Element K India Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 431/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82143 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 01-10-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 27-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PEEYUSH JAIN
• Assessee Lawyers: ASHWANI TANEJA; RAHUL KHARE S
• Keywords: Related party transaction; Business income; Depreciation; Transfer pricing; Principle of natural justice; International transaction; Wholly owned subsidiary; Bad and doubtful debts
• Section: 92D; 115JB; 133(6); 28; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I : NEW DELHI) BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER ITA NO.431/DEL./2012 (ASSESSMENT YEAR : 2007-08) ELEMENT K INDIA PRIVATE LTD., VS. ITO, WARD 11 (1 ), C 72, BASEMENT FLOOR, NEW DELHI. SOUTH EXTENSION, NEW DELHI 110 049. (PAN : AAACE9836D) (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI ASHWANI TANEJA & RAHUL KHARE, ADVOCATES REVENUE BY : SHRI PEEYUSH JAIN, CIT DR O R D E R PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE AS SESSING OFFICERS ORDER U/S 143 (3) READ WITH SECTION 144C OF THE INC OME-TAX ACT, 1961. THE RETURN OF INCOME FILED ON 30.10.2007 DECLARING INCOME OF RS.15,550/- AND PAID TAXES U/S 115JB OF THE ACT. R ETURN WAS REVISED ON 13.11.2007. ASSESSEE IS AN IT SERVICE PROVIDER TO ITS PARENT COMPANY EK, USA. ASSESSEE PROVIDES DESIGN AND DEVELOPMENT SUPPORT SERVICES FOR ONLINE COURSEWARE TO ITS PARENT COMPANY. THESE SERVICES ARE PROVIDED AT AN AGREED COST PLUS MARKUP. A REFERENCE WAS MAD E TO TPO. TP ADJUSTMENTS WERE SUGGESTED. AFTER APPROVAL FROM DR P-I, NEW DELHI, 2 ITA NO.431/DEL/2012 ASSESSING OFFICER MADE ADDITION AND ASSESSED INCOME AT RS.4,36,46,800. NOW ASSESSEE IS IN APPEAL BEFORE US. 2. THE GROUNDS TAKEN BY THE ASSESSEE IN THE APPEAL READ AS UNDER :- THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, A ND IN LAW; 1. THE ASSESSMENT ORDER PASSED BY THE LEARNED ASSES SING OFFICER ('LD. AO') PURSUANT TO THE DIRECTIONS OF LE ARNED DISPUTE RESOLUTION PANEL ('LD. DRP') IS BAD IN LAW AND VOID AB-INITIO. 2. THE LD. DRP AND THE LD. AO (FOLLOWING THE DIRECT IONS OF THE LD. DRP), ERRED BOTH ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 11,859,033 TO THE INCOME OF THE APPELLANT PROPOSED BY THE TRANSFER PRICING OFFICER ('LD. TPO' ) BY HOLDING THAT THE INTERNATIONAL RELATED PARTY TRANSA CTIONS PERTAINING TO PROVISION OF CONTENT DEVELOPMENT SUPP ORT SERVICES DO NOT SATISFY THE ARM'S LENGTH PRINCIPLE ENVISAGED UNDER THE INCOME-TAX ACT, 1961 ('THE ACT') AND IN D OING SO, THE LD. DRP AND THE LD. AO HAS GROSSLY ERRED IN AGREEIN G WITH AND UPHOLDING THE LD. TPO'S ACTION OF: 2.1. NOT APPRECIATING THAT NONE OF THE CONDITIONS SET OUT IN SECTION 92C(3) OF THE ACT ARE SATISFIED IN THE PRES ENT CASE; 2.2. IGNORING THE FACT THAT THE APPELLANT IS ENTIT LED TO TAX HOLIDAY UNDER SECTION 10A OF THE ACT ON ITS PROFITS AND THEREFORE WOULD NOT HAVE ANY UNTOWARD MOTIVE OF DER IVING A TAX ADVANTAGE BY MANIPULATING TRANSFER PRICES OF IT S INTERNATIONAL TRANSACTIONS; 2.3. DISREGARDING THE ARM'S LENGTH PRICE (,ALP'), AS DETERMINED BY THE APPELLANT IN THE TRANSFER PRICING (TP') DOCUMENTATION MAINTAINED BY IT IN TERMS OF SECTION 92D OF THE ACT READ WITH RULE 10D OF THE INCOME-TAX RULES, 1962 ('RULES') AS WELL AS FRESH SEARCH; AND IN PARTICULA R MODIFYING/ REJECTING THE FILTERS APPLIED BY THE APPELLANT; 3 ITA NO.431/DEL/2012 2.4. DISREGARDING MULTIPLE YEAR! PRIOR YEARS' DATA AS USED BY THE APPELLANT IN THE TP DOCUMENTATION AND HOLDING T HAT CURRENT YEAR (I.E. FY 2006-07) DATA FOR COMPARABLE COMPANIES SHOULD BE USED DESPITE THE FACT THAT THE SAME WAS NOT NECESSARILY AVAILABLE TO THE APPELLANT AT THE T IME OF PREPARING ITS TP DOCUMENTATION, AND IN DOING SO HAV E GROSSLY ERRED IN; 2.4.1. INTERPRETING THE REQUIREMENT OF 'CONTEMPORANEOUS' DATA IN THE RULES TO NECESSARILY IMPLY CURRENT/ SINGLE YEAR (I.E. FY 2006-07) DATA; AND 2.4.2. HOLDING THAT AT THE TIME OF CREATING/ MAINT AINING THE TP DOCUMENTATION, THE APPELLANT COULD HAVE PROC URED CURRENT SINGLE YEAR DATA (I.E. FY 2006-07 DATA) FRO M SOURCES OTHER THAN THE ELECTRONIC DATA BASES, WHEN IN FACT PRACTICALLY NO SUCH OTHER SOURCES WERE AVAILABLE IN CASE OF MOST COMPANIES; 2.5. COLLECTING INFORMATION OF THE COMPANIES BY EX ERCISING POWER GRANTED TO HIM UNDER SECTION 133(6) OF THE AC T THAT WAS NOT AVAILABLE TO THE APPELLANT IN THE PUBLIC DOMAIN AND RELYING ON SELECTIVE INFORMATION FOR COMPARABILITY PURPOSES (AND TO THE EXTENT OF COMPLETELY IGNORING RELIABLE DATA AVAILAB LE IN PUBLIC DOMAIN/ ANNUAL REPORTS IN NUMEROUS CASES); 2.5.1. AND IN DOING SO VIOLATING THE FUNDAMENTAL PRINCIPLES OF NATURAL JUSTICE BY RELYING ON THE INF ORMATION SOURCED UNDER SECTION 133(6); AND ALSO BY 2.5.2. NOT SHARING WITH THE APPELLANT, IN CASE OF A NUMBER OF COMPARABLES, THE INFORMATION/ REPLY RECEI VED BY THE TPO/ AO U/S 133(6); 2.6. BENCHMARKING THE APPELLANT WRONGLY AS A SOFTW ARE DEVELOPMENT SERVICE PROVIDER WITHOUT PROVIDING ANY REASONING OR BASIS OF SUCH TREATMENT DESPITE THE FACT THAT TH E APPELLANT HAS BEEN CHARACTERIZED AS A PROVIDER OF CONTENT DEVELOP MENT SERVICES IN THE APPELLANT'S TP DOCUMENTATION; 2.7. REJECTING COMPARABILITY ANALYSIS IN THE APPEL LANT'S TP DOCUMENTATION/ FRESH SEARCH AND IN CONDUCTING A FRE SH 4 ITA NO.431/DEL/2012 COMPARABILITY ANALYSIS BASED ON APPLICATION OF THE FOLLOWING ADDITIONAL/ REVISED FILTERS IN DETERMINING THE ALP FOR THE INTERNATIONAL TRANSACTIONS: 2.7.1. EXCLUSION OF COMPANIES HAVING DIFFERENT FINANCIAL YEAR ENDING (I.E. NOT MARCH 31,2007); 2.7.2. EXCLUSION OF COMPANIES WITH EXPORT SALES TH AT ARE LESS THAN 25% OF THEIR TOTAL REVENUE; 2.7.3. EXCLUSION OF COMPANIES WITH DIMINISHING REVENUES/ PERSISTENT LOSSES FOR LAST THREE YEARS UP TO AND INCLUDING FY 2006-07; 2.7.4. RETAINING COMPANIES WITH RELATED PARTY TRANSACTIONS UPTO 25% OF THEIR SALES; 2.7.5. ADOPTING EMPLOYEE COST/ REVENUES FILTER GRE ATER THAN 25% OF THEIR TOTAL REVENUES AS A SEARCH CRITER IA FOR SHORT LISTING AND EVALUATING COMPARABLES; 2.7.6. EXCLUSION OF COMPANIES WITH ONSITE REVENUES GREATER THAN 75% OF THEIR EXPORT REVENUES FOR SELEC TING COMPARABLES; AND REJECTING, IN PARTICULAR, THE FOLLOWING FILTERS APPLIED BY THE APPELLANT IN ITS TP DOCUMENTATION/ FRESH SEARCH : 2.7.7. COMPANIES HAVING OTHER OPERATING INCOME (I. E. INCOME OTHER THAN MANUFACTURING AND TRADING INCOME) TO SALES GREATER THAN 50% WERE ACCEPTED; 2.7.8. COMPANIES WITH NET WORTH LESS THAN ZERO WER E REJECTED; 2.7.9. COMPANIES HAVING RESEARCH & DEVELOPMENT COS TS TO SALES LESS THAN 3% WERE ACCEPTED; AND; 2.7.10. COMPANIES HAVING ADVERTISING, MARKETING AN D DISTRIBUTION COSTS TO SALES LESS THAN 3% WERE ACCEP TED. 5 ITA NO.431/DEL/2012 2.8. INCLUDING HIGH-PROFIT MAKING COMPANIES IN THE FINAL COMPARABLES' SET FOR BENCHMARKING A LOW RISK CAPTIV E UNIT SUCH AS THE APPELLANT (DISREGARDING JUDICIAL PRONOUNCEME NTS ON THE ISSUE), THUS DEMONSTRATING AN INTENTION TO ARRIVE A T A PRE- FORMULATED OPINION WITHOUT COMPLETE AND ADEQUATE AP PLICATION OF MIND WITH THE SINGLE-MINDED INTENTION OF MAKING AN ADDITION TO THE RETURNED INCOME OF THE APPELLANT; 2.9. INCLUDING CERTAIN COMPANIES THAT ARE NOT COMP ARABLE TO THE APPELLANT IN TERMS OF FUNCTIONS PERFORMED, ASSE TS EMPLOYED AND RISKS ASSUMED; 2.10. RESORTING TO ARBITRARY REJECTION OF LOW-PROF IT/ LOSS MAKING COMPANIES BASED ON ERRONEOUS AND INCONSISTEN T REASONS; 2.11. EXCLUDING CERTAIN COMPANIES ON ARBITRARY/ FR IVOLOUS GROUNDS EVEN THOUGH THEY ARE COMPARABLE TO THE APPE LLANT IN TERMS OF FUNCTIONS PERFORMED, ASSETS EMPLOYED AND R ISKS ASSUMED; 2.12. IGNORING THE BUSINESS/ COMMERCIAL REALITY TH AT SINCE THE APPELLANT IS REMUNERATED ON AN ARM'S LENGTH COST PL US BASIS, I.E. IT IS COMPENSATED FOR ALL ITS OPERATING COSTS PLUS A PRE-AGREED MARK-UP BASED ON A BENCH MARKING ANALYSIS, THE APPE LLANT UNDERTAKES MINIMAL BUSINESS RISKS AS AGAINST COMPAR ABLE COMPANIES THAT ARE FULL FLEDGED RISK TAKING ENTREPR ENEURS, AND BY NOT ALLOWING A RISK ADJUSTMENT TO THE APPELLANT ON ACCOUNT OF THIS FACT; 2.13. COMMITTING A NUMBER OF FACTUAL ERRORS IN ACC EPT-REJECT OF COMPARABLES AND/ OR IN THE COMPUTATION OF THE OP ERATING PROFIT MARGINS OF THE COMPARABLES; 2.14. DISREGARDING JUDICIAL PRONOUNCEMENTS IN INDI A IN UNDERTAKING THE TP ADJUSTMENT; 3. THE LD. AO ERRED IN NOT VERIFYING THE FACTUAL ER RORS IN COMPUTATION OF THE OPERATING MARGINS OF THE COMPARA BLES AND ACCORDINGLY RE-COMPUTING THE ALP ACCORDINGLY WHILE PASSING THE ORDER, PURSUANT TO THE DIRECTIONS OF THE LD. DR P; 6 ITA NO.431/DEL/2012 4. THE LD. AO AND LD. DRP ERRED IN REJECTING THE C LAIM OF THE APPELLANT FOR DEDUCTION UNDER SECTION 10A OF THE ACT, IN RESPECT OF PROFITS DERIVED BY ITS STP UNIT IN CHENN AI ON THE ALLEGATION THAT IT WAS FORMED BY RECONSTRUCTION OF OLD BUSINESS. 4.1 THE LD. AO AND LD. DRP ERRED IN NOT FOLLOWING THE ORDER OF THE BOMBAY HIGH COURT ON THIS ISSUE IN APP ELLANTS OWN CASE FOR AY 2005-06 BY STATING THAT IT IS NOT A WARE WHETHER ANY SLP HAS BEEN FILED BY THE DEPARTMENT AG AINST THE SAID ORDER OF THE HON'BLE HIGH COURT. 4.2 THE LD. AO AND LD. DRP ERRED IN NOT ADJUDICATIN G ON MERITS AND DISREGARDING THE DETAILED ARGUMENTS/ SUB MISSIONS PUT FORTH BY THE APPELLANT DURING THE COURSE OF THE DRP/ ASSESSMENT PROCEEDINGS. 5. THE LD. AO AND LD. DRP ERRED IN DISALLOWING RS.809,447 UNDER SECTION 40(A)(IA) OF THE ACT ON WH ICH TDS HAS BEEN DEDUCTED AND DEPOSITED UNDER CHAPTER XVII- B OF THE ACT. 6. THE LD. AO AND LD. DRP ERRED IN DISALLOWING AND CONSIDERING RS.114,030 ON ACCOUNT OF 'COMPUTER CONSUMABLES & SMALL ACCESSORIES' AND RS.24,469 ON A CCOUNT OF 'REPAIR & MAINTENANCE - OTHERS' AS AN EXPENSE OF CAPITAL IN NATURE. 7. THE LD. AO AND LD. DRP ERRED IN DISALLOWING AN AMOUNT OF RS.925,768 ON ACCOUNT OF ADVANCES WRITTEN OFF BY THE APPELLANT. 8. WITHOUT PREJUDICE TO THE GROUNDS 4 TO 7 ABOVE, O N THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN L AW, THE LD. AO ERRED IN NOT ALLOWING DEDUCTION UNDER SECTION 10 A OF THE ACT ON THE INCREASED AMOUNT OF BUSINESS INCOME/PROF ITS ON ACCOUNT OF ADDITIONS/DISALLOWANCES MADE BY THE LD. AO. 9. THE LD. DRP ERRED IN DISREGARDING THE DETAILED ARGUMENTS/ SUBMISSIONS PUT FORTH BY THE APPELLANT D URING THE COURSE OF THE DRP/ ASSESSMENT PROCEEDINGS WHILE PAS SING ITS DIRECTION UNDER SECTION 144C OF THE ACT; 7 ITA NO.431/DEL/2012 10. THAT THE LD. AO ERRED ON FACTS AND IN LAW IN CH ARGING INTEREST UNDER SECTIONS 234 A, B AND C OF THE ACT; 11. THE LD. AO HAS GROSSLY ERRED IN INITIATING PENA LTY UNDER SECTION 271(1)(C) OF THE ACT MECHANICALLY AND WITHOUT RECORDING ANY SATISFACTION FOR ITS INITIATION. THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTH ER. THE APPELLANT CRAVES LEAVE TO ALTER, AMEND OR WITHD RAW ALL OR ANY OF THE GROUNDS HEREIN OR ADD ANY FURTHER GROUND S AS MAY BE CONSIDERED NECESSARY EITHER BEFORE OR DURING THE HEARING. 3. GROUND NO.1 AND GROUND NOS.8 TO 11 ARE GENERAL I N NATURE, HENCE, DOES NOT REQUIRE ANY SEPARATE ADJUDICATION. 4. GROUND NOS.2 AND 3 RELATED TO THE ADDITION OF RS .1,18,59,033/- MADE BY ASSESSING OFFICER ON THE BASIS OF TPO REPOR T WITH REGARD TO INTERNATIONAL TRANSACTIONS ENTERED INTO BY THE ASSE SSEE WITH PARENT COMPANY BY HOLDING THAT THEY WERE NOT AT ARMS LENG TH. THIS ADDITION HAS BEEN APPROVED BY THE DRP THOUGH IT WAS OBJECTED BY THE ASSESSEE. 5. ASSESSEE HAS RAISED SEVERAL SUB-GROUNDS IN THIS REGARD IN THE GROUND NO.2 OF THE APPEAL BUT ALL THE GROUNDS ASSAI L THE TP ADJUSTMENT OF RS. 1,18,59,033/-. 6. LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TOWARDS PAGES 130, 158 AND 159 OF THE TPO ORDER. TPO SELECTED 26 COMP ANIES AS COMPARABLE COMPANIES HAVING THE AVERAGE MEAN OF PRO FITS AT 25%. THESE 8 ITA NO.431/DEL/2012 COMPANIES AND THEIR PROFIT PLI (OP/TC) AS REPRODUCE D IN THE TPO ORDER ARE AS UNDER:- S.NO COMPANY NAME SALES (RS. CR) OP TO TOTAL COST % 1 ACCEL TRANSMATIC LTD (SEG.) 9.68 20.90% 2 AVANI CIMCON TECHNOLOGIES LTD 3.55 50.29% 3 CELESTIAL LABS LTD 14.13 58.35% 4 DATAMATICS LTD 54.51 1.38% 5 E-ZEST SOLUTIONS LTD 6.26 35.63% 6 FLEXTRONICS SOFTWARE SYSTEMS LTD (SEG.) 848.66 25.31% 7 GEOMETRIC LTD (SEG.) 158.38 10.71% 8 HELIOS & MATHESON INFORMATION TECHNOLOGY LTD 178.63 35.63% 9 IGATE GLOBAL SOLUTIONS LTD 747.27 7.49% 10 INFOSYS TECHNOLOGIES LTD 13149 40.30% 11 ISHIR INFOTECH LTD 7.42 30.12% 12 KALS INFORMATION SYSTEMS LTD (SEG.) 2.00 30.55% 13 LGS GLOBAL LTD (LANCO GLOBAL SOLUTIONS LTD) 45.39 15.75% 14 LUCID SOFTWARE LTD 1.70 19.37% 15 MEDIASOFT SOLUTIONS LTD 1.85 3.66% 9 ITA NO.431/DEL/2012 16 MEGASOFT LTD 139.33 60.23% 17 MINDTREE LTD 590.35 16.90% 18 PERSISTENT SYSTEMS LTD 293.75 24.18% 19 QUINTEGRA SOLUTIONS LTD 62.72 12.56% 20 R S SOFTWARE (INDIA) LTD 101.04 13.47% 21 R SYSTEMS INTERNATIONAL LTD (SEG) 112.01 15.07% 22 SASKEN COMMUNICATION TECHNOLOGIES LTD (SEG.) 343.57 22.16% 23 SIP TECHNOLOGIES & EXPORTS LTD 3.80 13.90% 24 TATA ELXSI LTD (SEG) 262.58 26.51% 25 THIRDWARE SOLUTIONS LTD 36.08 25.12 26 WIPRO LTD (SEG) 9616.09 33.48% 25% LD. ARS PLEADINGS WERE BASED ON THE DECISION OF TH E TRIBUNAL IN THE CASE OF M/S TOLUNA INDIA PVT. LTD. IN ITA NO. 5645/DEL/2 011 DATED 26.08.2014. ACCORDING TO LD. AR, THE CASE OF TOLUNA INDIA PVT. LTD. WAS OF AY 2007-08 AND THERE WERE 26 COMPARABLE COMPANIE S IN THE SAME SERIAL ORDER WHICH WERE TREATED AS COMPARABLE COMPA NIES BY THE TPO. AS PER LD. AR, TRIBUNAL IN THE CASE OF TOLUNA INDIA PV T. LTD., SUPRA, HAS DISCUSSED EACH AND EVERY COMPARABLE IN DETAIL AND F OUND ONLY SOME 10 ITA NO.431/DEL/2012 COMPANIES AS COMPARABLE. LD. AR PLEADED THAT THE D ECISION OF TOLUNA, SUPRA, SHOULD BE FOLLOWED IN THE ASSESSEES CASE AL SO AS FACTS ARE SAME. 7. ON THE OTHER HAND, LD. CIT DR OPPOSED THE SUBMIS SION AND RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW AND PLACED A COPY OF THE DECISION OF DELHI BENCH IN THE CASE OF INTERRA INFORMATION T ECHNOLOGIES INDIA PVT. LTD. IN ITA NO. 5568 AND 5680/DEL/2010 AND 2011 DAT ED 31.10.2012 TO THE EFFECT THAT SUCH DECISION IN THE CASE OF TOLUNA , SUPRA, CANNOT BE FOLLOWED. 8. AFTER HEARING BOTH THE SIDES AND HAVING GONE THR OUGH THE MATERIAL PLACED ON RECORD, WE HOLD THAT ASSESSEE IS A WHOLLY OWNED SUBSIDIARY OF ELEMENT K CORPORATION, USA. IT PROVIDES CONTENT DE SIGN AND DEVELOPMENT SUPPORT SERVICES FOR ONLINE COURSESWARE UNDER A SERVICE AGREEMENT WITH ITS PARENT COMPANY. ASSESSEE IS REMU NERATED ON COST PLUS 15% MARKUP FOR THE SERVICES RENDERED. THUS, ASSESS EE IS A LOW RISK CAPTIVE SERVICE PROVIDER. ACCORDING TO TPO ALSO, AS SESSEE WAS IT SERVICE PROVIDER IN THE FIELD OF SOFTWARE DEVELOPMENT SERVI CES TO ITS PARENT COMPANY. TPO CONSIDERED 26 COMPANIES MENTIONED ABOV E AS COMPARABLE WITH AVERAGE MEAN MARGIN OF 25%. WE HAVE GONE THROU GH THE ORDER OF TPO AND ORDER OF THE TRIBUNAL IN THE CASE OF TOLUNA INDIA PVT. LTD. SUPRA. COMPARISON OF BOTH THE ORDERS SHOWS THAT IN THE CAS E OF TOLUNA, THE ASSESSMENT YEAR WAS 2007-08. TPO HAS TAKEN THESE V ERY 26 COMPANIES 11 ITA NO.431/DEL/2012 AS COMPARABLES. THEREFORE, THE ACTION OF THE TPO IT SELF SUGGESTS THAT ASSESSEES CASE IS COMPARABLE WITH THE CASE OF TOLU NA INDIA PVT. LTD. ASSESSMENT YEAR INVOLVED IS AY 2007-08 IN BOTH THE CASES. WE HAVE GONE THROUGH THE ORDER PASSED BY DELHI BENCH OF TRI BUNAL IN THE CASE TOLUNA INDIA PVT. LTD, SUPRA. RESPECTFULLY FOLLOWI NG THE DECISION OF ITAT, DELHI BENCH IN THE CASE OF TOLUNA INDIA PVT. LTD., SUPRA, WE DECIDE THE ISSUE ACCORDINGLY. THE RELEVANT PARAS OF THE SA ID DECISION ARE REPRODUCED AS UNDER:- ACCEL TRANSMATIC LIMITED (SOFTWARE SERVICES SEGMEN T) : 16.1. THE TPO NOTICED THAT THIS COMPANY WAS FINDING PLACE IN THE ACCEPT/REJECT MATRIX OF THE TAX PAYER, BUT W AS REJECTED IN THE TP DOCUMENTS BY STATING THAT IT FAILED THE F ILTER OF ADVERTISING, MARKETING AND DISTRIBUTION EXPENSES TO SALES AT LESS THAN 3%. AS THE DATA OF THE SOFTWARE SERVICES SEGMENT OF THIS COMPANY WAS AVAILABLE, THE TPO PROPOSED TO INC LUDE IT IN THE LIST OF COMPARABLES. THE ASSESSEE OBJECTED T O THE INCLUSION OF THIS COMPANY ON TWO ISSUES, NAMELY, TH E RELATED PARTY TRANSACTIONS WERE MORE THAN 10% AND THE ADVER TISEMENT EXPENSES WERE MORE THAN 3% OF SALES. AFTER REJECTIN G SUCH OBJECTIONS, THE TPO INCLUDED THE SOFTWARE SERVICE S EGMENT OF THIS COMPANY IN THE LIST OF COMPARABLES. THE ASSESS EE'S OBJECTIONS BEFORE THE DRP ALSO MET WITH FAILURE BEF ORE THE DRP. 16.2. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE A SSESSEE ITSELF CONSIDERED THIS COMPANY AS FUNCTIONALLY COMP ARABLE BY INCLUDING IT IN THE ACCEPT/REJECT MATRIX, BUT, REJE CTED IT ON THE GROUND THAT ADVERTISEMENT EXPENSES WERE MORE THAN 3 %. IT IS IMPORTANT TO MENTION THAT THE TPO HAS TAKEN THE FIG URES OF THIS COMPANY'S SOFTWARE SERVICES SEGMENT ALONE, WHI CH IS ADMITTEDLY AKIN TO THAT OF THE ASSESSEE AND THAT TH E ADVERTISEMENT, MARKETING AND DISTRIBUTION SPEND IN THIS 12 ITA NO.431/DEL/2012 SEGMENT IS LESS THAN 3%, BEING THE FILTER APPLIED B Y THE ASSESSEE. 16.3. IN SO FAR AS THE OTHER OBJECTION OF THE PERC ENTAGE OF RELATED PARTY TRANSACTIONS IS CONCERNED, THE ID. AR RELIED ON TWO TRIBUNAL ORDERS IN WHICH FILTER OF 15% RPT HAS BEEN ACCEPTED. ON THE CONTRARY, WE FIND THE PREDOMINANT VIEW OF THE TRIBUNAL ACROSS THE COUNTRY IN SEVERAL CASES IN CLUDING ACTIS ADVISORS PVT. LTD. VS. DCIT [(2012) 20 ITR (T RIB.) 138 (DEL)], STREAM INTERNATIONAL PVT. LTD. VS. ADIT (IT) [(2013) 141 ITD 492 (MUM) [AUTHORED BY THE AM OF TH IS ORDER] AND AGILENT TECHNOLOGIES INTERNATIONAL PVT. LTD. VS. ACIT [(2013) 36 CCH 187 (DEL) (TRIB.)], IS THAT A C OMPANY HAVING MORE THAN 25% OF RELATED PARTY TRANSACTIONS IS CONSIDERED AS CONTROLLED. IN OTHER WORDS, IF THE RE LATED PARTY TRANSACTIONS IN A COMPANY ARE LESS THAN 25%, THEN, IT CANNOT BE CONSIDERED AS CONTROLLED AND HENCE QUALIFIES TO BE COMPARABLE, IF IT IS OTHERWISE SO. 16.4. SINCE BOTH THE OBJECTIONS TAKEN BY THE ASSESS EE AGAINST THE INCLUSION OF THIS COMPANY ARE NOT SUSTAINABLE, WE UPHOLD THE INCLUSION OF THE SOFTWARE SERVICE SEGMENT OF AC CEL TRANSMATIC LIMITED IN THE LIST OF COMPARABLES. THE ASSESSEE FAILS. AVANI CIMCON TECHNOLOGIES LIMITED: 17.1. THE TPO FOUND THIS COMPANY TO BE ENGAGED IN S OFTWARE DEVELOPMENT. NOTICE U/S 133(6) WAS ISSUED TO THE CO MPANY TO GET COMPLETE INFORMATION. ACCORDING TO THE TPO, THI S COMPANY QUALIFIED ALL THE FILTERS. THE ASSESSEE ARG UED BEFORE THE TPO THAT THIS COMPANY WAS INTO SOFTWARE PRODUCT S AND THE SEGMENTAL RESULTS WERE NOT AVAILABLE. THE TPO R EJECTED SUCH CONTENTION BY RELYING ON THE SPECIFIC INFORMAT ION COLLECTED FROM THE COMPANY U/S 133(6) WHICH DIVULGE D THAT THIS COMPANY WAS A PURELY SOFTWARE DEVELOPMENT COMP ANY ENGAGED IN PROVIDING SOFTWARE DEVELOPMENT AND CONSU LTING IT SERVICES TO ITS CLIENTS. THIS COMPANY WAS CONCEN TRATING ON INTERNET ENABLED BUSINESS INFORMATION SYSTEMS IN A WIDE RANGE OF INDUSTRIES. RESULTANTLY, THIS COMPANY WAS INCLUDED IN THE LIST OF COMPARABLES. 17.2. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND P ERUSING THE RELEVANT MATERIAL ON RECORD, WE FIND FROM THE D ESCRIPTION 13 ITA NO.431/DEL/2012 OF BUSINESS ACTIVITY OF THIS COMPANY AS REPRODUCED ON INTERNAL PAGE 90 OF THE TPO'S ORDER, THAT IT IS A P URE SOFTWARE DEVELOPMENT SERVICE PROVIDER. IN THE ABSENCE OF ANY OTHER SPECIFIC OBJECTION AGAINST THIS COMPANY, WE ARE OF THE CONSIDERED OPINION THAT THIS COMPANY HAS BEEN RIGHT LY INCLUDED BY THE TPO IN THE LIST OF COMPARABLES. THE ASSESSEE FAILS. CELESTIAL LABS LIMITED: 18.1. THE TPO INCLUDED THIS COMPANY IN THE LIST OF COMPARABLES BY OBSERVING THAT IT WAS RENDERING MAIN LY SOFTWARE DEVELOPMENT SERVICES. 18.2. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD, WE FIND F ROM THE ANNUAL ACCOUNTS OF THIS COMPANY, A COPY OF WHICH IS AVAILABLE ON PAGE 41 OF THE PAPER BOOK, THAT IT IS ENGAGED MAINLY IN THE DEVELOPING THE SOFTWARE PRODUCTS IN T HE SHAPE OF TOOLS ETC., WHICH ARE PROTECTED USING THE PATENT . THIS COMPANY DEVELOPED A TOOL, 'CELSUITE' TO DRUG DISCOV ERY IN FINDING THE LEAD MOLECULES FOR DRUG DISCOVERY. A S THIS COMPANY IS ENGAGED IN DEVELOPING SOFTWARE TOOLS AFT ER ENOUGH RESEARCH AND DEVELOPMENT ACTIVITY AND THE TO OLS SO PRODUCED BY IT ARE ITS INTELLECTUAL PROPERTY, IT CA NNOT BE CONSIDERED AS COMPARABLE TO THE ASSESSEE WHICH IS, ALSO ALBEIT IN SOFTWARE DEVELOPMENT, BUT IS DOING IT ON CONTRAC T BASIS WITHOUT HAVING ANY I.P. RIGHTS IN THE SOFTWARE DEVE LOPED BY IT. IT IS FURTHER RELEVANT TO NOTE THAT THIS COMPANY HA S BEEN HELD TO BE NOT COMPARABLE BY THE DISPUTE RESOLUTION PANE L (DRP) IN ITS DIRECTIONS FOR A SUBSEQUENT YEAR, A COPY OF WHICH IS AVAILABLE ON RECORD. THUS THIS COMPANY CAN'T BE CON SIDERED AS FUNCTIONALLY SIMILAR TO THAT OF THE ASSESSEE. WE, T HEREFORE, DIRECT TO EXCLUDE THIS COMPANY FROM THE LIST OF COM PARABLES. THE ASSESSEE SUCCEEDS. DATAMATICS LIMITED : 19. THE ASSESSEE HAS NO OBJECTION TO THE INCLUSION OF THIS COMPANY IN THE LIST OF COMPARABLES. E-ZEST SOLUTIONS LIMITED : 20.1. THE ANNUAL REPORT OF THIS COMPANY WAS AVAILA BLE, BUT, THE FUNCTIONALITY WAS NOT CLEAR. NOTICE U/S 133(6) WAS ISSUED 14 ITA NO.431/DEL/2012 BY THE TPO. ON RECEIPT OF REPLY FROM THE COMPANY, I T WAS NOTICED THAT IT WAS ENGAGED IN SOFTWARE DEVELOPMENT SERVICES AND, HENCE, QUALIFIED ALL THE FILTERS APPLIED BY TH E TPO. AFTER CONSIDERING THE OBJECTIONS OF THE ASSESSEE, THE TPO HELD IT TO BE INCLUDIBLE IN THE LIST OF COMPARABLES. THE DRP U PHELD THE DRAFT ORDER ON THIS COUNT. 20.2. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD, WE FIND THIS COMPA NY TO BE COMPARABLE TO THAT OF THE ASSESSEE COMPANY, BECAUSE IT IS ALSO ENGAGED IN RENDERING SOFTWARE DEVELOPMENT SERVICES TO OUTSIDERS. THE ID. AR NEEDLESSLY TRIED TO DISTINGUI SH THIS COMPANY BY CONTENDING THAT THE SERVICES RENDERED BY IT WERE DIFFERENT FROM THAT OF THE ASSESSEE. WE DO NOT FIND ANY FORCE IN THIS SUBMISSION. THE COMPARABILITY OF A COMPANY IS TESTED ON VARIOUS PARAMETERS AND A VIEW IS TAKEN AS TO ITS COMPARABILITY OR OTHERWISE BY CONSIDERING THE ENTIR ETY OF THE FACTS AND CIRCUMSTANCES. SIMPLY BECAUSE THE NATURE OF SOFTWARE DEVELOPMENT SERVICES PROVIDED BY A COMPANY IS DIFFERENT FROM THOSE PROVIDED BY THE ASSESSEE, THE SAME DOES NOT BECOME INCOMPARABLE. HERE IS A CASE IN WHICH TH IS COMPANY IS ALSO PROVIDING SOFTWARE DEVELOPMENT SERV ICES AS IS DONE BY THE ASSESSEE ON CONTRACT BASIS FOR OTHER S WITHOUT HAVING ANY INTELLECTUAL PROPERTY RIGHTS IN THEM. A SMALL VARIATION IN THE NATURE OF SERVICES DOES NOT MAKE A COMPANY INCOMPARABLE. IT IS NOT A CASE THAT THE TPO HAS CON SIDERED A COMPANY RENDERING MANAGERIAL OR ENGINEERING SERVICE S AND TREATED IT AS COMPARABLE TO THE ASSESSEE RENDERING SOFTWARE DEVELOPMENT SERVICES. MERELY BECAUSE THE NATURE OF SERVICE RENDERED BY THIS COMPANY WITHIN THE OVERALL SOFTWAR E DEVELOPMENT SERVICES, IS NOT IDENTICAL, WILL NOT MA KE IT INCOMPARABLE, WHEN IT IS OTHERWISE SIMILAR TO THAT OF THE ASSESSEE ON ALL OTHER SCORES. AS SUCH, WE HOLD THAT THIS COMPANY WAS RIGHTLY INCLUDED BY THE TPO IN THE LIST OF COMPARABLES. THE ASSESSEE FAILS. FLEXTRONICS SOFTWARE SYSTEMS LIMITED (PRODUCTS AND SERVICES SEGMENT) : 21.1. THIS COMPANY WAS FINDING PLACE IN THE ACCEPT/REJECT MATRIX OF THE ASSESSEE, BUT WAS REJECTED IN THE TP STUDY REPORT BECAUSE IT FAILED R&D SPEND FILTER. THE TPO NOTICED THAT THE 'PRODUCTS AND SERVICE SEGMENT' OF THIS COMPANY WAS 15 ITA NO.431/DEL/2012 COMPARABLE TO THAT OF THE ASSESSEE. AS THE PRODUCT REVENUE WAS RS. 92.1 CRORE OUT OF THE TOTAL PRODUCT AND SER VICE SEGMENT REVENUE OF RS. 847.2 CRORE, THE TPO HELD TH IS COMPANY TO BE COMPARABLE. THE ASSESSEE'S OBJECTION THAT THIS COMPANY HAD INCURRED HUGE R & D EXPENSES AND, HENCE, SHOULD BE IGNORED, DID NOT FIND FAVOUR WITH THE TPO . THE DRP APPROVED THE VIEW TAKEN BY THE AUTHORITIES BELO W ON THE COMPARABILITY OF THIS CASE. 21.2. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD, WE FIND T HIS COMPANY TO BE NOT COMPARABLE TO THAT OF THE ASSESSE E. THE REASON FOR OUR THIS DECISION IS THAT THE TPO HAS TA KEN SEGMENTAL DATA OF RS. PRODUCT AND SERVICE SEGMENT O F THIS COMPANY WHICH HAS PRODUCT REVENUE OF 92.1 CRORE. IN CONTRAST TO IT, THE INSTANT ASSESSEE IS NOT SELLING ANY SOFTWARE PRODUCTS, BUT, IS DOING THE JOB ASSIGNED TO IT ON C OST PLUS BASIS. THE CONTENTION OF THE ID. DR THAT SINCE THE MAJORITY OF THE REVENUE FROM RS. PRODUCT AND SERVICES SEGMENT' WAS FROM THE SERVICES SEGMENT AND, HENCE, THIS COMPANY SHOUL D BE CONSIDERED AS COMPARABLE, IS BEREFT OF ANY FORCE. W HEN FIGURES OF PRODUCTS AND SERVICES ARE COMBINED, IT C ANNOT BE ASCERTAINED AS TO HOW MUCH CONTRIBUTION WAS MADE BY THE PRODUCT DIVISION OR THE SERVICE DIVISION TO THE OVE RALL REVENUE OF THE PRODUCT AND SERVICES SEGMENT. AS THE ASSESSE E IS ADMITTEDLY NOT ENGAGED IN SELLING ITS-SOFTWARE PROD UCTS, SUCH A COMPANY CANNOT BE CONSIDERED AS COMPARABLE. IT CA N BE SEEN FROM THE ANNUAL REPORT OF THIS COMPANY, A COPY OF WHICH IS AVAILABLE ON PAGE 88 OF THE PAPER BOOK, THAT IT CONSOLIDATED ITS EXISTING PRODUCT PORTFOLIO AND TOOK STEPS TO EX PAND INTO FURTHER TECHNOLOGIES BY INCREASING THE MOMENTUM IN KEY INITIATIVES IN WIMAX, IMS, SIP & ISS/ESS DOMAINS. T HIS COMPANY HAS ITS OWN PRODUCTS SUCH AS ASN, W1MAX, GATEWAY PRODUCT WITH ASN LIGHT. IT IS FURTHER RELEV ANT TO NOTE THAT THE YEAR ENDING OF THIS COMPANY IS NOT CO INCIDING WITH THAT OF THE ASSESSEE AND IT IS NOT KNOWN AS TO HOW THE TPO HAS ADOPTED THE RELEVANT FIGURES FOR COMPARISON . IN VIEW OF THE FOREGOING DISCUSSION, WE HOLD THIS COMPANY T O BE NOT COMPARABLE AND DIRECT ITS EXCLUSION FROM THE LIST O F COMPARABLES. THE ASSESSEE SUCCEEDS. GEOMETRIC LIMITED (SEGMENTAL): 16 ITA NO.431/DEL/2012 22. THE ASSESSEE HAS NO OBJECTION TO THE INCLUSION OF THIS COMPANY IN THE LIST OF COMPARABLES. HELIOS & MATHESON INFORMATION TECHNOLOGY LIMITED: 23.1. THE TPO NOTICED FROM THE ANNUAL ACCOUNTS OF T HIS COMPANY THAT IT WAS ENGAGED IN THE SOFTWARE DEVELOP MENT SERVICES AND ALSO QUALIFIED EMPLOYEE COST FILTER. T HE ASSESSEE OBJECTED TO ITS INCLUSION BY, INTER ALIA, CONTENDIN G THAT THE PLI OF THIS COMPANY WAS INCORRECTLY WORKED OUT BY THE T PO. CORRECTING THIS MISTAKE IN CALCULATION PART, THE TP O HELD THIS COMPANY TO BE COMPARABLE AND DETERMINED ITS REVISED PLI AT 36.63%. THE DRP UPHELD THE INCLUSION OF THIS COMP ANY IN THE LIST OF COMPARABLES. 23.2. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND P ERUSING THE RELEVANT MATERIAL ON RECORD, WE FIND FROM THE A NNUAL ACCOUNTS OF THIS COMPANY THAT IT IS ENGAGED IN REND ERING ITES BPO SERVICES, APPLICATION MANAGEMENT SERVICES, OFFS HORE DELIVERY, PROJECT MANAGEMENT SERVICES. PUBLIC SECTO R SERVICES, MARITIME PRACTICE AND EXECUTIVE EDUCATION INFORMATION SYSTEMS, ETC. FROM THE ABOVE NARRATION OF THE NATURE OF SERVICES RENDERED BY THIS COMPANY, IT CAN BE SEEN THAT THE SAME IS NOT AT ALL COMPARABLE TO THAT OF T HE ASSESSEE. IT CAN FURTHER BE NOTICED THAT THE TPO HAS TAKEN TH E FIGURES OF THIS COMPANY WHICH REPRESENT RS. INCOME FROM SOFTWA RE SALES AND SERVICES'. OBVIOUSLY, THE ASSESSEE IS NOT ENGAGED IN SOFTWARE SALES. IN VIEW OF OUR ABOVE DISCUSSION WHI LE DEALING WITH THE COMPARABILITY OF FLEXTRONICS SOFTWARE SYST EMS' LIMITED, WE ARE SATISFIED THAT THIS COMPANY CANNOT BE CONSIDERED AS COMPARABLE AND IS, HENCE, DIRECTED TO BE EXCLUDED FROM THE LIST OF COMPARABLES. THE ASSESSEE SUCCEEDS. IGATE GLOBAL SOLUTIONS LIMITED : 24. THE ASSESSEE HAS NO OBJECTION TO THE INCLUSIO N OF THIS COMPANY IN THE LIST OF COMPARABLES. INFOSYS TECHNOLOGIES LIMITED : 25. FROM THE NATURE OF SERVICES RENDERED BY THE ASS ESSEE TO ITS AE ON A COST PLUS BASIS WITHOUT HAVING ANY INTA NGIBLE ASSETS OR RETAINING ANY INTELLECTUAL PROPERTY IN TH E WORK DONE BY IT, WE FIND THAT INFOSYS TECHNOLOGIES LTD., WHIC H IS A GIANT COMPANY IN TERMS OF RISK PROFILE, SCALE, NATURE OF SERVICES, 17 ITA NO.431/DEL/2012 REVENUE OWNERSHIP OF BRANDED/PROPRIETARY PRODUCTS, ONSITE AND OFFSHORE SERVICES, ETC., CANNOT BE COMPARED WIT H THE ASSESSEE. OUR VIEW IS FORTIFIED BY THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. AG NITY INDIA TECHNOLOGIES PVT. LTD. [(2013) 219 TAXMAN 26 (DEL)] IN WHICH INFOSYS LTD. HAS BEEN HELD TO BE NOT COMPARABLE TO A COMPANY THAT WAS ENGAGED IN THE BUSINESS OF DEVELOP MENT OF SOFTWARE FOR PARENT COMPANY. WE, THEREFORE, DIRECT THE EXCLUSION OF THIS CASE FROM THE LIST OF COMPARABLES . THE ASSESSEE SUCCEEDS. ISHIR INFOTECH LIMITED : 26.1. THE AO INCLUDED THIS COMPANY IN THE LIST OF COMPARABLES BY OBSERVING THAT IT QUALIFIED 25% EMPL OYEE COST FILTER AND ALL OTHER FILTERS ON THE BASIS OF I NFORMATION RECEIVED U/S 133(6). THE ASSESSEE OBJECTED TO THE I NCLUSION OF THIS COMPANY BY CONTENDING THAT ITS RELATED PARTY T RANSACTIONS WERE MORE THAN 15% AND EMPLOYEES COST WAS ONLY 4%. THE TPO REJECTED BOTH THE CONTENTIONS BY NOTICING THAT THE EMPLOYEES COST WAS, IN FACT, MORE THAN 25% AS WAS A PPARENT FROM THE INFORMATION RECEIVED U/S 133(6) AND, FURTH ER, THE RPTS ALSO DID NOT EXCEED 25%. 26.2. HAVING HEARD BOTH THE SIDES AND PERUSED TH E RELEVANT MATERIAL ON RECORD, WE FIND THIS COMPANY TO BE COMP ARABLE TO THAT OF THE ASSESSEE. THE ASSESSEE'S OBJECTION THAT EMPLOYEE COST OF THIS COMPANY WAS 4% ONLY, IS NOT CORRECT BE CAUSE OF THE EXERCISE CARRIED OUT BY THE TPO INDICATING THAT THE EMPLOYEES COST WAS MORE THAN 25%. THE ID. DR HAS TA KEN US THROUGH THE ANNUAL ACCOUNTS OF THIS COMPANY WHICH S HOW THAT SOME PART OF THE EMPLOYEES COST WAS ALSO INCLU DED IN 'ADMINISTRATIVE EXPENSES' APART FROM DIRECT ESTABLI SHMENT EXPENSES. IT CAN BE SEEN THAT THE COMPANY HAS INCLU DED PROFESSIONAL FEES OF RS.3.41 CRORE A LONG WITH DIRE CTOR'S SALARY, ETC., UNDER THE HEAD 'ADMINISTRATIVE EXPENS ES'. WHEN THIS OBJECTION WAS TAKEN BY THE ASSESSEE BEFORE THE TPO THAT THE EMPLOYEE COST WAS ONLY 4% VIEWING ONLY THE 'ESTABLISHMENT EXPENSES' IN ISOLATION WITHOUT CONSI DERING THE EMPLOYEE COST INCLUDED UNDER THE HEAD 'ADMINISTRATI VE EXPENSES', THE TPO CORRECTED THE POSITION BY OBSERV ING THAT THE EMPLOYEE COST WAS MORE THAN 25% BY IMPLIEDLY IN CLUDING THE PERSONNEL COST INCLUDED UNDER THE HEAD 'ADMINIS TRATIVE 18 ITA NO.431/DEL/2012 EXPENSES'. THE ASSESSEE DID NOT CHALLENGE THE TPO' S CALCULATION BEFORE THE DRP ON THIS ISSUE. AS SUCH , IT BECOMES APPARENT THAT THERE IS NO MERIT IN THIS OBJ ECTION AGAIN TAKEN UP BEFORE US WHICH HAS ALREADY BEEN SUC CESSFULLY DEALT WITH BY THE TPO. INSOFAR AS THE ASSESSEE'S OB JECTION ABOUT THE RELATED PARTY TRANSACTIONS IS CONCERNED, WE HAVE DISCUSSED THIS ISSUE THOROUGHLY WHILE DEALING WITH THE COMPARABLE CASE OF ACCEL TRANSMATICS LTD. (SUPRA) I N WHICH IT HAS BEEN HELD THAT FILTER OF 25% OF RPT IS GOOD ENO UGH TO MAKE A CONTROLLED TRANSACTION AND THUS EXPUNGING IT FROM THE LIST OF COMPARABLES, WHICH CAN ONLY BE UNCONTROLLED TRANSACTIONS. THE ID. AR FAILED TO POINT OUT ANY F UNCTIONAL DIFFERENCE OF THIS COMPANY VIS-A-VIS THE ASSESSEE. AS SUCH, WE APPROVE THE VIEW TAKEN BY THE TPO IN INCLUDING THIS CASE IN THE LIST OF COMPARABLES. THE ASSESSEE FAILS. KALS INFORMATION SYSTEMS LIMITED (SEGMENTAL): 27.1. THE TPO OBSERVED THAT THIS COMPANY WAS ENGA GED IN SOFTWARE DEVELOPMENT AND TRAINING. AS THE SOFTWARE PRODUCTS CONSTITUTED ONLY 3% OF ITS REVENUE AND TRAINING REV ENUE CONSTITUTED 8.56%, THE TPO HELD THAT THIS SEGMENT O F KALS INFORMATION SYSTEMS LIMITED WAS RIGHTLY INCLUDIBLE. 27.2. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD, IT IS AN ADMITTED POSITION THAT THE TPO ADOPTED SOFTWARE DEVELOPMENT SEGMENT OF THI S COMPANY BY NOTICING THAT THIS SEGMENT ALSO INCLUDED REVENUES FROM SOFTWARE PRODUCTS AND TRAINING. IN VI EW OF THE FACT THAT THE ASSESSEE IS NOT ENGAGED IN IMPARTING ANY TRAINING ON COMMERCIAL BASIS OR SELLING ITS SOFTWARE PRODUCT S, WE HOLD THAT THE FINANCIALS OF THIS COMPANY UNDER THIS SEGM ENT CANNOT BE COMPARED WITH THE ASSESSEE. THE CONTRIBUTION BY THE SALE OF SOFTWARE PRODUCTS OR TRAINING TO THE OVERALL REV ENUE OF THIS SEGMENT CANNOT BE PRECISELY ASCERTAINED TO DETERMIN E THE QUESTION OF ITS COMPARABILITY. AS SUCH, THIS CASE I S DIRECTED TO BE EXCLUDED. THE ASSESSEE SUCCEEDS. LGS GLOBAL LIMITED (LANCO GLOBAL SOLUTIONS LIMITE D) : 28. THE ASSESSEE HAS NO OBJECTION TO THE INCLUSION OF THIS COMPANY IN THE LIST OF COMPARABLES. LUCID SOFTWARE LIMITED : 19 ITA NO.431/DEL/2012 29.1. THE TPO NOTICED THAT THIS COMPANY WAS A PUR E SOFTWARE DEVELOPMENT SERVICES COMPANY AND DID NOT H AVE ANY RELATED PARTY TRANSACTIONS. ON BEING CALLED UPO N TO EXPLAIN AS TO WHY THIS COMPANY BE NOT TREATED AS CO MPARABLE, THE ASSESSEE REPLIED THAT LUCID SOFTWARE LIMITED HA S DEVELOPED RS.MUULAM' SOFTWARE, THE DETAILS OF WHICH WERE COLLECTED FROM THE WEBSITE OF LUCID SOFTWARE ITSELF. IN VIEW OF SUCH DETAILS, IT WAS CONTENDED T HAT THIS COMPANY WAS A SOFTWARE PRODUCT COMPANY HAVING INTEL LECTUAL PROPERTY RIGHTS. REJECTING THE ASSESSEE'S OBJECTION S, THE TPO INCLUDED THIS COMPANY IN THE LIST OF COMPARABLES. 29.2. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD, IT CAN BE SEEN THA T THE ASSESSEE CATEGORICALLY OBJECTED BEFORE THE TPO TO T HE EFFECT THAT THIS COMPANY WAS MAINLY INTO SOFTWARE PRODUCT BUSINESS HAVING LICENSE OF SUCH PRODUCTS. THE TPO IGNORED TH E ASSESSEES SUBMISSIONS DESPITE THE FACT THAT SUFFIC IENT MATERIAL TAKEN FROM THE WEBSITE OF THIS COMPANY WAS PLACED BEFORE HIM IN SUPPORT OF THE CONTENTION. IT CAN BE SEEN FROM PAGE 192 OF THE PAPER BOOK, BEING NOTES TO THE BALA NCE SHEET OF LUCID SOFTWARE LTD., THAT THIS COMPANY DEVELOPED SOFTWARE PRODUCTS IN-HOUSE. THE EXPENDITURE SO INCU RRED ON PRODUCT DEVELOPMENT HAS BEEN DULY CAPITALIZED BY LU CID SOFTWARE LTD. THESE FACTS AMPLY BRING OUT THAT LUCI D SOFTWARE LTD. CANNOT BE CONSIDERED AS COMPARABLE. W E, THEREFORE, DIRECT THE EXCLUSION OF THIS CASE FROM T HE LIST OF COMPARABLES. THE ASSESSEE SUCCEEDS. MEDIASOFT SOLUTIONS LIMITED : 30. THE ASSESSEE HAS NO OBJECTION TO THE INCLUSION OF THIS COMPANY IN THE LIST OF COMPARABLES. MEQASOFT LIMITED (CONSULTING/BLUE ALLEY DIVISION ): 31.1. THE TPO, ON PERUSAL OF DATA OF THIS COMPANY A VAILABLE IN THE PROWESS AND ALSO ON CONSIDERATION OF INFORMA TION RECEIVED U/S 133(6) OBSERVED THAT THIS COMPANY WAS ENGAGED IN SOFTWARE DEVELOPMENT SERVICES UNDER ITS CONSULTI NG DIVISION. THE ASSESSEE OBJECTED TO ITS INCLUSION BE FORE THE TPO ON THE GROUND THAT THERE WAS RESTRUCTURING INAS MUCH AS THERE WAS ACQUISITION OF SOME OTHER COMPANIES DURIN G THE YEAR. NOT CONVINCED WITH THE ASSESSEE'S OBJECTION, THE TPO INCLUDED THIS COMPANY IN THE LIST OF COMPARABLES. 20 ITA NO.431/DEL/2012 31.2. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE RELEVANT MATERIAL ON RECORD, WE FIND FROM THE DIREC TOR'S REPORT OF THIS COMPANY, A COPY OF WHICH IS AVAILABL E ON PAGE 193 OF THE PAPER BOOK, THAT THE FINANCIAL RESULTS F OR THE YEAR INCLUDE THE BUSINESS PERFORMANCE OF VISUAL SOFT TECHNOLOGIES LTD. W.E.F. 1 ST OCTOBER, 2006 CONSEQUENT TO THE AMALGAMATION. THE MUMBAI BENCH OF THE TRIBUNAL IN P ETRO ARALDITE (P) LTD. VS. DCIT [(2013) 154 TTJ (MUM) 17 6] HAS HELD THAT A COMPANY CANNOT BE CONSIDERED AS COMPARABLE BECAUSE OF EXCEPTIONAL FINANCIAL RESULTS DUE TO MERGERS/DEMERG ERS ETC. SINCE THE FINANCIAL RESULTS OF MEGASOFT LTD. HAVE T HE IMPACT OF THE MERGER OF VISUAL SOFTWARE TECHNOLOGIES LTD., W.E.F. 1 ST OCTOBER, 2006, OBVIOUSLY, THIS COMPANY CANNOT BE CO NSIDERED AS COMPARABLE. ACCORDINGLY, THIS COMPANY IS DIRECTE D TO BE EXCLUDED. THE ASSESSEE SUCCEEDS. MINDTREE LIMITED : 32. THE ASSESSEE HAS NO OBJECTION TO THE INCLUSION OF THIS COMPANY IN THE LIST OF COMPARABLES. PERSISTENT SYSTEMS LIMITED : 33. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND P ERUSING THE RELEVANT MATERIAL ON RECORD, WE HOLD THAT THIS COMPANY ALSO CANNOT BE CONSIDERED AS COMPARABLE BECAUSE OF MERGER OF ANOTHER COMPANY INTO IT, WHICH FACT IS EVIDENT F ROM PAGE 196 OF THE PAPER BOOK. IT CAN BE SEEN THAT A SUBSID IARY COMPANY WAS MERGED INTO THIS COMPANY PURSUANT TO JUDGMENT OF HON'BLE BOMBAY HIGH COURT W.E.F. 1.4.06 . BECAUSE OF THE MERGER OF SUBSIDIARY INTO THIS COMPA NY, WE HOLD THAT THE FINANCIAL POSITION OF THIS COMPANY CA NNOT BE CONSTRUED AS NORMAL CAPABLE OF A GOOD COMPARISON. FOLLOWING THE MUMBAI BENCH DECISION IN PETRO ARALDI TE (P) LTD. (SUPRA), WE DIRECT THE EXCLUSION OF THIS COMPANY FR OM THE LIST OF COMPARABLES. THE ASSESSEE SUCCEEDS. QUINTEGRA SOLUTIONS LIMITED : 34. THE ASSESSEE HAS NO OBJECTION TO THE INCLUSION OF THIS COMPANY IN THE LIST OF COMPARABLES. R S SOFTWARE (INDIA) LIMITED : 35. THE ASSESSEE HAS NO OBJECTION TO THE INCLUSION OF THIS COMPANY IN THE LIST OF COMPARABLES. 21 ITA NO.431/DEL/2012 R SYSTEMS INTERNATIONAL LTD. (SEGMENTAL) : 36.1. THE TPO INCLUDED THIS COMPANY IN THE LIST O F COMPARABLES AND DETERMINED ITS OP/OC AT 15.07%. THE ID. AR HAS NO OBJECTION TO THE INCLUSION OF THIS COMPAN Y IN THE LIST OF COMPARABLES. HIS ONLY OBJECTION WAS CONFINE D TO THE CALCULATION OF OP/OC AT 15.07%. HE CONTENDED THAT T HE TPO ERRED IN EXCLUDING THE AMOUNT OF RS. PROVISION FOR DOUBTFUL DEBTS' FROM OPERATING COSTS. 36.2. WE ARE NOT AGREEABLE WITH THE CONTENTION AD VANCED ON BEHALF OF THE ASSESSEE FOR THE REASONS SET OUT BY T HE TPO ON THIS ISSUE AT PAGE 126 OF HIS ORDER. IT HAS BEEN ME NTIONED THAT THE PROVISION FOR DOUBTFUL DEBTS/ADVANCES WAS EXCLU DED BECAUSE THESE WERE NOT RECURRING FOR THE LAST THREE YEARS AND WERE ALSO NOT AT CONSISTENT LEVEL. WE FAIL TO APPRE CIATE AS TO HOW A RS. PROVISION FOR DOUBTFUL DEBTS CAN BE CONSI DERED AS A PART OF OPERATING COST UNLESS IT IS SHOWN THAT THE ACTUAL EXPENDITURE ON ACCOUNT OF BAD DEBTS WAS EQUAL TO SU CH AMOUNT OF PROVISION. NOTHING OF THIS SORT HAS BEEN PROVED ON BEHALF OF THE ASSESSEE. AS SUCH, WE HOLD THAT THE T PO WAS JUSTIFIED IN EXCLUDING THE RUPEE PROVISION FOR DOUB TFUL DEBTS/ADVANCES' FROM TOTAL OPERATING COST. THIS CON TENTION RAISED ON BEHALF OF THE ASSESSEE IS REPELLED. RESUL TANTLY, THIS COMPANY IS HELD TO BE RIGHTLY INCLUDED IN THE LIST OF COMPARABLES WITH THE CORRECT PERCENTAGE OF OP/OC AT 15.07%. THE ASSESSEE FAILS. SASKEN COMMUNICATION TECHNOLOGIES LIMITED (SEGMEN TAL) : 37. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THIS COMP ANY ACQUIRED BOTNIA HITEC OYOY, FINLAND AND ITS TWO WHO LLY OWNED SUBSIDIARY COMPANIES DURING THE YEAR, WHICH F ACT IS APPARENT FROM THE DIRECTOR'S REPORT OF THIS COMPANY AVAILABLE AT PAGE 202 OF THE PAPER BOOK. FOLLOWING THE MUMBAI BENCH DECISION IN PETRO ARALDITE (P) LTD. (SUPRA), WE ORD ER FOR THE EXCLUSION OF THIS COMPANY FROM THE LIST OF COMPARAB LES. THE ASSESSEE SUCCEEDS. SIP TECHNOLOGIES & EXPORTS LIMITED : 38. THE ASSESSEE HAS NO OBJECTION TO THE INCLUSION OF THIS COMPANY IN THE LIST OF COMPARABLES. 22 ITA NO.431/DEL/2012 TATA ELXSI LTD. (SOFTWARE DEVELOPMENT AND SERVICES SEGMENT) : 39.1. THE TPO INCLUDED THIS COMPANY IN THE LIST OF COMPARABLES BY NOTICING THAT ITS 'SOFTWARE DEVELOPM ENT AND SERVICES SEGMENT' MATCHED WITH THE ASSESSEE. ON BEI NG CALLED UPON TO EXPLAIN AS TO WHY THIS COMPANY BE NOT INCLU DED IN THE LIST OF COMPARABLES, THE ASSESSEE STATED THAT T HE NATURE OF ACTIVITY DONE BY THIS COMPANY WAS DIFFERENT INASMUC H AS IT WAS ENGAGED IN R&D ACTIVITIES ALSO WHICH RESULTED I N CREATION OF INTELLECTUAL PROPERTY. NOT CONVINCED WI TH THE ASSESSEE'S SUBMISSIONS, THE TPO INCLUDED THIS SEGME NT OF THE COMPANY IN THE LIST OF COMPARABLES. 39.2. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, WE FIND FROM PAGE NO.206 OF THE PAPER BOOK, WHICH IS ANNEXURE TO THE DIRECTOR'S REPORT OF THIS COMPANY, THAT THE NATURE OF ITS ACTIVITY IS QU ITE DISTINCT FROM THAT OF THE ASSESSEE. IT CAN BE SEEN THAT THIS COMPANY IS INTO DEVELOPMENT OF HARDWARE AND SOFTWARE FOR EMBED DED PRODUCTS SUCH AS MULTIMEDIA AND SOME OTHER ELECTRON ICS, ETC. APART FROM THAT, THIS COMPANY IS ALSO ENGAGED IN MA KING SOME PROGRAMMES DEVELOPING TECHNOLOGY INTELLECTUAL PROPERTY. AS THE NATURE OF ACTIVITY CARRIED OUT BY THE ASSESSEE IN QUESTION IS NOWHERE CLOSE TO THAT OF TATA ELXSI LTD., WE HOLD THAT THIS COMPANY CANNOT BE INCLUDED IN THE LI ST OF COMPARABLES. ACCORDINGLY, THIS COMPANY IS DIRECTED TO BE EXCLUDED. THE ASSESSEE SUCCEEDS. THIRDWARE SOLUTIONS LIMITED (SEGMENTAL) : 40. THE ASSESSEE HAS NO OBJECTION TO THE INCLUSIO N OF THIS COMPANY IN THE LIST OF COMPARABLES. WIPRO LIMITED (IT SERVICES SEGMENT) : 41. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL ON RECORD, WE HAVE ABSOLUTELY NO DOUBT IN OUR MIND THAT THIS COMPANY CANNOT BE CONSIDERED AS COMPARABLE TO THE ASSESSEE INASMUCH AS IT IS A GIAN T COMPANY IN TERMS OF PARAMETERS DISCUSSED ABOVE WHILE DEALIN G WITH THE CASE OF INFOSYS LTD. THE HONBLE DELHI HIGH COU RT IN THE CASE OF AGNITY INDIA TECHNOLOGIES PVT. LTD. (SUPRA) HAS UPHELD THE EXCLUSION OF THIS COMPANY ALSO FROM THE LIST OF COM PARABLES 23 ITA NO.431/DEL/2012 ON THE BASIS OF CERTAIN PARAMETERS, WHICH ARE FULLY APPLICABLE TO THE INSTANT ASSESSEE AS WELL. IT IS, THEREFORE, DIRECTED TO EXCLUDE THIS COMPANY FROM THE LIST OF COMPARABLES. THE ASSESSEE SUCCEEDS. 42. IN VIEW OF THE FOREGOING DISCUSSION, WE SET A SIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF TPO/AO FOR A FRESH DETERMINATION OF ALP OF THE ASSESSEE'S INTERNATIONAL TRANSACTIONS IN CONSONANCE WITH THE D IRECTIONS GIVEN HEREINABOVE IN THE MATTER OF INCLUSION OR EXC LUSION OF THE 26 COMPARABLES COMPANIES TAKEN BY THE TPO AS COMPARABLES. LD. AR RELIED ON THE DECISION OF TOLUNA INDIA PVT. LTD., SUPRA, WHERE THE FUNCTIONS, ASSETS AND RISKS ARE IDENTICAL. TPO HAD SELECTED THOSE VERY 26 COMPANIES AS COMPARABLES IN THE ASSESSEES CASE ALS O. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION IN THE CASE OF TOLUNA INDIA PVT. LTD., SUPRA, WE DIRECT TPO/AO TO FOLLOW THE ABOVE MENTION ED ORDER OF TRIBUNAL IN THE CASE OF TOLUNA INDIA PVT. LTD. IN T HE MATTER OF COMPARABLE COMPANIES AND WORK OUT THE TRANSFER PRICING ADJUSTM ENT, IF ANY, BASED ON THAT. ACCORDINGLY, THIS GROUND IS ALLOWED SUBJECT T O ABOVE OBSERVATIONS. 9. GROUND NO.4 IS REGARDING DEDUCTION U/S 10A AMOUN TING TO RS.2,98,09,829/- WHICH WAS DISALLOWED BY ASSESSING OFFICER BY FOLLOWING THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2006-07, HOLDING THAT THE DEDUCTION U/S 10A WAS NOT ALLOWABLE AS THE RE WAS RECONSTRUCTION OF OLD BUSINESS. THIS WAS OBJECTED BY THE ASSESSEE BEFORE DRP CONTENDING THAT THIS ISSUE HAS BEEN DECIDED IN FAVO UR OF THE ASSESSEE IN 24 ITA NO.431/DEL/2012 ASSESSMENT YEAR 2005-06 BY THE TRIBUNAL AND HIGH CO URT. IN ASSESSMENT YEAR 2006-07, CIT (A) HAS GRANTED RELIEF TO THE ASSESSEE. THE DRP DECLINED TO INTERFERE WITH THE FINDING OF A SSESSING OFFICER ON THE GROUND THAT IT IS NOT KNOWN WHETHER THE DEPARTM ENT HAS FILED AN SLP IN ASSESSMENT YEAR 2005-06 OR NOT. 10. LD. AR FOR THE ASSESSEE SUBMITTED THAT THIS ISS UE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE IN ASSESSMENT YEAR 2005-0 6 BY HONBLE BOMBAY HIGH COURT. THEREFORE, THE ISSUE IS SETTLED IN FAVOUR OF THE ASSESSEE. HENCE, THIS GROUND SHOULD BE ALLOWED. 11. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE RE CORDS. THIS ISSUE HAS BEEN DECIDED BY HON'BLE BOMBAY HIGH COURT IN FA VOUR OF THE ASSESSEE IN ITS OWN CASE. DRP DID NOT DISPUTE THIS. LD. CIT DR DID NOT CONTROVERT THIS FACTUAL ASPECT. THEREFORE, WE HOLD THAT DEDUCTION U/S 10A IS TO BE ALLOWED TO THE ASSESSEE. WE ORDER ACCORDIN GLY. HENCE, THIS GROUND IS DECIDED IN FAVOUR OF THE ASSESSEE. 12. GROUND NO.5 IS RELATING TO DISALLOWANCE U/S 40( A)(IA) AMOUNTING TO RS.8,09,447 MADE ON THE GROUND THAT THOUGH THE TAX HAS BEEN DEDUCTED AT SOURCE BUT IT WAS NOT DEDUCTED AT THE RATES APPLICA BLE. DRP CONFIRMED THE ACTION OF THE ASSESSING OFFICER BY HOLDING THAT THE RE WAS SHORT DEDUCTION OF TDS AND THUS DISALLOWANCE WAS IN ORDER. 25 ITA NO.431/DEL/2012 13. LD. AR FOR THE ASSESSEE ARGUED THAT NO DISALLOW ANCE CAN BE MADE U/S 40(A)(IA) ON ACCOUNT OF SHORT DEDUCTION. DISAL LOWANCE U/S 40(A)(IA) CAN BE MADE ONLY WHEN THERE IS ABSOLUTE FAILURE TO DEDUCT THE TAX. LD. AR RELIED ON THE ORDER OF HON'BLE KOLKATA HIGH COURT I N THE CASE OF CIT VS. S.K. TEKRIWAL REPORTED IN 361 ITR 432 (CAL). LD. CI T DR SUPPORTED THE ORDER OF ASSESSING OFFICER AND DRP. 14. AFTER HEARING BOTH THE SIDES ON THE ISSUE, WE D ELETE THE DISALLOWANCE KEEPING IN VIEW THE DECISION OF HON'BL E KOLKATA HIGH COURT IN THE CASE OF CIT VS. S.K. TEKRIWAL, CITED SUPRA, ACCORDING TO WHICH SHORT DEDUCTION OF TDS CANNOT BE THE BASIS FOR DISA LLOWANCE U/S 40(A)(IA) OF THE ACT. THERE IS NO DISPUTE THAT DISALLOWANCE W AS MADE FOR SHORT DEDUCTION OF TDS. HENCE, THIS DISALLOWANCE OF RS. 8 ,09,447/- IS HEREBY DELETED. 15. GROUND NO.6 RELATES TO THE DISALLOWANCE OF RS.1 ,14,030/- ON ACCOUNT OF COMPUTER CONSUMABLES AND SMALL ACCESSORI ES AND RS.24,469/- ON ACCOUNT OF REPAIRS AND MAINTENANCE. ASSESSING OF FICER HELD PEN WRITERS, HDR RAM, HARD DISCS, PCI CARD, HEAD PHONE, WEB CAMERA, I POD, UPGRADATION OF PACKETEERS AS CAPITAL IN NATURE AND ALLOWED DEPRECIATION. DRP CONFIRMED THE ACTION OF ASSESSING OFFICER. 16. LD. AR FOR THE ASSESSEE DREW OUR ATTENTION TO T HE SUBMISSIONS MADE BEFORE DRP SUBMITTING THAT NATURE OF EXPENSES WERE REVENUE AND 26 ITA NO.431/DEL/2012 NOT CAPITAL, BUT FAILED TO DEMONSTRATE AS TO HOW SU CH EXPENSES WERE NOT CAPITAL IN NATURE. 17. AFTER HEARING BOTH THE SIDES, WE HOLD THAT ASSE SSEE FAILED TO DEMONSTRATE HOW THESE EXPENSES WERE REVENUE IN NATU RE. WE HOLD THAT THE DISALLOWANCE WAS CORRECTLY MADE. HENCE, THIS GR OUND OF ASSESSEES APPEAL IS DISMISSED. 18. GROUND NO.7 RELATES TO THE DISALLOWANCE OF RS.9 ,25,768/- ON ACCOUNT OF ADVANCES WRITTEN OFF. THE DISALLOWANCE W AS MADE BY ASSESSING OFFICER AS IT WAS EXCESS TDS WHICH WAS CL AIMED AS WRITE-OFF. DRP DID NOT INTERFERE. 19. LD. AR FOR THE ASSESSEE APART FROM SUBMITTING T HAT SUCH WRITE-OFF SHOULD BE ALLOWED AS BUSINESS LOSS U/S 28 COULD NOT SHOW WITH EVIDENCE IN THE NATURE OF ADVANCE AND CIRCUMSTANCES UNDER WH ICH IT WAS WRITTEN- OFF. THEREFORE THIS GROUND OF APPEAL IS ALSO DISMIS SED. 20. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 14 TH DAY OF NOVEMBER, 2014. SD/- SD/- (C.M. GARG) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 14 TH DAY OF NOVEMBER, 2014 TS 27 ITA NO.431/DEL/2012 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A) 5.CIT(ITAT), NEW DELHI. AR/ITAT