Credit Pointe Services Pvt.Ltd, Pune V. Deputy Commissioner of Income tax, Pune

ITA 377/PUN/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4322 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 14-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Transfer pricing; Working capital adjustments; Wholly owned subsidiary
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI R. S. SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NO.377/PUN/2017 / ASSESSMENT YEAR : 2012-13 CREDIT POINTE SERVICES PVT. LTD, OFFICE NO. 1-B, THE CEREBRUN IT PARK, KALYANINAGAR, PUNE-411 014 PAN : AACCC7203N .... / APPELLANT / V/S. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1), PUNE. / RESPONDENT ASSESSEE BY : SHRI KRISHNA GUJARATHI, AR REVENUE BY : SHRI PANKAJ GARG, DR / DATE OF HEARING : 11.03.2019 / DATE OF PRONOUNCEMENT : 12.03.2019 / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THIS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM TH E ORDER OF THE LD. CIT(APPEAL)-13, PUNE DATED 27.12.2016 FOR THE AS SESSMENT YEAR 2012-13 AS PER THE GROUNDS OF APPEAL ON RECORD. 2. ON PERUSAL OF THE GROUNDS OF APPEAL FILED BY THE ASSESS EE, IT IS NOTED THAT THE ASSESSEE HAS PREFERRED 7 GROUNDS OF TH E APPEAL BEFORE US. HOWEVER AT THE TIME OF HEARING, THE LD. AR OF THE ASS ESSEE SUBMITTED THAT HE IS ONLY PRESSING GROUND NO. 4, WHEREA S THE REST OF 2 ITA NO. 377/PUN/2017 A.Y.2012-13 THE GROUNDS ARE NOT PRESSED. THEREFORE, THE REST OF T HE GROUNDS ARE DISMISSED AS NOT PRESSED . THE GROUND NO. 4 IS AS UNDER:- 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW , THE HONOURABLE CIT (APPEAL) - 13 , PUNE ERRED IN CONFIRMING THE INCLUSION OF UNIVERSAL PRINT SYSTEMS LIMITED IN THE LIST OF COMPARABLE COMPANIES BY THE LEARNED TPO WITHOUT APPRECIA TING THE FACT THAT : A) THE SAID COMPANY IS NOT COMPARABLE WITH THE APPELLAN T SINCE THE FUNCTIONS PERFORMED BY THE COMPANY ARE DI FFERENT THAN THAT PERFORMED BY THE APPELLANT AND THE SCALE OF OPER ATIONS AND TURNOVER OF THE SAID COMPANY IS SUBSTANTIALLY HIGHER THAN THAT OF THE APPELLANT . B) THE REVENUE FROM ITES SEGMENT IS 21 . 63% OF THE TOTAL REVENUE AND IT DOES NOT SATISFY THE FILTER, ' COMPANIES WITH INCOME FROM IT ENABLED SERVICES > 50% OF THE OPERA TING REVENUE OR SEGMENTAL REVENUE ARE SELECTED ', INTRODUCED BY THE LEARNED TPO . 3. THE BRIEF FACTS ARE THAT THE ASSESSEE IS WHOLLY OWNED SUBSIDIARY OF CREDIT POINTE OWNED, USA. THE ASSESSEE IS ENGAGED IN TH E PROVISION OF IT ENABLE BACK OFFICE SERVICES RELATED TO DATA COMPILATION, CLEANING AND STRUCTURING. THE ASSESSEE ALSO PROVIDES ALLIED SOFTWARE DEVELOPMENT SERVICES LINKED TO THE DATA COMPILATION AND ST RUCTURING ACTIVITY. 4. THE LD.A.R. AT THE TIME OF HEARING ALSO DEMONSTRATED FR OM THE CREDIT POINT SERVICES PVT. LTD ANALYSIS AND REPORT FOR FY 2011-12 AT PAGE NO. 51 OF THE PAPER BOOK WHEREIN THE EXACT SERVICE S RENDERED BY 3 ITA NO. 377/PUN/2017 A.Y.2012-13 THE ASSESSEE IS MENTIONED IN PARA NO. 2.2.1 OF THE SAID REP ORT WHICH STATES THAT CREDIT POINTE HAS ENTERED INTO INTERNATIONAL SERVICES AGREEMENT WITH CREDIT POINTE US TO PROVIDE SUPPORT SERV ICES (DATA PROCESSING AND ANCILLARY SOFTWARE DEVELOPMENT). THE SCOPE O F THE SAID AGREEMENT REQUIRES CREDIT POINTE TO PROVIDE SUPPORT SERVICES (DATA PROCESSING AND ANCILLARY SOFTWARE DEVELOPMENT) IN THE NATURE OF ORGANIZING /CLEANING THE DATA TO SUIT THE REQUIREMENT OF THE CREDIT POINTE US AT LARGE AND ANCILLARY SOFTWARE DEVELOPMENT FOR IN TEGRATING THE SAID DATA INTO THE SYSTEMS OF CREDIT POINTE US. THE C REDIT POINTE INDIA IS REMUNERATED ON THE BASIS OF COST PLUS MARK UP O F 9.95% FOR THIS CATEGORY OF SERVICE. 5. AS PER THE TP REPORT, EIGHT (8) COMPANIES WERE SELECTE D BY THE ASSESSEE AS COMPARABLE. HOWEVER, THE TPO REJECTED ALL T HE EIGHT COMPANIES AND STARTED AFRESH SEARCH AND ACCORDINGLY PR OVIDED A NEW SET OF COMPARABLES WITH THE FUNCTIONS OF THE ASSESSEE IN W HICH THE UNIVERSAL PRINT SYSTEMS LTD WAS ALSO INCLUDED. EVEN IT WAS OBJECTED BY THE ASSESSEE, HOWEVER IN THE FINAL SET OF COMPARABLES, U NIVERSAL PRINT SYSTEMS LTD WAS TAKEN AS COMPARABLES WITH THAT O F THE FUNCTIONS OF THE ASSESSEE. ASSESSEE OBJECTED THAT IT IS H AVING LESS THAN 50% OF THE OPERATING REVENUE FROM ITES SEGMENT, H ENCE IT IS NOT COMPARABLE WITH IT. LD. TPO STATED THAT THIS CRITERIA IS APPLICA BLE ONLY IF THE SEGMENTAL REVENUE IS NOT GIVEN AND IN THIS CASE THE DETAILS OF SEGMENT PROFIT ARE GIVEN. HENCE, THE TPO DID NOT ACCEPT T HE ASSESSEES OBJECTION. BEFORE LD. CIT(A), ASSESSEE HAS MADE THE FOLLOWING SUBMISSIONS:- UNIVERSAL PRINT SYSTEMS LTD. (PREPRESS BPO SEGMENT): - YOUR HONOUR HAS INTRODUCED PREPRESS BPO SEGMENT OF UNIVERSAL SYSTEMS LTD IN THE LIST OF COMPARABLES. THE ASSESSE E WISHES TO STATE THAT THE COMPANY UNIVERSAL PRINT SYSTEMS LIMITED IS NOT COMPARABLE TO THE ASSESSEE, DUE TO THE FOLLOWING REASONS:- 4 ITA NO. 377/PUN/2017 A.Y.2012-13 CRITERIA OF ITES SE GMENT> 50% O F OP ER A T I NG R EVEN U E: THE A SSE S SEE W I S H ES T O S T A T E T HAT TH E C OMPANY DOES NOT SATISFY T H E S ELECTI O N CRIT E R I A FOR TH E C OMPARAB LE S W IT H ' I NCO M E F ROM ITES > 50 % OF THE OPERATING R EVENUE O R SEGMENTAL R EVENU E A R E S E L EC T ED. AD O PT E D BY YOUR HONOUR YOURSELF . THE INCOME OF COMPANY UNIVERSAL PRIN T SYST E MS L IM I T E D F ROM ITES SEGMENT AS P E R TH E A N NU AL REPORT IS 2 1 .63 % OF TH E TOTA L OP E RATIN G R E V E N U E O R S EGM E NTA L R E V EN U E . TH E C ALCULATI O N IS AS UNDER : SR I P ARTICU L A R S AMOUNT I NO ! A) RE VENU E F R O M ITE S SE GM E N T 6, 1 7 , 6 7, 000 I B) T O TA L O P E RA TI NG OR SE GM E NTAL REV E NU E 2 8 ,5 5 , 1 4 , 000 C) P ERC ENTAGE OF [TES / TO TA L R EVENUE 21 . 63 % THE ASSESSE E WI S H E S TO STATE THAT UNIV E R S AL PRINT SYST E MS LIMITED I S NOT FUNCTIONALLY C OMPARABL E TO TH E AS S ESS EE . THE ASS E S SEE PROVIDES SUPPORT SERVIC E S I N THE NATUR E OF DATA ENTRY, DATA C OMP I LATI O N DATA C L E ANING AND DATA S TRU C TURING TO SUIT THE REQUIR E M E NTS OF THE CRED I T POINTE IN C. US . UNIV E R S AL PRINT SY S TEMS LIMITED DERIVE S ITS REVENU E S MAINLY FROM ' PRE PRESS BPO' A C TIVITY . TH E PR E PRESS BPO A CTIVITY IN C LUD E S ALL THE PROC ES SES AND PROC E DURES THAT O C CUR BETW EE N TH E CREATIO N OF PRINT L A YOUT AND THE FINAL PRINTING H E N C E , THE ASSESS E E WISHE S TO S TATE THAT UNI VE RSAL PRINT SYST E MS LIMITED IS NOT FUNCTIONALLY COMPARABL E TO THE ASS E S S EE . 3 . HIGH - END ITES SERVICES: U NI V E R SA L PRINT S YST E M S LIM I T ED P R O V ID ES M UC H SPE C IALI Z E D S E R V I CE S WHI C H R E QUIR E EX P E RTI SE AND S KIL L E D WO RK FO R CE I N TH ESE F I E LD S U NL I K E IT ES AC T IVI TI E S UND E RT A K E N B Y TH E ASSES S EE. TH E CO M P AN Y U NIV E RS A L P RI NT SYS T EMS LIMIT E D R E QU IR E S S KILL ED A ND T A L E NT E D E MPL OY EE S C A N B E O B SERVE DFR O M TH EI R SIT E: C UTT I N G E D G E INF R A S T RUC TUR E & A H I G HL Y S K I LL E D WORKFOR CE E N S U RE T H A T T H E B ES T POSSIB L E R E SULT S A R E AC HI EVED F ROM A N Y G R A P HI C I N PUT . ... ' TH E ASSESS EE PROVI DES SUPP O RT S E R V I C ES I N T H E N ATU R E O F D AT A ENTRY , D ATA C OM P IL A TION DATA C L E A NIN G A N D DAT A ST R UC T UR I NG TO S UIT T H E REQ UI R E M E N TS OF TH E CREDI T P O IN T E I NC. US . TH E A SSES S EE IS NOT RE QU IRED TO APPLY A N Y T EC HN ICA L K N OW L E D GE O R E XP ER I E N CE IN PERFOR MI NG TH E A B OV E ST A T ED F U NC TIONS . I N TH E V I E W OF A BOVE , T H E ASSESSEE R E Q U ESTS YO U R H O N OU R TO KI NDL Y E X C L UDE UN IV E RS A L PRI N T SYST E M S L I M I TE D FROM T H E S E T OF C OM P AR ABL E S . 4 . SUPER NORMAL PROFIT: , TH E ASSESSE E W I S H ES T O S TA T E T H A T T HE C O M PA N Y U N IVE R SA L PRI NT S YSTEMS L I M I T E D H AS A PL IOF 5 9 . 40%, WHI C H IS S UP ER N O R MAL C O N SI D E RIN G T H E L INE OF THE B U S IN ESS O F TH E A S SESSE E. H E N C E , T HE ASSES S EE WISH ES T O EX C L UDE CO MP A N Y H AVI N G A S U PE R N O RMAL PROFI T FRO M TH E F I NAL SE T OF C OM PA RABL ES ' HOW E V E R T H E LEA RN ED TPO DID N OT ACCE P T TH E CONTENTI O N OF T H E AP P E LL AN T TPO STA T ED T H A T THE C RITERI A OF I TES S EG M E N T > 50 % OF OPERA TING R EVE N UE IS A P P L I C AB L E O NL Y I F TH E SEG M E N T R EVE NU E IS NOT GI VE N . TH E S A I D CO N T E NTIO N OF TH E LE ARN E D T PO A M O UNT S T O CH E RR Y PI CK I N G OF THE CO MPAN Y WH I CH I S C ON VENIE N T TO T H E L E A RNED TPO . THE LEARNED TPO DID NO T C OMMENT O N TH E F UN C TI ONAL DIFFER E NC E AS P OIN T ED OUT B Y TH E AP P E L L A N T . H EN CE TH E APPEL LANT R EQUE S T S Y O UR H ONO U R TO R EM O VE U NI VERSA L P RINT SYSTE M S L IM ITED F R O M THE FI N A L LIST O F COR N P A RA BL ES A N D R EC AL CUL AT E T H E AR MS LEN GT H P RI CE . IF TH E A B O V E CON T ENTI O N O F TH E A PP E LL A NT I S N OT AC C E PT ED, T H E APP E L L AN T REQUESTS YOU R HO N O U R TO C ALCUL A T E P LI AFT E R WO R KIN G C AP ITA L A DJU ST MENT S AT 39. 9 4 % AS PER GR O U ND O F 5 ITA NO. 377/PUN/2017 A.Y.2012-13 A PP EAL NO . 9 (C ) . THE LEARNED TPO HAD ACCEPTED THE APPELLANT'S CONTENTION THAT WORKING CAPITAL ADJUSTMENT IS TO BE ALLOWED. HOWEVE R , THE LEARNED TPO DID NOT CONSIDER THE SAME WHILE CALCULATING THE PLI AFTER WORKING CAPITAL ADJUSTMENTS . THE COPY OF CALCULATION OF PLI AFTER WORKING CAPITA L ADJUSTMENTS IS APPEARING ON PAGE NO. 1 2 9 OF THE PAPER BOOK . THE APPELLANT PRAYED THAT THE CORRECT PLI AFTER WCA OF UNIVERSAL PRINT SYSTEMS LTD . BE TAKEN I . E. 39.94% FOR THE PURPOS E OF CALCULATING AVERAGE PLI AND ARM ' S LENGTH PRICE BE RECOMPUTED . THE APPELLANT REQUESTED TO EXCLUDE UNIVERSAL PRINT SYSTEMS LIMITED IN THE LIST OF COMPARABLE COMPANIES AS THE REVENU E FROM ITES SEGMENT IS 21 . 63% OF THE TOTAL REVENUE AND IT DOES NOT SATISFY THE SAID FILTER IN T RODU CE D B Y THE LEARNED TP THE LD. CIT(A) AFTER CONSIDERING THE FACTS OF THE CASE, THE SUBMISSIONS OF THE ASSESSEE HAS UPHELD THE ORDER OF THE TPO INCLUDING THEREBY UNIVERSAL PRINT SYSTEMS LTD IN THE LIST OF COMPARABLES COMPANIES. 6. AT THE TIME OF HEARING, THE LD.A.R. VEHEMENTLY ARGUED THAT THE UNIVERSAL PRINT SYSTEMS LTD IS FUNCTIONALLY DIFFERENT FROM THA T OF THE ASSESSEE AND FURTHER SUBMITTED THAT NEITHER THE TPO NO R THE LD. CIT(A) IN THEIR RESPECTIVE ORDERS HAVE DISCUSSED AND ANAL YSED THE FUNCTIONAL DETAILS OF UNIVERSAL PRINT SYSTEMS LTD WHILE HOLDING IT TO BE A COMPARABLE COMPANY WITH THAT OF THE ASSESSEE. THE LD.A.R. ALSO PLACED RELIANCE ON THE DECISION OF THE BANGALORE TRIBUNAL IN THE CASE OF M/S XL HEALTH CORPORATION INDIA PVT. LTD. VRS. ACIT 20 18 (4) TMI 82, WHEREIN IT WAS HELD THAT UNIVERSAL PRINT SYSTEMS LTD IS TO BE EXCLUDED FROM THE LIST OF COMPARABLES. 7. THE LD. DR, PER CONTRA, PLACED RELIANCE ON THE ORDERS OF SUB- ORDINATE AUTHORITIES. 8. WE HAVE PERUSED THE CASE RECORDS AND HEARD THE RIV AL CONTENTIONS AND HAVE GIVEN CONSIDERABLE THOUGHT ON THE RECORDS AND 6 ITA NO. 377/PUN/2017 A.Y.2012-13 RELEVANT DOCUMENTS PLACED BEFORE US. FROM THE FACTS ON R ECORD AND MORE SPECIFICALLY FROM THE TRANSFER PRICING INDEX AND REPOR T OF THE ASSESSEE, THE DETAILS OF FUNCTIONAL STRUCTURE IS PROVIDED AN D AFTER PERUSAL OF THE ORDERS OF THE TPO AND THE LD. CIT(A), WE FIND THAT THER E IS NO SPECIFIC FINDINGS AS TO THE ANALYSIS REGARDING THE FUNC TIONING OF UNIVERSAL PRINT SYSTEMS LTD VIS A VIS THE FUNCTION OF THE A SSESSEE COMPANY BEFORE HOLDING IT TO BE A COMPARABLE COMPANY. IN THE DECISION OF THE BANGALORE TRIBUNAL IN THE CASE OF M/S XL HE ALTH CORPORATION INDIA PVT. LTD. VRS. ACIT 2018 (4) TMI 82, IT W AS HELD AS UNDER :- C. UNIVERSAL PRINT SYSTEMS LTD.:- THIS COMPANY WAS SELECTED BY THE TPO BY OBTAINING I NFORMATION BY EXERCISING OF THE POWER VESTED WITH HIM UNDER THE P ROVISIONS OF SECTION 133(6) OF THE IT ACT. THE TPO HELD THAT THIS COMPAN Y SATISFIES ALL THE FILTERS SELECTED BY HIM. HOWEVER THIS COMPANY WAS O BJECTED BY THE ASSESSEE-COMPANY BEFORE THE TPO ON THE GROUNDS OF F UNCTIONAL DIFFERENCES AS IT IS ENGAGED IN THE BUSINESS ACTIVI TIES SUCH AS PRINTING AND ALLIED ACTIVITIES, HIGH PROFIT MAKING COMPANY A ND ALSO FAILS THE EMPLOYEE COST FILTER, THE OBJECTIONS OF THE ASSESSE E-COMPANY WERE OVER RULED BY THE TPO BY HOLDING AS UNDER: 'COUNTER TO THE OBJECTION ON FUNCTIONAL COMPARABILI TY: THE FUNCTIONS OF THE COMPARABLE ARE SIMILAR IN THE SENSE THAT THE. PRE- PRESS BPO UNIT PROVIDES BACK OFFICE SUPPORT SERVICE S. COUNTER TO THE OBJECTION ON HIGH MARGINS: RELIANCE IS PLACED ON THE DECISIONS OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CHRYSCAPITAL INVESTMENT ADVISORS AND THE DE LHI TRIBUNAL IN NOKIA INDIA PVT LTD (ITA NO. 24210/2010). COUNTER TO THE OBJECTION ON EMPLOYEE COST FILTER: THE COMPANY OPERATES IN FOUR MAJOR SEGMENTS VIZ., R EPRO, LABEL PRINTING, OFFSET PRINTING AND PRE-PRESS BPO AND FOR OUR STUDY, ONLY THE PRE-PRESS BPO SEGMENT HAS BEEN CONSIDERED. THEREFOR E, FILTERS ARE TO BE APPLIED ONLY ON THE FIGURES OF THIS SEGMENT. THE CO MPANY WAS SPECIFICALLY ASKED TO FURNISH THE DETAILS OF EMPLOY EE COST U/S 133(6) OF THE ACT. VIDE ITS' LETTER DATED 18/12/2015, THE COM PANY HAS FURNISHED P&L A/C OF PRE PRESS BPO SEGMENT, FROM WHICH IT IS SEEN THAT THE 'EMPLOYEE COST RELATING TO PRE-PRESS BPO SEGMEN T IS RS. 268. 76(LACS). THE EMPLOYEE COST OF RS 268.76(LACS) TURN OVER OF RS 611.96 (LAKHS) WORKS OUT TO 44%. THEREFORE, THIS COMPARABL E CLEARS THE EMPLOYEE- COST FILTER. THE RESPONSE RECEIVED FROM THE COMPANY U/S 133(6) O F THE ACT HAS BEEN ATTACHED WITH THIS ORDER. (ANNEXURE-G) THE TPO HAS USED ONLY CURRENT DATA FOR THE F.Y 2011-12. THE CORRECTED MARGIN IS 5 2.46%.' THE HON'BLE DRP ALSO CONFIRMED THE FINDINGS OF TPO. 7 ITA NO. 377/PUN/2017 A.Y.2012-13 II) BEING AGGRIEVED, THE ASSESSEE-COMPANY IS BEFORE US. IT IS CONTENDED BY THE ASSESSEE THAT THIS COMPANY FAIL REVENUE FILT ER MORE THAN 75% FROM ITES SEGMENT AND ALSO FUNCTIONALLY NOT COMPARA BLE WITH THAT OF THE ASSESSEE-COMPANY AND ALSO FAILS THE FILTER OF EARNI NGS FROM EXPORT AGAINST 75% OF THE TOTAL REVENUE AND ALSO FAILS THE EMPLOYEE COST FILTER AS EMPLOYEE COST IS ONLY 18.56% OF THE SALES. III) WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE HAVE PERUSED THE ANNUAL REPORT OF THIS COMPANY PLACED AT PAGES 352 TO 463 OF PAPER BOOK. FROM THE PAGE NO. 354 IT IS STATED AS UNDER. 'IN 2011-12, YOUR COMPANY FACED MANY CHALLENGES RAN GING FROM HISTORICALLY STEEP FUEL PRICE INCREASES, NON-AVAILA BILITY OF POWER THROUGHOUT THE YEAR AND HIGH RAW MATERIAL COSTS. THE LABELS AND OFFSET DIVISIONS IN PARTICULAR WERE NEGATIVELY IMPACTED DUE TO NON-AVAILABILITY OF POWER. TAMIL NADU ON THE WHOLE, FACED DRASTIC POWER OUTAGES AND RESTRICT IONS, WHICH WERE MAINLY DIRECTED AT INDUSTRIES IN ORDER TO KEEP THE VOTE BANKS HAPPY. THE TWO DIVISIONS SAW AS MUCH AS 6 HOURS OF POWER CUTS IN A DAY IN ADDITION TO TWO DAYS OF ''POWER HOLIDAYS' IN A WEEK. ALTHOUGH THIS SITUATION IS EXP ECTED TO EASE IN THE COMING MONTHS, IT HAS HAD AN ADVERSE IMPACT ON OPERATIONS IN 2011-12. THE PERIODIC FUEL PRICE INCREASES THROUGH OUR 2011- 12 NOT JUST ENSURED HIGH INFLATION CUTTING ACROSS EVERY INPUT ELEMENT, BUT ALSO ADVERSELY AFFECTED OUR COST OF CAPTIVE POW ER GENERATION WHICH BECAME THE ONLY SOURCE OF POWER DURING CERTAIN PERIODS IN 2011-12. IN ADDITION, PROCUREMENT COST O F RAW MATERIALS SUCH AS PAPER, FILM AND INK ROSE SUBSTANTIALLY ALONG WITH, MARKET EXPECTATION REGARDING PRICE REDUCTION OF PRINTED PRODUCTS.' FROM THIS IT IS VERY CLEAR THAT THIS COMPANY IS INT O THE BUSINESS OF PRINTERS WHEREAS THE ASSESSEE-COMPANY IS INTO THE BUSINESS PROCESS OUTSOURCING. THEREFORE BY NO STRUC TURE OF IMAGINATION THESE TWO COMPANIES CAN BE CONSIDERED TO BE FUNCTIONALLY SIMILAR AND THEREFORE WE DIRECT THE AO I TPO TO EXCLUDE THIS COMPANY FROM THE LIST OF COMPARABLES. 9. THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH OF BANGALORE TRIBUNAL IN THE AFORE SAID CASE, WE DIRECT THE AO/TPO TO EXCLUDE THE UNIVERSAL PRINT SY STEM LTD FROM THE LIST OF COMPARABLES WITH REGARD TO THE ASSESSEE HEREIN. 8 ITA NO. 377/PUN/2017 A.Y.2012-13 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON 12 TH MARCH, 2019. SD/- SD/- R. S. SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL ME MBER / PUNE; / DATED : 12 TH MARCH, 2019. DKS !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEAL)-1, NASHIK. 4. THE PR. CIT-1, NASHIK. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE.