER BASIS AND (3) PERSISTENT SYSTEMS AND SOLUTIONS LTD., FOR THE REASONS STATED ABOVE. IF THESE THREE COMPANIES A RE EXCLUDED, THEN, ASSESSEE WOULD BE WITHIN THE RANGE AND ACCORDING LY, NO ADDITION NEED BE MADE. 7. LD.CIT-DR WHILE ADMITTING THAT THE DRP DIRECTION IS NOT VERY CLEAR, STATED THAT IT ULTIMATELY UPHELD THE ARITHMETI C MEAN OF 17.03%, WHEREAS THE RETAINED COMPANIES ARITHMETIC MEA N WOULD COME TO 22.46%. IT WAS THE SUBMISSION THAT ASSESSEE H AS NOT GIVEN CLEAR GROUNDS AND MOST OF THE GROUNDS ARE ACADE MIC. IF ONLY ONE COMPARABLE IS RETAINED AS REQUESTED BY LD. COUNSE L, THE TP STUDY IS INCOMPLETE. THEREFORE, MORE NUMBER OF COMPA RABLES AS OPINED BY THE DRP WOULD IRON OUT THE DIFFERENCES WHILE ADOPTING THE TNMM METHOD. THERE IS NO DISPUTE WITH REFERENCE TO TH E FUNCTIONALITY OF ASSESSEE-COMPANY BEING SOFTWARE DE VELOPMENT SOLUTIONS AND PARTICULARLY GAMING APPLICATIONS AND MO ST OF THE COMPANIES SELECTED BY THE TPO ARE IN THE SAME LINE O F FUNCTIONALITY. SEMANTICS AND FINE PRINTS IN THE ANNU AL REPORT/WEB SITES SHOULD NOT BE BASIS FOR EXCLUSION OF THE COMPANI ES. 7.1. IT IS FURTHER SUBMITTED THAT ASSESSEE WAS BLOWING HOT AND COLD AS FAR AS INCLUSION/EXCLUSION OF EVOKE TEC HNOLOGIES I.T.A. NO. 325/HYD/2016 :- 9 - : PRIVATE LIMITED IS CONCERNED AND REFERRED TO THE OBJEC TIONS FILED BEFORE THE DRP WHICH WAS ACCEPTED BY THE DRP. IT WAS S UBMITTED THAT THIS COMPANY CANNOT BE INCLUDED AS CONTENDED BY TH E LD. COUNSEL. 8. LD. COUNSEL IN REPLY SUBMITTED THAT AFTER EXCLUSIO N OF THREE COMPANIES SELECTED BY DRP, ONE COMPANY CAN BE RETAINED AND RELIED ON THE CO-ORDINATE BENCH DECISION IN THE C ASE OF HAWORTH INDIA PVT. LTD., [11 TAXMANN.COM 76] TO SUBMIT THAT EVEN ONE COMPANY CAN BE COMPARED IN THE ABSENCE OF ANY OT HER COMPARABLE COMPANIES. IT WAS FURTHER SUBMITTED THAT OTHER GROUNDS BECOME ACADEMIC, IF THESE COMPARABLES ARE EX CLUDED. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUS ED THE ORDERS PLACED ON RECORD. IT IS SURPRISING THAT THE DRP HAS NOT APPLIED ITS MIND CORRECTLY ON MANY OF THE COMPANIES AN D RETAINED ONLY THREE COMPANIES, THE ARITHMETIC MEAN MARGIN OF THE COMPARABLES RETAINED WORKS OUT TO 22.46% WHICH WAS M ORE THAN THE ARITHMETIC MEAN ARRIVED AT BY THE TPO. IN SUCH CIRC UMSTANCES, THE DRP SHOULD HAVE GIVEN CLEAR DIRECTIONS, WHETHER A FRESH SEARCH IS REQUIRED OR SHOULD HAVE DELETED THE ADDITION AS THO SE THREE COMPANIES RETAINED BY THE DRP ITSELF ARE EXCLUDED IN PREVIOUS YEAR AND LATER YEAR BY DRP ITSELF ON FUNCTIONALITY. LD. C OUNSEL PLACED ON RECORD THE ORDER OF THE DRP FOR AY. 2012-13 IN WHI CH THE DRP EXCLUDED SASKEN COMMUNICATION TECHNOLOGIES LIMITED, W HEREIN IT WAS CLEARLY STATED THAT THE SAID COMPANY DERIVES REVENUE FROM PRODUCT AND TECHNOLOGY LICENSING AND INSTALLATION AND COMMISSIONING SERVICES ALONG WITH SOFTWARE SERVICES. IT IS ALSO NOTED THAT RECEIPTS FROM SOFTWARE PRODUCT SERVICES IS H IGHER THAN I.T.A. NO. 325/HYD/2016 :- 10 -: THE RECEIPTS FROM SOFTWARE SERVICES. FOLLOWING THE C O-ORDINATE BENCH DECISION IN THE CASE OF PLANET ONLINE PVT. LTD., THE DRP EXCLUDED SASKEN COMMUNICATION TECHNOLOGIES LIMITED IN LATER YEAR. THE FACTS BEING SAME FOR THIS YEAR ALSO, THE D RP SHOULD HAVE EXCLUDED THIS COMPANY. WE ARE UNABLE TO UNDERSTAND HO W THIS COMPANY IS RETAINED FOR THIS ASSESSMENT YEAR. AS FAR AS THE OBJECTIONS WITH REFERENCE TO PERSISTENT SYSTEMS AND SOLU TIONS LIMITED IT IS NOTICED THAT THE CO-ORDINATE BENCH IN EARLIER YEA R HAS EXCLUDED AND FURTHER OTHER CO-ORDINATE BENCHES ALSO EXCLUDED ON FUNCTIONALITY BASIS. 9.1. AS FAR AS EVOKE TECHNOLOGIES PRIVATE LIMITED I S CONCERNED, THE SAME COMPANY WAS EXCLUDED IN LATER YE AR ALSO BY THE DRP ON WHICH, ASSESSEE HAS NOT OBJECTED. THEREFOR E, THAT LEAVES US WITH NO COMPARABLES FOR THIS YEAR, IF SCEN ARIO ONE IS TAKEN AS BASIS. THIS IS RESULTING IN PECULIAR SITUATI ON WITH NO COMPARABLES. 9.2. IF WE CONSIDER THE SCENARIO TWO THAT DRP WHIL E UPHOLDING THE ORDER OF THE TPO HAS INDEED UPHELD THE 18 COMPARABLES, DRP HAS EXCLUDED 15 COMPARABLES DUE TO VARIOUS OBJECTIONS. ASSESSEE IS ASKING FOR EXCLUSION OF INFO SYS LIMITED AND L&T ON TURNOVER BASIS AND PERSISTENT SYSTEMS AND SOLUTIONS LIMITED ON FUNCTIONALITY BASIS. SINCE ASSESSEE IS CH ERRY PICKING THE COMPARABLES, WE ARE NOT IN AGREEMENT WITH THE ARGUMEN T OF LD. COUNSEL THAT ONLY FEW COMPANIES SHOULD BE EXCLUDED, S O THAT ARITHMETIC MEAN WILL BECOME LESS THAN WHAT ASSESSEES A RITHMETIC MEAN IS. THIS SORT OF SELECTIVE EXCLUSIONS WILL DIST ORT THE COMPARABILITY EXERCISE UNDERTAKEN OR TO BE UNDERTAKEN UNDER THE I.T.A. NO. 325/HYD/2016 :- 11 -: PROVISIONS. SINCE THE DRP APPEARS TO HAVE EXCLUDED A LL THE 15 COMPARABLES AND OTHER THREE COMPARABLES ARE ALSO TO BE EXCLUDED, WE ARE OF THE OPINION THAT TPO SELECTION OF COMPARABLE S IS NOT PROPER AND HIS EXERCISE IN SELECTING FRESH COMPARABL ES HAS RESULTED IN UNNECESSARY AND ACADEMIC WORK. THEREFORE, ONLY OPTION LEFT IS TO SET ASIDE THE ORDER OF TPO AND CONSEQUENTIAL ORDER O F DRP AND AO AND RESTORE THE ISSUE TO TPO AGAIN TO UNDERTAKE THE EXERCISE AFRESH ON THE BASIS OF EITHER ASSESSEE REPORT OR FRES H SEARCH ON THE BASIS OF NEW PARAMETERS/COMPARABLES AND DETERMINE W HETHER ANY ADDITION IS WARRANTED ON THE FACTS. WE ALSO ADVICE THE DRP TO GIVE CLEAR DIRECTIONS TO THE TPO SO THAT THIS SORT OF CONFUS ION ARISING IN THE MIND OF ASSESSEE AND OTHER JUDICIAL AUTHORITIES CA N BE AVOIDED. THE GROUNDS OF ASSESSEE ARE ALLOWED FOR STATISTICAL P URPOSES 10. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DECEMBER, 2017 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 29 TH DECEMBER, 2017 TNMM I.T.A. NO. 325/HYD/2016 :- 12 -: COPY TO : 1. ELECTRONIC ARTS GAMES (INDIA) PRIVATE LIMITED, 7 TH FLOOR, VEGA BLOCK, ASCENDAS IT PARK, MADHAPUR, HYDERABAD. 2. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-17 (1), HYDERABAD. 3. DISPUTE RESOLUTION PANEL (DRP) 4. DIRECTOR OF INCOME TAX (IT & TP), HYDERABAD. 5. ADDL. COMMISSIONER OF INCOME TAX (TRANSFER PRICI NG), HYDERABAD. 6. D.R. ITAT, HYDERABAD.