DCIT, New Delhi V. M/s. Chryscapital Investment Advisors (India) Pvt. Ltd., New Delhi

ITA 4287/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4608 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I2
• Next Hearing Date: 21-08-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 06-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VIKASH SRIVASTAVA
• Keywords: Related party transaction; Transfer pricing; International transaction; Retrospective amendment; Scheme of amalgamation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I-2 : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4294/DEL./2014 (ASSESSMENT YEAR : 2009-10) M/S. CHRYSCAPITAL INVESTMENT ADVISORS VS. DCIT, (INDIA) PRIVATE LIMITED, CIRCLE 3 (1), SUITE 101, THE OBEROI, NEW DELHI. DR. ZAKIR HUSSAIN MARG, NEW DELHI 110 003. (PAN : AABCC4609H) ITA NO.4287/DEL./2014 (ASSESSMENT YEAR : 2009-10) DCIT, VS. M/S. CHRYSCAPITAL INVESTMENT ADVISORS CIRCLE 3(1), (INDIA) PRIVATE LIMITED, NEW DELHI. SUITE 101, THE OBEROI, DR. ZAKIR HUSSAIN MARG, NEW DELHI 110 003. (PAN : AABCC4609H) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIKASH SRIVASTAVA, ADVOCATE REVENUE BY : SHRI H.K. CHOUDHARY, CIT DR DATE OF HEARING : 06.09.2017 DATE OF ORDER : 19.09.2017 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 2 SINCE BOTH THE AFORESAID APPEALS HAVE BEEN ARISEN O UT OF THE SAME ORDER IMPUGNED BY THE ASSESSEE AS WELL AS THE REVENUE, BOTH THE APPEALS ARE BEING DISPOSED OFF BY WAY OF CONSOL IDATED ORDER TO AVOID REPETITION OF DISCUSSION. 2. APPELLANT, M/S. CHRYSCAPITAL INVESTMENT ADVISORS (INDIA) PRIVATE LIMITED (HEREINAFTER REFERRED TO AS THE TA XPAYER), BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 30.05.2014 PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS)- XX, NEW DELHI, FOR THE ASSESSMENT YEARS 2009-10 ON THE GROUNDS INTER ALIA THAT :- 1. THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - XX, NEW DELHI ('LD. CIT(A)') UNDER SECTION 250 OF THE INCOME TAX ACT, 1961 ('THE ACT') IS BAD IN LAW AND ON FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT(A) / LD. AO / LD. TPO HAS ERRED IN ACCEPTING MOTILAL OSWAL INVESTMENT ADVISORS PRIVATE LIMITED AS A COMPARABLE TO THE APPELLANT. 3. THE LD. CIT(A) / LD. AO / LD. TPO HAVE ERRED IN RE-CHARACTERIZING THE DELAY IN RECEIVING THE ADV ISORY FEES BY THE APPELLANT AS DEEMED LOAN GIVEN BY IT TO ASSOCIATED ENTERPRISES AND MAKING AN ADJUSTMENT ON ACCOUNT OF INTEREST RECEIVABLE ON SUCH DELAYED RECEIPTS. 4. THE LD. CIT(A) / LD. AO / LD. TPO HAVE ERRED IN BENCHMARKING THE DELAY IN RECEIPT OF ADVISORY FE ES ON THE BASIS OF PRIME LENDING RATE ADOPTED BY STATE BANK OF INDIA. THE LD. AO/ TPO HAVE ERRED IN ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 3 APPLYING AN AD-HOC ADJUSTMENT OF 300 BASIS POINTS TOWARDS RISK PREMIUM ON PRIME LENDING RATE. 5. THE LD. CIT(A) / LD. AO / LD. TPO HAVE ERRED IN BENCHMARKING THE DELAY IN RECEIPT OF ADVISORY FE ES WITHOUT APPLYING ANY OF THE FIVE PRESCRIBED METHODS AS PER SECTION 92C(1) OF THE ACT AND TREATING THE METH OD APPLIED BY COMPARABLE UNCONTROLLED PRICE METHOD. 6. THE LD. CIT(A) / LD. AO HAS ERRED IN DISALLOWING THE BONUS AMOUNTING TO RS.21,636,500 PAID BY THE APPELLANT TO ITS EMPLOYEES (WHO ARE ALS O SHAREHOLDERS OF THE APPELLANT) U/S 36(1)(II) OF THE ACT BY HOLDING THAT THE SAME WOULD HAVE BEEN PAYABLE BY WAY OF DIVIDEND. THE LD. CIT(A) / LD. AO HAS IGNORE D THE FACT THAT THE RATIO OF BONUS PAID BY THE APPELL ANT IS DIFFERENT FROM THE RATIO OF THE SHAREHOLDING OF THE SHAREHOLDERS EMPLOYEE AND THUS, BONUS PAID CANNOT BE DISALLOWED U/ S 36(1)(II) OF THE ACT. 7. THE LD. CIT(A) / LD. AO / LD. TPO HAS ERRED IN LAW BY IGNORING SEVERAL JUDICIAL PRECEDENTS RELIED UPON BY THE APPELLANT INCLUDING FEW DECISIONS BY TH E JURISDICTIONAL BENCH OF INCOME TAX APPELLATE TRIBUNAL AND HIGH COURT. 8. THE ABOVE GROUNDS OF APPEALS ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. 9. THE APPELLANT CRAVES LEAVE TO ADD I WITHDRAW OR AMEND ANY GROUND OF APPEAL AT THE TIME OF HEARING. 3. APPELLANT, DEPUTY COMMISSIONER OF INCOME TAX, C IRCLE 3(1), NEW DELHI (HEREINAFTER REFERRED TO AS THE RE VENUE), BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE I MPUGNED ORDER DATED 30.05.2014 PASSED BY THE COMMISSIONER OF INCO ME-TAX ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 4 (APPEALS)-XX, NEW DELHI, FOR THE ASSESSMENT YEARS 2 009-10 ON THE GROUNDS INTER ALIA THAT :- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DIRECTING THE TPO TO EXCLUD E M/S KEYNOTE CORPORATE SERVICE LTD. AS COMPARABLE WHILE DETERMINING THE ARM'S LENGTH PRICE. 4. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : THE TAXPAYER CCIAPL IS INTO THE BUSINESS OF PROVIDING ADVISORY SERVICE TO CMC-III, CMC-IV AND CMC-V COLLECTIVELY CALLED AS CHRYSCAPITAL MANAGEMEN T COMPANY TO ASSIST THEM IN THEIR INVESTMENT DECISION. TAXPA YER IS CARRYING OUT RESEARCH WORK AND SCOUTING ACTIVITIES FOR ITS G ROUP COMPANIES TO IDENTIFY ENTREPRENEURS AND PORTFOLIO COMPANIES R EQUIRING ASSISTANCES IN THE FORM OF CAPITAL INCLUSION, STRAT EGIC DIRECTIONS AND FINANCIAL ADVICE. CHRYSCAPITAL MANAGEMENT COMPANY ARE ASSET MANAGEMENT COMPANIES FOR INVESTMENT FUNDS WHO GENER ALLY FOCUSED ON INVESTMENT IN INCUBATION VENTURES. THES E INVESTMENT FUNDS CONCENTRATE ON PROVIDING FUNDS TO ENTREPRENEU RS ENGAGED IN THE BUSINESS OF PROVIDING SOFTWARE SERVICES, OUTSOU RCING SERVICES AND TECHNOLOGY OUT OF INDIA. 5. THE TAXPAYER, DURING THE YEAR UNDER ASSESSMENT, ENTERED INTO INTERNATIONAL TRANSACTIONS AS UNDER :- ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 5 S.NO. DESCRIPTION OF TRANSACTION VALUE METHOD 1 ADVISORY SERVICES TO CMC-III 66096485 TNMM 2 ADVISORY SERVICES TO CMC-IV 198271750 TNMM 3 ADVISORY SERVICES TO CMC-V 396552766 TNMM 4 REIMBURSEMENT OF EXPENSES BY CMC-II 94886 NO SEPARATE ANALYSIS HAS BEEN DONE 5 REIMBURSEMENT OF EXPENSES BY CMC-III 1203148 NO SEPARATE ANALYSIS HAS BEEN DONE 6 REIMBURSEMENT OF EXPENSES BY CMC-IV 3971904 NO SEPARATE ANALYSIS HAS BEEN DONE 7 REIMBURSEMENT OF EXPENSES BY CMC-V 26861433 NO SEPARATE ANALYSIS HAS BEEN DONE 6. TAXPAYER IN ITS TRANSFER PRICING STUDY CHOSEN 5 COMPARABLES BY USING TRANSACTIONAL NET MARGIN METHOD (TNMM) AS THE MOST APPROPRIATE METHOD (MAM) FOR BENCHMARKING ITS INTER NATIONAL TRANSACTIONS HAVING MARGIN OF 4.21% AS AGAINST OPER ATING MARGIN OF THE TESTED PARTY VIZ. TAXPAYER AS 6.28% AND FOUN D ITS INTERNATIONAL TRANSACTIONS WITH ITS ASSOCIATED ENTE RPRISES (AE) AT ARMS LENGTH PRICE. 7. HOWEVER, LD. TPO REJECTED 3 COMPARABLES OUT OF 5 COMPARABLES TAKEN BY THE ASSESSEE AND INTRODUCED 5 NEW ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 6 COMPARABLES AND WORKED OUT ITS AVERAGE MARGIN AT 36 .37% AND PROPOSED AN ADJUSTMENT OF RS.64,31,754/- TO BRING T HE TRANSACTIONS AT ARMS LENGTH PRICE. 8. TAXPAYER CARRIED THE MATTER BY WAY OF FILING APP EAL BEFORE THE LD. CIT (A) WHO HAS PARTLY ALLOWED THE SAME. F EELING AGGRIEVED, TAXPAYER AS WELL AS REVENUE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF CHALLENGING THE IMPUGNED ORDER P ASSED BY LD. CIT (A) BY FILING AFORESAID CROSS APPEALS. 9. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. ASSESSEES APPEAL (ITA NO.4294/DEL/2014) GROUND NO.1 10. GROUND NO.1 IS GENERAL IN NATURE AND DOES NOT R EQUIRE ANY ADJUDICATION. GROUND NO.2 11. LD. AR FOR THE ASSESSEE IN ORDER TO COMPRESS HI S ARGUMENTS SOUGHT EXCLUSION OF ONLY ONE COMPARABLE OUT OF SEVE N COMPARABLES TAKEN BY THE TPO AND RETAINED BY LD. CIT (A) VIZ. MOTILAL OSWAL ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 7 INVESTMENT ADVISORS PVT. LIMITED HAVING MARGIN OF 74.48%. THE LD. AR FOR THE ASSESSEE TO SUPPORT HIS ARGUMENTS CO NTENDED INTER ALIA THAT MOTILAL OSWAL INVESTMENT ADVISORS PVT. LI MITED IS NOT A SUITABLE COMPARABLE ON THE GROUNDS INTER ALIA THAT IT HAS ENDED INTO SUBSTANTIAL RELATED PARTY TRANSACTIONS (RPT) TO THE TUNE OF 36.74%; THAT IN ORDER TO DETERMINE SUBSTANTIAL RPT SALES SHOULD BE COMPARED WITH SALES AND EXPENSES WHEREAS TPO WHILE CALCULATING PERCENTAGE OF RPT USED SALES AS WELL AS EXPENDITURE COLLECTIVELY AS A PERCENT OF SALE AND RELIED UPON M/S. AMERICAN EXPRESS (INDIA) PRIVATE LIMITED VS. DCIT 2012-TII-75-ITAT-DEL-TP AND SUNGARD SOLUTIONS (INDIA) (P.) LTD. VS. DDIT (201 4) 51 TAXMANN.COM 339 (PUNE TRIB.) . 12. TPO IN ORDER TO SELECT A SUITABLE COMPARABLE AD OPTED FILTERS / CRITERIA AS UNDER :- COMPANIES WHOSE DATA IS NOT AVAILABLE FOR THE FY 2008-09 ARE EXCLUDED. COMPANIES WHOSE SALES < RS.5CR. ARE EXCLUDED. COMPANIES WHOSE REVENUE FROM SERVICES IS LESS THAN 75% OF THE TOTAL OPERATING REVENUES ARE EXCLUDED. COMPANIES HAVING MORE THAN 25% RELATED PARTY TRANSACTIONS (SALES AS WELL AS EXPENDITURE COMBINED) OF THE SALES ARE EXCLUDED. COMPANIES WHO HAVE DIMINISHING REVENUES/PERSISTENT LOSSES FOR THE LAST THREE YEARS UP TO AND INCLUDING FY 2008-09 ARE EXCLUDED. ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 8 COMPANIES HAVING DIFFERENT FINANCIAL YEAR ENDING (I.E. NOT MARCH 31, 2009) OR DATA OF THE COMPANY DOES NOT FALL WITHIN 12 MONTH PERIOD I.E. 01.04.2008 TO 31.03.2009 ARE REJECTED. COMPANIES THAT ARE FUNCTIONALLY DIFFERENT FORM THE TAXPAYER ARE EXCLUDED. COMPANIES THAT ARE HAVING PECULIAR ECONOMIC CIRCUMSTANCES ARE EXCLUDED. 13. WHEN WE EXAMINE BULLET POINT NO.4 REPRODUCED AB OVE, THE TPO HAS HIMSELF ADOPTED THE FILTER TO EXCLUDE COMPA NIES HAVING MORE THAN 25% RELATED PARTY TRANSACTIONS (SALES AS WELL AS EXPENDITURE COMBINED) OF THE SALES. WHEN WE APPLY THIS FILTER TO MOTILAL OSWAL INVESTMENT ADVISORS PVT. LIMITED SELE CTED AS A COMPARABLE BY THE TPO WHICH HAS TRANSACTION OF 36.7 4% OF THE TOTAL EXPENSES INCURRED WITH RELATED PARTIES. THE TPO WHILE BENCHMARKING THE INTERNATIONAL TRANSACTIONS CHANGED THE DENOMINATOR WHILE EXAMINING THE RELATED PARTY TRANS ACTIONS. 14. IDENTICAL ISSUE HAS COME UP BEFORE THE COORDINA TE BENCH OF THE TRIBUNAL IN CASE CITED AS SUNGARD SOLUTIONS (INDIA) (P.) LTD. VS. DDIT (INTERNATIONAL TAXATION-I) (2014) 51 TAX MANN.COM 339 (PUNE TRIB.) WHICH WAS DECIDED IN FAVOUR OF THE ASSESSEE AND OPERATIVE PART THEREOF IS REPRODUCED AS UNDER : - 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS ON THIS ASPECT AND WE ARE UNABLE TO UPH OLD THE STAND OF THE REVENUE. THE DISCUSSION MADE BY THE ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 9 TPO IN PARA 6.5.2 OF HIS ORDER ON THE IMPUGNED ISSU E SHOWS THAT HE HAS CONSIDERED A FILTER 25% OF THE RP TS FOR THE PURPOSE OF EXCLUDING A CONCERN FROM THE LIS T OF COMPARABLES. WHILE APPLYING THE SAID FILTER IN THE CASE OF COMPUCON SOFTWARE LTD. HE HAS AGGREGATED THE RECEIPTS FOR SERVICES RENDERED AND THE PAYMENTS MAD E FOR SERVICES RECEIVED AND THEREAFTER HE HAS DIVIDED THE TOTAL FIGURE BY THE TOTAL TURNOVER OF THE ASSESSEE. QUITE CLEARLY, THE NUMERATOR CONSIDERED BY THE TPO COMPRISES OF RECEIPTS FOR SERVICES RENDERED AS ALSO THE PAYMENTS MADE FOR SERVICES RECEIVED MEANING THEREBY THAT SALES AS WELL AS EXPENSES HAVING A COMPONENT O F RPTS ARE INCLUDED, WHEREAS THE DENOMINATOR COMPRISED OF ONLY THE SALES COMPONENT. OSTENSIBLY, THE AFORESAID FORMULA WOULD GIVE A DISTORTED PICTURE OF THE RATIO OF RPTS TO THE TOTAL TRANSACTIONS. IF TOTAL EXPENSES INCURRED BY THE ASSESSEE BY WAY OF PAYMENT S TO ASSOCIATED ENTERPRISES IS DIVIDED BY THE TOTAL EXPENSES INCURRED, THE RATIO OF RPTS TO THE TOTAL TRANSACTIONS EXCEED 25%, AS PER THE WORKING MADE BY THE ASSESSEE. IN VIEW OF THE AFORESAID INCORRECT APPROACH OF THE TPO IN ORDER TO CALCULATE THE LEVEL OF RPTS, COMPUCON SOFTWARE LTD. HAS BEEN WRONGLY INCLUDED AS A COMPARABLE. MOREOVER, THE ASSESSEE HA S ALSO REFERRED TO A DECISION OF THE PUNE BENCH OF TH E TRIBUNAL IN THE CASE OF BINDVIEW INDIA (P) LID. V. DY. C IT ['013] 34 TAXMANN.COM 164/145 ITO 436 RELATING TO THE ASSESSMENT YEAR 2006-07 WHEREIN THE RPTS IN THE CASE OF COMPUCON SOFTWARE LTD. HAVE BEEN ACCEPTED AS BEING IN EXCESS OF 25% OF THE TOTAL TRANSACTIONS. ON THIS BASIS ALSO, WE FIND THAT THE PLEA OF THE ASSESSEE TO EXCLUDE COMPUCON SOFTWARE LTD. FROM THE LIST OF COM PARABLES HAS BEEN WRONGLY NEGATED BY THE LOWER AUTHORITIES. WE ORDER ACCORDINGLY AND ASSESSEE SUCCEEDS ON THIS ASPECT. 15. FOLLOWING THE DECISION RENDERED BY THE COORDINA TE BENCH OF THE TRIBUNAL IN CASE SUNGARD SOLUTIONS (INDIA) (P.) LTD. (SUPRA) AND THE FACT THAT WHEN THE TPO HAS HIMSELF ADOPTED THE FILTER OF ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 10 25% OF RPT FOR THE PURPOSE OF EXCLUDING A COMPANY F ROM THE LIST OF COMPARABLES, HE CANNOT ARRIVE AT A LOGICAL COMPU TATION FOR BENCHMARKING THE INTERNATIONAL TRANSACTION BY SELEC TING A COMPARABLE HAVING 36.74% OF ITS TOTAL EXPENSES WITH RELATED PARTIES. SO, WE ARE OF THE CONSIDERED VIEW THAT MO TILAL OSWAL INVESTMENT ADVISORS PVT. LIMITED IS NOT A SUITABLE COMPARABLE, HENCE ORDERED TO BE EXCLUDED. GROUNDS NO.3, 4 & 5 16. TPO HAS RECHARACTERISED THE DELAY IN RECEIVING THE ADVISORY FEE BY THE TAXPAYER AS LOAN GIVEN BY IT TO ITS AE A ND MADE AN ADJUSTMENT OF RS.11,28,585/- ON ACCOUNT OF INTERES T RECEIVABLE ON SUCH DELAYED RECEIPTS. LD. CIT (A) BY APPLYING THE DECISION RENDERED BY THE TRIBUNAL IN CASE OF CHEIL INDIA PRIVATE LIMITED VS. DCIT IN ITA NO.1230/DEL/2014 FOR AY 2009-10 UPHELD THE ADDITION MADE BY THE AO AND ALSO ON THE GROUND THAT THE ASSESSEE WAS ENTITLED TO RECEIVE THE ADVISORY FEES IN ADVANC E FROM ITS AE. 17. HOWEVER, THE LD. AR FOR THE ASSESSEE CHALLENGIN G THE IMPUGNED ORDER CONTENDED THAT THE AO/CIT (A) HAVE M ADE INCORRECT RECHARACTERISATION OF THE TRANSACTION AND RELIED UPON IN CASES OF SONY INDIA PVT. LTD. VS. DCIT 2008-TIOL-439-ITAT- ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 11 DEL, CIT VS. EKL APPLIANCES (2012) 345 ITR 241 (D ELHI) AND NIMBUS COMMUNICATIONS LTD. VS. ACIT ITA NO.6597/M UM/09 . 18. UNDISPUTEDLY, THERE IS 4 5 DAYS DELAY IN RECE IVING THE AMOUNTS. IT IS ALSO NOT IN DISPUTE THAT IN MOST OF THE CASES, ADVANCE FEE HAS BEEN TAKEN BY THE TAXPAYER AS PER AGREEMENT AND AN AMOUNT OF RS.1.13 LAKHS WAS DELAYED. 19. AO MADE AN ADJUSTMENT QUA THE DELAYED RECEIPT O F ADVISORY FEES ON THE BASIS OF PRIME LENDING RATE ADOPTED BY STATE BANK OF INDIA BY APPLYING AN AD HOC ADJUSTMENT OF 300 BASIS POINT TOWARDS RISK FROM TIME TO TIME ON PLR. THE LD. AR FOR THE ASSESSEE TO CUT SHORT HIS ARGUMENTS CONTENDED THAT IN THESE CIRCUMS TANCES, LIBOR IS APPLICABLE INSTEAD OF PLR. 20. ISSUE AS TO WHETHER LIBOR OR PLR RATE ARE APPLI CABLE IN SUCH CASES WAS DECIDED BY THE HONBLE HIGH COURT IN CASE CITED AS CIT-I VS. COTTON NATURAL (I) (P.) LTD. (2015) 55 TAXMANN.COM 523 (DELHI) BY RETURNING FOLLOWING FINDINGS :- 39. THE QUESTION WHETHER THE INTEREST RATE PREVAILING IN INDIA SHOULD BE APPLIED, FOR THE LEND ER WAS AN INDIAN COMPANY/ASSESSEE, OR THE LENDING RATE PREVALENT IN THE UNITED STATES SHOULD BE APPLIED, F OR THE BORROWER WAS A RESIDENT AND AN ASSESSEE OF THE SAID COUNTRY, IN OUR CONSIDERED OPINION, MUST BE ANSWERED BY ADOPTING AND APPLYING A COMMONSENSICAL AND PRAGMATIC REASONING. WE HAVE NO HESITATION IN HOLDING THAT THE INTEREST RATE SHO ULD BE THE MARKET DETERMINED INTEREST RATE APPLICABLE T O ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 12 THE CURRENCY CONCERNED IN WHICH THE LOAN HAS TO BE REPAID. INTEREST RATES SHOULD NOT BE COMPUTED ON TH E BASIS OF INTEREST PAYABLE ON THE CURRENCY OR LEGAL TENDER OF THE PLACE OR THE COUNTRY OF RESIDENCE OF EITHER PARTY. INTEREST RATES APPLICABLE TO LOANS AN D DEPOSITS IN THE NATIONAL CURRENCY OF THE BORROWER O R THE LENDER WOULD VARY AND ARE DEPENDENT UPON THE FISCAL POLICY OF THE CENTRAL BANK, MANDATE OF THE GOVERNMENT AND SEVERAL OTHER PARAMETERS. INTEREST RATES PAYABLE ON CURRENCY SPECIFIC LOANS/ DEPOSITS ARE SIGNIFICANTLY UNIVERSAL AND GLOBALLY APPLICABLE . THE CURRENCY IN WHICH THE LOAN IS TO BE RE-PAID NORMALLY DETERMINES THE RATE OF RETURN ON THE MONEY LENT, I.E. THE RATE OF INTEREST. KLAUS VOGEL ON DOU BLE TAXATION CONVENTIONS (THIRD EDITION) UNDER ARTICLE 11 IN PARAGRAPH 115 STATES AS UNDER:- THE EXISTING DIFFERENCES IN THE LEVELS OF INTEREST RATES DO NOT DEPEND ON ANY PLACE BUT RATHER ON THE CURRENCY CONCERNED. THE RATE OF INTEREST ON A US $ LOAN IS THE SAME IN NEW YORK AS IN FRANKFURT-AT LEAST WITHIN THE FRAMEWORK OF FREE CAPITAL MARKETS (SUBJECT TO THE ARBITRAGE). IN REGARD TO THE QUESTION AS TO WHETHER THE LEVEL OF INTEREST RATES IN THE LENDERS STATE OR THAT IN THE BORROWERS IS DECISIVE, THEREFORE, PRIMARILY DEPENDS ON THE CURRENCY AGREED UPON (BFH BST.B1. II 725 (1994), RE. 1 ASTG). A DIFFERENTIATION BETWEEN DEBT-CLAIMS OR DEBTS IN NATIONAL CURRENCY AND THOSE IN FOREIGN CURRENCY IS NORMALLY NO USE, BECAUSE, FOR INSTANCE, A US $ LOAN ADVANCED BY A US LENDER IS TO HIM A DEBT- CLAIM IN NATIONAL CURRENCY WHEREAS TO A GERMAN BORROWER IT IS A FOREIGN CURRENCY DEBT (THE SITUATION BEING DIFFERENT, HOWEVER, WHEN AN AGREEMENT IN A THIRD CURRENCY IS INVOLVED). MOREOVER, A DIFFERENCE IN INTEREST LEVELS FREQUENTLY REFLECTS NO MORE THAN DIFFERENT EXPECTATIONS IN REGARD TO RATES OF EXCHANGE, RATES OF INFLATION AND OTHER ASPECTS. HENCE, THE CHOICE OF ONE PARTICULAR CURRENCY CAN BE JUST ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 13 AS REASONABLE AS THAT OF ANOTHER, DESPITE DIFFERENT LEVELS OF INTEREST RATES. AN ECONOMIC CRITERION FOR ONE PARTY MAY BE THAT IT WANTS, IF POSSIBLE, TO AVOID EXCHANGE RISKS (FOR EXAMPLE, BY MATCHING THE CURRENCY OF THE LOAN WITH THAT OF THE FUNDS ANTICIPATED TO BE AVAILABLE FOR DEBT SERVICE), SUCH AS TAKING OUT A US $ LOAN IF THE PROCEEDS IN US $ ARE EXPECTED TO BECOME AVAILABLE (SAY FROM EXPORTS). IF AN EXCHANGE RISK WERE TO PROVE INCAPABLE OF BEING AVOIDED (SAY, BY FORWARD RATE FIXING), THE APPROPRIATE COURSE WOULD BE TO ATTRIBUTE IT TO THE ECONOMICALLY MORE POWERFUL PARTY. BUT, EXACTLY WHERE THERE IS NO SPECIAL RELATIONSHIP, THIS WILL FREQUENTLY NOT BE POSSIBLE IN DEALINGS WITH SUCH PARTY. CONSEQUENTLY, IT WILL NORMALLY NOT BE POSSIBLE TO REVIEW AND ADJUST THE INTEREST RATE TO THE EXTENT THAT SUCH RATE DEPENDS ON THE CURRENCY INVOLVED. MOREOVER, IT IS QUESTIONABLE WHETHER SUCH AN ADJUSTMENT COULD BE BASED ON ART. 11(6). FOR ART. 11(6), AT LEAST ITS WORDING, ALLOWS THE AUTHORITIES TO ELIMINATE HYPOTHETICALLY THE SPECIAL RELATIONSHIPS ONLY IN REGARD TO THE LEVEL OF INTEREST RATES AND NOT IN REGARD TO OTHER CIRCUMSTANCES, SUCH AS THE CHOICE OF CURRENCY. IF SUCH OTHER CIRCUMSTANCES WERE TO BE INCLUDED IN THE REVIEW, THERE WOULD BE DOUBTS AS TO WHERE THE LINE SHOULD BE DRAWN, I.E., WHETHER AN EXAMINATION SHOULD BE ALLOWED OF THE QUESTION OF WHETHER IN THE ABSENCE OF A SPECIAL RELATIONSHIP (I.E., FINANCIAL POWER, STRONG POSITION IN THE MARKET, ETC., OF THE FOREIGN CORPORATE GROUP MEMBER) THE BORROWING COMPANY MIGHT NOT HAVE COMPLETELY REFRAINED FROM MAKING INVESTMENT FOR WHICH IT BORROWED THE MONEY. 40. THE AFORESAID METHODOLOGY RECOMMENDED BY KLAUS VOGEL APPEALS TO US AND APPEARS TO BE THE REASONABLE AND PROPER PARAMETER TO DECIDE UPON THE QUESTION OF APPLICABILITY OF INTEREST RATE. THE LOA N IN ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 14 QUESTION WAS GIVEN IN FOREIGN CURRENCY I.E. US $ AN D WAS ALSO TO BE REPAID IN THE SAME CURRENCY I.E. US $. INTEREST RATE APPLICABLE TO LOANS GRANTED AND TO BE RETURNED IN INDIAN RUPEES WOULD NOT BE THE RELEVANT COMPARABLE. EVEN IN INDIA, INTEREST RATES ON FCNR ACCOUNTS MAINTAINED IN FOREIGN CURRENCY ARE DIFFERENT AND DEPENDENT UPON THE CURRENCY IN QUESTION. THEY ARE NOT DEPENDENT UPON THE PLR RATE, WHICH IS APPLICABLE TO LOANS IN INDIAN RUPEE. THE PLR RATE, THEREFORE, WOULD NOT BE APPLICABLE AND SHOULD NOT BE APPLIED FOR DETERMINING THE INTEREST RATE IN THE EXTANT CASE. PLR RATES ARE NOT APPLICAB LE TO LOANS TO BE RE-PAID IN FOREIGN CURRENCY. THE INTEREST RATES VARY AND ARE THUS DEPENDENT ON THE FOREIGN CURRENCY IN WHICH THE REPAYMENT IS TO BE MADE. THE SAME PRINCIPLE SHOULD APPLY. 21. RATIO OF THE JUDGMENT CIT-I VS. COTTON NATURAL (I) (P.) LTD. (SUPRA) THAT PLR RATE AS APPLIED BY TPO/CIT (A) ARE NOT APPLICABLE FOR DETERMINING INTEREST RATE RATHER LIB OR SHOULD BE APPLIED TO COMPUTE THE INTEREST ON THE DELAYED PAYM ENT OF RS.1.13 LAKHS. SO, IN THESE CIRCUMSTANCES, GROUNDS NO.3, 4 & 5 A RE DETERMINED IN FAVOUR OF THE ASSESSEE. GROUND NO.6 22. AO DISALLOWED AN AMOUNT OF RS.2,16,36,500/- PAI D ON ACCOUNT OF BONUS BY THE TAXPAYER TO ITS MANAGING DI RECTOR AND DIRECTOR, NAMELY, SHRI ASHISH DHAWAN AND SHRI KUNAL SHROFF RESPECTIVELY WHO WERE ALSO SHAREHOLDER OF THE ASSES SEE IN THE RATIO OF 2 : 1 U/S 36(1)(II) OF THE ACT. ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 15 23. HOWEVER, THE COORDINATE BENCH OF THE TRIBUNAL I N ASSESSEES OWN CASE FOR AY 2006-07 (SUPRA) DECIDED THE IDENTIC AL ISSUE AS TO MAKING PAYMENT OF BONUS TO SHRI ASHISH DHAWAN AND S HRI KUNAL SHROFF AFORESAID IN FAVOUR OF THE ASSESSEE BY FOLLO WING DECISION OF HONBLE DELHI HIGH COURT IN ITA 417/2004 DATED 27.0 4.2015. 24. FOR READY PERUSAL, FINDINGS RETURNED BY THE COO RDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2006- 07 (SUPRA) ARE REPRODUCED AS UNDER :- 41. NOW, WE COME TO THE GROUNDS RELATING TO CORPOR ATE ISSUES. THE ASSESSEE HAS PRIMARILY PRESSED GROUND N OS. 10 AND 11 IN THIS REGARD. BRIEF FACTS OF THE CASE QUA GROUND NO.10 ARE THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE COMPANY HAD PAID SALARY AND OTHER ALLOWANC ES TO ITS DIRECTORS. THE PAYMENT ALSO INCLUDED BONUS TO I TS MANAGING DIRECTOR AND DIRECTORS NAMELY SRI. ASHISH DHAWAN AND SRI. KUNAL SHROFF AT RS.1,89,75,000/- AN D 1,06,18,000/- WHO ARE ALSO MAJOR SHAREHOLDERS IN TH E COMPANY WITH 50% SHAREHOLDING OF EACH. ASSESSING OFFICER OBSERVED THAT AS PER THE PROVISION OF SECTI ON 36(I)(II) BONUS AND/OR COMMISSION PAID TO AN EMPLOY EE IS ALLOWABLE AS DEDUCTION, IF AND ONLY IF, IT IS NOT P AYABLE AS PROFIT OR DIVIDEND. ASSESSING OFFICER POINTED OUT THAT IN THE CASE OF ASSESSEE COMPANY, PROFIT OF RS.5,06,14, 970/- HAD BEEN DECLARED, HOWEVER, NO DIVIDEND HAD BEEN PROPOSED OR DISTRIBUTED AMONG THE SHAREHOLDERS WHIC H ALSO INCLUDED THE DIRECTORS OF THE COMPANY. THUS, H E CONCLUDED THAT IN CASE OF DIRECTORS OF THE COMPANY, THE SUM PAID AS COMMISSION AND BONUS COULD HAVE BEEN PA ID AS PROFIT OR DIVIDEND WHICH IS NOT THE CASE HERE. A FTER CONSIDERING THE ASSESSEES DETAILED REPLY HE MADE A N ADDITION OF RS. 2,95,93,000/-. AT THE TIME OF HEARI NG, LD. COUNSEL POINTED OUT THAT THIS ISSUE IS COVERED IN F AVOUR OF ASSESSEE BY THE DECISION OF HONBLE DELHI HIGH COUR T IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008-09 . HAVING HEARD BOTH THE PARTIES, WE FIND THAT HONBLE DELHI ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 16 HIGH COURT VIDE ITA NO.417/2014 DATED 27 TH APRIL, 2015, HAS OBSERVED AS UNDER: THE FINAL QUESTION THAT ARISES FOR THIS COURTS DETERMINATION IN THE PRESENT APPEAL IS THE ASSESSEE S CLAIM FOR DEDUCTION UNDER SECTION 36(1)(II) OF THE ACT IN RESPECT OF THE BONUS PAID BY IT TO ITS TWO SHAREHOLDERS - A SHISH DHAWAN AND KUNAL SHROFF. THE LOWER AUTHORITIES DENI ED SUCH CLAIM, HOLDING THAT THE BONUS WAS PAID TO THE SHAREHOLDERS IN LIEU OF DIVIDEND WITH THE OBJECTIVE OF AVOIDING TAX. SUCH INFERENCE WAS DRAWN FROM TWO FAC TS: A) THE BONUS PAID WAS IN PROPORTION OF THEIR SHAREHOLD ING IN THE ASSESSEE COMPANY, I.E. 2:1; AND B) NO DIVIDEND HAD BEEN DECLARED BY THE ASSESSEE. HOWEVER, A PERUSAL O F AN EXCERPT FROM THE DRP S ORDER DATED 21.09.2012 QUOTED BY THE AO IN HIS ORDER DATED 19.10.2012 CONTRADICTS BO TH THESE FACTS: A) BONUS WAS NOT PAID IN THE RATIO OF 2:1 AND B) THE ASSESSEE HAD DECLARED INTERIM DIVIDEND ITA 417/2014 PAGE 52 OF ` 5,47,47,000/-. FURTHER, THE B ONUSES PAID TO THE TWO SHAREHOLDER-DIRECTORS IN THE PRECED ING TWO FINANCIAL YEARS WERE IN THE RATIO OF 60-65%:40-35%, EVEN THOUGH THEIR SHAREHOLDING WAS 1:1. THE BALANCE SHEE T OF THE ASSESSEE PLACED ON RECORD ALSO INDICATES THAT T HE TWO SHAREHOLDERS ALSO HOLD DIRECTORIAL POSITIONS IN THE ASSESSEE. THEREFORE, THE ASSESSEES CONTENTION THAT THE BONUS WAS PAID TO THE SHAREHOLDERS IN THEIR MANAGER IAL CAPACITY, LIKE IN THE CASE OF OTHER MANAGERS, CANNO T BE QUESTIONED MERELY ON THE BASIS OF A SPECULATION BY THE REVENUE THAT SUCH PAYMENT WAS TO AVOID TAX. IN SUCH CIRCUMSTANCES, THE DEDUCTION UNDER SECTION 36(1)(II ) IN RESPECT OF PAYMENT OF BONUS TO THE TWO SHAREHOLDER- DIRECTORS IS ALLOWED. THE ASSESSEE HAS RELIED UPON A NUMBER OF JUDICIAL PRONOUNCEMENTS TO SUPPORT ITS CONTENTION. HOWEVER, WE DO NOT CONSIDER IT NECESSAR Y TO DISCUSS THOSE DECISIONS FOR RULING IN ITS FAVOUR. T HEREFORE, THIS QUESTION IS ANSWERED IN FAVOUR OF THE ASSESSEE . 42. RESPECTFULLY FOLLOWING AFOREMENTIONED DECISION, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 25. FOLLOWING THE AFORESAID DECISION RENDERED BY CO ORDINATE BENCH OF THE TRIBUNAL WHICH IS BASED ON THE HONBL E HIGH COURT JUDGMENT, WE ARE OF THE CONSIDERED VIEW THAT THE DE DUCTION U/S ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 17 36(1)(II) IN RESPECT OF PAYMENT OF BONUS TO THE AFO RESAID SHAREHOLDER/DIRECTOR WHO ARE ALSO MAJOR SHAREHOLDER IN THE COMPANY WITH 50% SHAREHOLDING OF EACH IS ALLOWABLE DEDUCTION AS THERE IS NO CHANGE IN THE SHAREHOLDING PATTERN DURI NG THE YEAR UNDER ASSESSMENT, HENCE GROUND NO.6 IS DETERMINED IN FAVO UR OF THE ASSESSEE. GROUNDS NO.7 & 8 26. GROUNDS NO.7 & 8 ARE GENERAL IN NATURE AND DO N OT REQUIRE ANY SPECIFIC ADJUDICATION. REVENUES APPEAL (ITA NO.4287/DEL/2014) : 27. THE REVENUE BY FILING THE PRESENT APPEAL HAS SO UGHT INCLUSION OF M/S. KEYNOTE CORPORATE SERVICES LTD. A S A SUITABLE COMPARABLE BY CHALLENGING THE FINDINGS OF LD. CIT ( A) WHO HAS EXCLUDED THIS COMPANY AS COMPARABLE FOR BENCHMARKIN G THE INTERNATIONAL TRANSACTION. 28. M/S. KEYNOTE CORPORATE SERVICES LTD. IS SELECTE D BY LD. TPO AS A SUITABLE COMPARABLE HAVING MARGIN OF 139.00%. THE LD. CIT (A) BY TAKING INTO ACCOUNT VOLATILE PROFIT OF THE C OMPANY TO THE TUNE OF 145% DUE TO THE ALLIANCES FORMED WITH A MID DLE EAST BASED CONSULTING COMPANIES AND SWISS BASED CONSULTING COM PANIES AND HAS ALSO LAUNCHED ESOP DIVISION WHICH FOCUSED ON DE SIGNING AND ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 18 IMPLEMENTING STOCK OPTION SCHEMES FOR CORPORATE. L D. CIT (A) ALSO RELIED UPON THE DECISION RENDERED BY DRP IN AS SESSEES OWN CASE FOR AY 2006-07 WHEREIN M/S. KEYNOTE CORPORATE SERVICES LTD. IS HELD TO BE NOT A ROBUST COMPARABLE. 29. LD. DR FOR THE REVENUE CHALLENGING THE IMPUGNED ORDER CONTENDED THAT THE CIT (A) HAS NOT GIVEN PROPER FIN DINGS ON THIS ISSUE. HOWEVER, THIS CONTENTION OF LD. DR IS NOT S USTAINABLE BECAUSE THE LD. CIT (A) HAS RETURNED COMPREHENSIVE FINDINGS THAT PROFIT OF M/S. KEYNOTE CORPORATE SERVICES LTD. IS E XTREMELY VOLATILE AND ABNORMAL AND ALSO NOT FUNCTIONALLY COM PARABLE TO THE ASSESSEE. CIT (A) ALSO RELIED UPON DRP DIRECTIONS GIVEN IN ASSESSEES OWN CASE FOR AY 2006-07 WHEREIN M/S. KEY NOTE CORPORATE SERVICES LTD. WAS FOUND TO BE NOT A SUITA BLE COMPARABLE. 30. WHEN WE SEE THE OPERATING MARGIN OF M/S. KEYNOT E CORPORATE SERVICES LTD. FOR THE LAST FOUR YEARS, IT IS EXTREMELY VOLATILE AND ABNORMAL. FOR READY PERUSAL, OPERATIN G MARGIN FOR THE LAST FOUR YEARS IS REPRODUCED AS UNDER :- ASSESSMEN T YEAR OPERATING MARGIN 2005 - 06 19.38% 2006 - 07 94.06% 2007 - 08 145.83% 2008 - 09 191.58% 2009 - 10 72.43% ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 19 31. UNDISPUTEDLY, BUSINESS MODEL OF M/S. KEYNOTE CO RPORATE SERVICES LTD. WAS RESTRUCTURED DURING THE YEAR ENDI NG 31.03.2007 WHICH IS REPRODUCED FROM PAGE 8 OF THE ANNUAL REPOR T OF 2006-07 FOR READY REFERENCE AS UNDER :- BUSINESS RESTRUCTURING DURING THE YEAR ENDED 31 ST MARCH, 2007, THE SCHEME OF AMALGAMATION OF GROUP COMPANIES VIZ COBAL INVESTMEN T COMPANY LIMITED, WEST COAST LIGHTERAGE COMPANY PRIVATE LIMITED, STARLINE ISPAT AND ALLOYS LIMITED, GALAXY LEASING LIMITED, KEYNOTE FINSTOCK LIMITED, PLETHORA INVESTMENTS COMPANY LIMITED (THE TRANSFEROR COMPANIES') WITH KEYNOTE CORPORATE SERVICES LIMITED (''THE TRANSFEREE COMPANY') HAVE BEEN APPROVED BY HON'BLE HIGH COURTS, AT ALLAHABAD, BOMBAY AND GUWAHATI VIDE THEIR ORDERS DATED 21 ST DECEMBER, 2006, 9 TH MARCH 2007 AND 19 TH MARCH, 2007 RESPECTIVELY AND EFFECTED. DURING THIS FINANCIAL YEAR, IN TERMS OF T HE SCHEME OF AMALGAMATION 77,170 NEW EQUITY SHARES WER E ISSUED TO THE SHAREHOLDERS OF TRANSFEROR COMPANIES AND 14,51,702 EQUITY SHARES HAVE BEEN TRANSFERRED TO 'KEYNOTE TRUST.' ALL THE RELEVANT FORMALITIES/PROCE DURES RELATING TO THE SAID ORDERS HAVE BEEN COMPLETED. 16. PURSUANT TO THE SCHEME OF AMALGAMATION BETWEEN COBAL INVESTMENT COMPANY LIMITED, WEST COAST LIGHTERAGE COMPANY PRIVATE LIMITED, STARLINE ISPAT AND ALLOYS LIMITED. GALAXY LEASING LIMITED, KEYNOTE FIN STOCK LIMITED AND PLETHORA INVESTMENTS COMPANY LIMITED (HEREINAFTER KNOWN AS TRANSFEROR COMPANIES) AND KEY NOTE CORPORATE SERVICES LIMITED (HEREINAFTER KNOWN AS TRANSFEREE COMPANY) APPROVED BY SHAREHOLDERS AND TH EN APPROVED BY THE HONORABLE HIGH COURT OF ALLAHABAD, BOMBAY, GUWAHALI VIDE THEIR ORDERS DATED 21 ST DECEMBER, 2006, 9 TH MARCH, 2007 & 19 TH MARCH, 2007 RESPECTIVELY. THE ASSETS AND LIABILITIES OF THE TRANSFEROR COMPAN IES ARE VESTED IN THE TRANSFEREE COMPANY WITH RETROSPECTIVE EFFECT FROM 1 ST APRIL, 2005, THE APPOINTED DATE UNDER THE SCHEME. THE ACCOUNTS OF THE TRANSFEREE COMPANY FOR THE PERI OD ENDED 31 ST MARCH, 2007 ARE DRAWN UP TO GIVE EFFECT TO THE SCHEME. ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 20 32. LD. DR FOR THE REVENUE CONTENDED THAT ISSUE OF AMALGAMATION HAS NOT BEEN CONSIDERED BY THE LD. CIT (A). ONLY THE SHAREHOLDING PATTERN OF M/S. KEYNOTE CORPORATE SERVICES LTD. IS CHANGED WITH AMALGAMATION WHICH HAS NOT AFFECTED THE PROFIT. HOWEVER, THIS CONTENTION IS NOT TENABLE IN THE FACE OF UNCONTROVERTED FACT THAT THE PROFIT MARGIN OF ASSES SEE COMPANY HAS RAISED UP TO 145% DURING THE YEAR UNDER ASSESSMENT WHICH IS EXTREMELY VOLATILE AND ABNORMAL AND IS DUE TO THE A MALGAMATION AND MERGER. MOREOVER, LAUNCH OF ESOP DIVISION WHIC H FOCUSED ON DESIGNING AND IMPLEMENTING STOCK OPTION SCHEME F OR CORPORATE, THE BUSINESS MODEL OF COMPARABLE COMPANY HAS UNDERG ONE A CHANGE. SO, WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT (A) HAS RIGHTLY EXCLUDED M/S. KEYNOTE CORPORATE SERVICES LT D. AS UNSUITABLE COMPARABLE. 32. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS ALLO WED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 19 TH DAY OF SEPTEMBER, 2017. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 19 TH DAY OF SEPTEMBER, 2017 TS ITA NO.4294/DEL./2014 ITA NO.4287/DEL./2014 21 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A) 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.