DCIT, Bangalore V. M/s July Systems & Technologies Pvt. Ltd., Bangalore

ITA 479/BANG/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4158 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 17-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: L BHARATH ACS
• Keywords: Related party transaction; Transfer pricing; Rectification of order; International transaction; Wholly owned subsidiary; Bad and doubtful debts
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER IT(TP)A NO.368/BANG/2016 & CO NO.13/BANG/2017 [IN IT(TP)A NO.479/BANG/2016] ASSESSMENT YEAR : 2011 - 12 M/S. JULY SYSTEMS & TECHNOLOGIES PVT. LTD., # 17/9C, 17/4C, 4 TH FLOOR, MARUTHI CHAMBERS, ROPENA AGRAHARA, HOSUR ROAD, BANGALORE 560 076. PAN : AABCB 6543M VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1), BANGALORE. APP EL LANT / CROSS O BJECTOR RESPONDENT IT(TP)A NO.479/BANG/2016 ASSESSMENT YEAR : 2011 - 12 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1), BANGALORE. VS. M/S. JULY SYSTEMS & TECHNOLOGIES PVT. LTD., BANGALORE 560 076. PAN : AABCB 6543M APPELLANT RESPONDE NT ASSESSEE BY : SHRI L. BHARATH, ACS REVENUE BY : MS. NEERA MALHOTRA, CIT(DR - II)(ITAT), BENGALURU. DATE OF HEARING : 08 .10.2018 DATE OF PRONOUNCEMENT : 31 .10.2018 IT(TP)A NOS.368 & 479/BANG/2016 & CO 13/BANG/2017 PAGE 2 OF 12 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT IT(TP)A NO.368/B/16 IS AN APPEAL BY THE ASSESS EE, WHILE IT(TP)A NO.479/B/16 IS AN APPEAL BY THE REVENUE. BOTH THES E APPEALS ARE DIRECTED AGAINST THE FINAL ORDER OF ASSESSMENT DATED 31.12.2 015 PASSED BY THE DCIT, CIRCLE 4(1)(1), BANGALORE RELATING TO ASSESSM ENT YEAR 2011-12. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION IN CO NO.1 3/BANG/2017 AGAINST THE VERY SAME ORDER. 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY INCORP ORATED UNDER THE COMPANIES ACT, 1956. THE ASSESSEE IS A WHOLLY OWNED SUBSIDIARY OF JULY SYSTEMS INC., US [JULY US FOR SHORT]. THE ASSESSE E WAS REGISTERED AS A UNIT UNDER THE SOFTWARE TECHNOLOGY PARKS ('STP') SC HEME. THE ASSESSEE PROVIDES SERVICES INCLUDING SOFTWARE DEVELOPMENT, T ECHNICAL SUPPORT SERVICES, POST SALES MAINTENANCE, TROUBLE SHOOTING ETC. (REFERRED TO AS 'TECHNOLOGY SUPPORT SERVICES' FOR BREVITY) TO JULY US AND IS REMUNERATED ON A COST-PLUS 15% BASIS PURSUANT TO A 'SERVICES AGREE MENT' WITH JULY US. 3. FOR THE AY 2011-12, THE ASSESSEE FILED ITS RETUR N OF INCOME ON 30.11.2011 DECLARING INCOME OF RS. 34,91 ,482/- UND ER THE NORMAL PROVISIONS OF THE ACT, AFTER CLAIMING RELIEF OF RS. 5,94,46,935/-UNDER SECTION 10A OF THE INCOME-TAX ACT, 1961 ('THE ACT'). THE CA SE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. SINCE THE ASSESSEE HAD ENTER ED INTO INTERNATIONAL TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISE ('AE'), JULY US, A REFERENCE WAS MADE BY THE ASSESSING OFFICER ('AO') TO THE TRANSFE R PRICING OFFICER (TPO') UNDER SECTION 92CA(3) OF THE ACT. NOTICES WERE ISS UED BY THE AO AND THE TPO ON VARIOUS OCCASIONS AND THE ASSESSEE DULY RESP ONDED TO THE SAME FROM TIME TO TIME. IT(TP)A NOS.368 & 479/BANG/2016 & CO 13/BANG/2017 PAGE 3 OF 12 4. THE TPO PASSED AN ORDER UNDER SECTION 92CA(3) OF THE ACT DATED 21.01.2015 REJECTING THE TP STUDY UNDERTAKEN BY THE ASSESSEE. IN THE SAID ORDER, THE TPO PROPOSED THE FOLLOWING ADJUSTMENT:- INTERNATIONAL TRANSACTION ARM'S LENGTH PRICE AS DETERMINED IN ORDER UNDER SECTION 92CA(3) PRICE RECEIVED ADJUSTMENT UNDER SECTION 92CA PROVISIONOF TECHNOLOGY SUPPORT SERVICES 40,57,65,058 34,41,24,495 6,16,40,563 TOTAL 6,16,40,563 5. HOWEVER ON PERUSAL OF THE ABOVE ORDER BY THE ASS ESSEE, IT WAS NOTICED THAT THE TPO HAD COMPUTED THE ARM'S LENGTH PRICE INCORRECTLY BY ADOPTING AN INCORRECT AMOUNT AS OPERATING COST; ON HIGHLIGHTING THIS ASPECT, THE ASSESSEE FILED A LETTER REQUESTING FOR A RECTIF ICATION OF THE ORDER UNDER SECTION 92CA(5) R.W.S. 154 OF THE ACT. THE TPO ACCE PTED THE CONTENTION OF THE ASSESSEE AND PASSED A RECTIFIED ORDER DATED 10. 03.2015 PROPOSING THE FOLLOWING ADJUSTMENT:- INTERNATIONAL TRANSACTION ARM'S LENGTH PRICE AS DETERMINED IN ORDER UNDER SECTION 92CA(3) PRICE RECEIVED ADJUSTMENT UNDER SECTION 92CA PROVISION OF TECHNOLOGY SUPPORT SERVICES 37,89,74,679 34,41,24,495 3,48,50,184 TOTAL 3,48,50,184 6. THE AO PASSED A DRAFT ASSESSMENT ORDER DATED 23. 02.2015 UNDER SECTION 143(3) OF THE ACT. THE AO ALSO MADE, INTER ALIA, THE FOLLOWING DISALLOWANCES:- IT(TP)A NOS.368 & 479/BANG/2016 & CO 13/BANG/2017 PAGE 4 OF 12 PARTICULARS AMOUNT (IN RS.) DISALLOWANCE UNDER SECTION 10A OF THE ACT ON THE BA SIS THAT: ASSESSEE HAD RECEIVED CERTAIN EXPORT PROCEEDS BEYOND 6 MONTHS OF THE DATE OF THE INVOICE IN COMPUTING THE RELIEF UNDER SECTION 10A OF THE AC T, EXPENSES INCURRED IN FOREIGN CURRENCY WERE NOT REDUCED FROM THE EXPORT TURNOVER ALONE 2,40,19,064 TRANSFER PRICING ADJUSTMENT 6,16,40,563 7. CONSIDERING THE TRANSFER PRICING ADJUSTMENT AN D THE ABOVE DISALLOWANCES, THE AO PROPOSED TO ASSESS THE TOTAL INCOME OF THE ASSESSEE AT RS. 8,87,39,844/-. THE AO ALSO DID NOT GIVE EFFECT TO THE REVISED TP ORDER DATED 10.03.2015. 8. AGGRIEVED BY THE DRAFT ASSESSMENT ORDER, THE ASS ESSEE FILED ITS OBJECTIONS BEFORE THE DISPUTE RESOLUTION PANEL ('HO N'BLE DRP') UNDER SECTION 144C(2) OF THE ACT. THE ASSESSEE FILED DETA ILED SUBMISSIONS OBJECTING TO THE ADDITIONS UNDERTAKEN BY THE AO. BA SED ON THE SUBMISSIONS MADE BY THE ASSESSEE, THE DRP ISSUED ITS DIRECTIONS VIDE COMMUNICATION DATED 20.11.2015. IN SUMMARY, THE DRP PARTIALLY SUS TAINED THE ASSESSEES OBJECTIONS AS FOLLOWS: A. TRANSFER PRICING ISSUES - (I) THE DRP UPHELD THE APPLICATION OF THE TURNOVER FILTER AND DIRECTED THAT COMPANIES WHOSE TURNOVER WAS BEYOND R S. 200 CRORE SHOULD BE EXCLUDED FROM THE LIST OF COMPA RABLES IDENTIFIED BY THE TPO. IT(TP)A NOS.368 & 479/BANG/2016 & CO 13/BANG/2017 PAGE 5 OF 12 (II) THE DRP HELD THAT OPERATING PROFIT MARGINS OF THE ASSESSEE AND COMPARABLE COMPANIES SHOULD BE COMPUTE D AFTER CONSIDERING FOREIGN EXCHANGE GAIN / LOSS AS O PERATING IN NATURE. (III) THE DRP HELD THAT NEGATIVE WORKING CAPITAL A DJUSTMENT SHOULD NOT BE UNDERTAKEN SINCE THE APPELLANT WAS A CAPTIVE SERVICE PROVIDER BEARING MINIMAL RISKS. B. CORPORATE TAX ISSUES THE DRP HELD THAT THE AO SHOULD COMPUTE RELIEF UNDER SECTION 10A OF THE ACT BY: (I) CONSIDERING EXPORT PROCEEDS RECEIVED WITHIN 12 MONTHS OF THE DATE OF THE INVOICE, FOR THE PURPOSE OF RELIEF. (II) EXCLUDING EXPENSES INCURRED IN FOREIGN CURREN CY BOTH FROM THE EXPORT TURNOVER AND THE TOTAL TURNOVER. C. THE DRP HELD THAT REVISED TPO ORDER SHOULD BE CONSIDERED BY THE AO WHILE PASSING THE ASSESSMENT O RDER. 9. PURSUANT TO THESE DIRECTIONS, THE AO PASSED THE FINAL ASSESSMENT ORDER UNDER SECTION 143(3) READ WITH SECTION 144C O F THE ACT DATED 31.12.2015. HOWEVER, THE AO PASSED THE SAID ORDER W ITHOUT GIVING EFFECT TO THE ORDER OF THE DRP. NOTICING THAT THE AO HAD NOT GIVEN EFFECT TO THE DIRECTIONS OF THE DRP, THE ASSESSEE FILED A LETTER ON 04.02.2016 REQUESTING FOR A RECTIFICATION OF THE SAID ORDER. HOWEVER, THE AO DID NOT PASS ANY ORDER RECTIFYING THE MISTAKE APPARENT ON RECORD. 10. THE ASSESSEE, BEING AGGRIEVED BY THE AFORESAID ORDER OF THE AO , TO THE EXTENT PREJUDICIAL TO IT HAS PREFERRED AN APPEA L ON THE FOLLOWING GROUNDS OF APPEAL:- IT(TP)A NOS.368 & 479/BANG/2016 & CO 13/BANG/2017 PAGE 6 OF 12 1. THE ORDER PASSED BY THE LAO IS BAD IN LAW SINCE , THAT THE SAID ORDER HAS NOT CONSIDERED THE DIRECTIONS OF THE HON. DRP AND THE REQUEST MADE BY THE APPELLANT FOR RECTI FICATION OF THE SAID ORDER. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ORDER PASSED BY THE HON. DRP IS BAD IN LAW, TO THE EXTENT THE SAME IS PREJUDICIAL TO THE APPELLANT. 3. THE HON'BLE DRP ERRED IN CONFIRMING THE ORDER OF THE LEARNED TPO REJECTING THE TRANSFER PRICING DOCUMENT ATION MAINTAINED BY THE APPELLANT ON THE BASIS THAT THE INFORMATION OR DATA USED BY THE COMPANY FOR THE COMPUTATION OF THE ARM'S LENGTH PRICE IS NOT RELIAB LE OR CORRECT. 4. THE HON'BLE DRP AND THE LAO ERRED IN CONFIRMING THE ORDER OF THE LEARNED TPO IN REJECTING THE COMPARABL E COMPANIES IDENTIFIED BY THE APPELLANT ON THE BASIS THAT CERTAIN COMPANIES SELECTED BY THE APPELLANT AS COMP ARABLE HAD FAILED THE RELATED PARTY TRANSACTIONS FILTER, F OREX TO SALES FILTER, EMPLOYEE COST FILTER OR DIFFERENT FINANCIAL YEAR. 5. THE HON'BLE DRP AND THE LAO ERRED IN CONFIRMING THE ORDER OF THE LEARNED TPO WHICH INVOLVED ADOPTION OF INAPPROPRIATE FILTERS FOR SELECTION OF COMPARABLE C OMPANIES THEREBY MAKING THE ARM'S LENGTH PRICE DETERMINED BY THE LD. TPO INCORRECT IN LAW AND IN FACT. 6. THE LEARNED ASSESSING OFFICER, BASED ON THE DIRE CTIONS OF THE HONORABLE DISPUTE RESOLUTION PANEL, ERRED IN CONFIRMING THE ORDER OF THE LEARNED TRANSFER PRICIN G OFFICER WHICH HAS CONSIDERED COMPANIES THAT ARE FUNCTIONALL Y DIFFERENT VIS--VIS THE FUNCTIONS OF THE APPELLANT. 7. THE HON'BLE DRP AND THE LAO ERRED IN CONFIRMING THE ORDER OF THE LEARNED TPO WHEREIN TPO ERRED IN THE DETERMINATION OF THE MARGINS OF THE COMPARABLE COMP ANIES BY CONSIDERING PROVISION FOR DOUBTFUL DEBTS AS A NO N- OPERATING EXPENSE. IT(TP)A NOS.368 & 479/BANG/2016 & CO 13/BANG/2017 PAGE 7 OF 12 8. THE HON'BLE DRP AND THE LAO ERRED IN CONFIRMING THE ORDER OF THE LEARNED TPO WHICH FAILED TO MAKE APPRO PRIATE ECONOMIC ADJUSTMENTS FOR THE DIFFERENCES IN MARKET RISK ASSUMED. 9. WITHOUT PREJUDICE TO THE DIRECTION BY THE DRP, T HAT IN COMPUTATION OF THE RELIEF UNDER SECTION 10A, THE TR AVELLING, CONVEYANCE AND COMMUNICATION CHARGES ARE TO BE REDU CED FROM BOTH THE EXPORT AND TOTAL TURNOVER, THE HON'BL E DRP ERRED IN NOT SPECIFICALLY DIRECTING THAT IT WAS INC ORRECT TO REDUCE THE TRAVELLING, CONVEYANCE AND COMMUNICATION CHARGES FROM THE EXPORT TURNOVER. ON THE ABOVE AND SUCH OTHER GROUNDS AS MAY BE URGED AT THE TIME OF HEARING YOUR APPELLANT PRAYS YOUR HONOUR TO CONS IDER THE FACTS AND CIRCUMSTANCES OF THE CASE AND RENDER JUSTICE. 11. THE REVENUE, AGGRIEVED BY THE RELIEF ALLOWED BY THE DRP, HAS PREFERRED APPEAL BEFORE THE TRIBUNAL ON THE GROUNDS OF APPEAL AS FOLLOWS:- 1. THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL ARE OPPOSED TO LAW AND FACTS OF THE CASE. 2. WHETHER THE DRP IS RIGHT IN DELETING THE ADDITIO N MADE BY THE AO ON BELATED EXPORT RECEIPTS OF RS. 12,44,01,7 08/- KEEPING IN VIEW OF THE RBI'S CIRCULAR AS AGAINST TH E PROVISIONS ENVISAGED IN SECTION 10A OF THE ACT. 3. THE HON'BLE DRP ERRED IN DIRECTING THE AO TO RED UCE THE EXPENSES BOTH FROM THE EXPORT TURNOVER AS WELL AS T OTAL TURNOVER WHEN THERE IS NO PROVISION IN SECTION 10A WHICH REQUIRES THE SAID EXPENSES TO BE REDUCED FROM THE T OTAL TURNOVER? 4. THE HON'BLE DRP ERRED IN HOLDING THAT FOREIGN EX CHANGE LOSS OR GAIN IS A PART OF OPERATING EXPENSE OR OPER ATING INCOME, AS THE CASE MAY BE, WHEN THE TPO HAS EXCLUD ED THIS DATA FROM THAT OF THE COMPARABLES. IT(TP)A NOS.368 & 479/BANG/2016 & CO 13/BANG/2017 PAGE 8 OF 12 5. WHETHER THE DRP IS CORRECT IN FOREIGN EXCHANGE FLUCTUATION AS OPERATING IN NATURE, WHILE TREATING FOREIGN EXCHANGE FLUCTUATION NON-OPERATING IN NATURE AS APP LIED BY THE TPO. 6. WHETHER THE DRP IS CORRECT IN HOLDING THAT THE F OREIGN EXCHANGE TRANSACTION ARE TO BE CONSIDERED AS OPERAT ING IN NATURE, WHEN THE RULE 10B(2)(D) STIPULATES THAT THE NET PROFIT MARGIN REALIZED BY THE TAXPAYER IN THE INTER NATIONAL TRANSACTIONS SHALL ALONE BE COMPUTED FOR COMPARABIL ITY ANALYSIS UNDER TNMM. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND / OR DELETE ANY OF THE GROUND/ MENTIONED ABOVE. 12. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE ADDRESSED ARGUMENTS ON GROUND NO.1 RAISED IN ASSESSEES APPEA L. IT WAS SUBMITTED THAT THE FINAL ORDER OF ASSESSMENT PASSED BY THE AO DATED 31.12.2015 IS BAD IN LAW. IN THIS REGARD, OUR ATTENTION WAS DRAW N TO THE FACT THAT THE AO ORIGINALLY PASSED A DRAFT ASSESSMENT ORDER ON 23.02 .2015 WHEREIN HE INCORPORATED THE TP ADJUSTMENT AS SUGGESTED BY THE TPO IN THE ORDER PASSED U/S. 92CA OF THE ACT FOR THE RELEVANT ASSESS MENT YEAR. 13. THE ASSESSEE PREFERRED OBJECTIONS BEFORE THE DR P AGAINST THE DRAFT ORDER OF ASSESSMENT AND THE DRP GAVE ITS DIRECTIONS VIDE ORDER 20.11.2015. IT WAS POINTED OUT THAT AS PER THE PRO VISIONS OF SECTION 144C(5) OF THE ACT, THE DIRECTIONS GIVEN BY THE DRP ARE BINDING ON THE AO AND IN TERMS OF SECTION 144C(13) OF THE ACT, THE AO WAS OBLIGED TO PASS A FINAL ORDER OF ASSESSMENT IN ACCORDANCE WITH THE DI RECTIONS OF THE DRP. THE LD. COUNSEL FOR THE ASSESSEE POINTED OUT THAT I N THE PRESENT CASE, THE FINAL ORDER OF ASSESSMENT DOES NOT INCORPORATE THE DIRECTIONS OF THE DRP AND WAS A VERBATIM REPETITION OF THE DRAFT ORDER OF ASSESSMENT DATED 23.02.2015. IT WAS SUBMITTED THAT AS PER THE PROVI SIONS OF SECTION 144C OF IT(TP)A NOS.368 & 479/BANG/2016 & CO 13/BANG/2017 PAGE 9 OF 12 THE ACT, A FINAL ORDER OF ASSESSMENT IN CONFORMITY WITH THE DIRECTIONS OF THE DRP HAS TO BE PASSED WITHIN ONE MONTH FROM THE END OF MONTH IN WHICH THE DIRECTIONS ARE ISSUED BY THE DRP. SINCE THE IM PUGNED ORDER IS NOT IN CONFORMITY WITH THE PROVISIONS OF SECTION 144C OF T HE ACT, THE SAME IS TO BE HELD AS BAD IN LAW. THE LD. COUNSEL FOR THE ASSESS EE PLACED RELIANCE ON THE DECISION OF THE ITAT BANGALORE BENCH IN THE CAS E OF SOFTWARE PARADIGMS INFOTECH (P.) LTD. V. ACIT [2018] 89 TAXM ANN.COM 339 (BANG. TRIB.) WHEREIN ON AN IDENTICAL OBJECTION, THE TRIBUNAL QU ASHED THE FINAL ORDER OF ASSESSMENT. 14. THE LD. DR, HOWEVER, WHILE NOT DISPUTING THE FA CTUAL POSITION AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, SU BMITTED THAT FAIR ORDER OF ASSESSMENT CANNOT BE QUASHED, BUT AT BEST IT CAN BE SET ASIDE DIRECTING THE AO TO PASS THE FINAL ORDER OF ASSESSMENT IN CONFORM ITY WITH THE DRPS DIRECTIONS. IN THIS REGARD THE LEARNED DR RELIED ON A DECISION OF THE ITAT DELHI IN THE CASE OF H & M HENNES & MAURITZ INDIA ( P) LTD. VS. ACIT (2012) 25 TAXMANN.COM 510 (DEL) WHEREIN THE HONBLE DELHI BENCH OF ITAT REMANDED THE ISSUE BACK TO AO TO RECONSIDER ISSUE O F TRANSFER PRICING IN ACCORDANCE WITH LAW. 15. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE F IND THAT ON IDENTICAL FACTS, THIS TRIBUNAL IN THE CASE OF SOFTWARE (SUPRA ) HAS QUASHED THE FINAL ORDER OF ASSESSMENT OBSERVING AS FOLLOWS:- 3.3.1 WE HAVE HEARD THE RIVAL CONTENTION OF BOTH PARTIES IN THE MATTER AND PERUSED AND CAREFULLY CONSIDERED THE MAT ERIAL ON RECORD. THE UNDISPUTED FACTS ON RECORD, AS BROUGHT OUT BY THE DISCUSSIONS ABOVE, IS THAT THE AO, AS PER LAW, WAS REQUIRED TO PASS THE FINAL ORDER OF ASSESSMENT DATED 17/1/2014 FOR ASST. YEAR 2009-10 U/S 143(3) R.W.S 144C OF THE ACT IN CONFORM ITY WITH THE DIRECTIONS ISSUED BY THE DRP U/S 144C(5) OF THE ACT , WHICH ARE BINDING ON HIM AS PER SECTION 144C(10) THEREOF AND WITHIN THE IT(TP)A NOS.368 & 479/BANG/2016 & CO 13/BANG/2017 PAGE 10 OF 12 TIME PRESCRIBED U/S 144C(13) OF THE ACT. WE FIND TH AT INSTEAD OF PASSING THE FINAL ORDER OF ASSESSMENT AS REQUIRED B Y LAW, THE AO PASSED THE IMPUGNED FINAL ORDER OF ASSESSMENT DATED 17/1/2014 U/S 143(3) R.W.S 92CA OF THE ACT; WHICH, AS CONTEND ED BY THE ID AR, IS IDENTICAL TO THE DRAFT ORDER OF ASSESSMENT P ASSED ON 14/3/2013 BY ONLY INCORPORATING THIS TPO'S PROPOSAL S AND , THEREBY EVIDENTLY GIVING THE DRP'S MANDATORY DIRECT IONS ISSUED U/S 144C(5) OF THE ACT A COMPLETE GO-BY. IN OUR VIE W, IT IS FACTUALLY ESTABLISHED THAT THE AO IN THE FINAL ORDE R OF ASSESSMENT DATED 17/1/2014 HAS NOT GIVEN EFFECT TO OR CARRIED OUT THE BINDING DIRECTIONS OF THE DRP AS REQUIRED U/S 144C(10) WITH IN THE TIME SPECIFIED U/S 144C(13) OF THE ACT; WHICH IS A CLEAR VIOLATION OF THE BINDING PROVISIONS OF SEC. 144C(10) AND (13) OF THE ACT. THEREFORE, IN OUR CONSIDERED OPINION, THE CONDUCT O F THE AO/TPO IN PASSING THE IMPUGNED FINAL ORDER OF ASSESSMENT D ATED 17/1/2014 IS A CLEAR CASE OF DEFIANCE AND DISREGARD TO THE BINDING DIRECTIONS OF THE HIGHER AUTHORITIES, I.E, THE DRP IN THE CASE ON HAND. IN FACT, IN THE IMPUGNED ORDER DATED 17/1/201 4 THERE IS NOT EVEN A SINGLE REFERENCE TO THE DRP'S DIRECTIONS ISS UED US/ 144C(5) OF THE ACT VIDE ORDER DATED 30/12/2013. 3.3.2 IN THE FACTUAL AND LEGAL MATRIX OF THE CASE ON HAND, AS DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE IMPUGNED FINAL ORDER OF ASSESSMENT FOR ASST. YEAR 2008-09 PA SSED U/S 143(3) R.W.S 92CA OF THE ACT BY THE AO, IN VIOLATION OF TH E EXPRESS MANDATORY PROVISIONS OF SEC. 144C(10) AND (13) OF T HE ACT BY NOT PASSING THE IMPUGNED ORDER IN PURSUANCE OF AND IN C ONFORMITY WITH THE BINDING DIRECTIONS OF THE DRP ISSUED U/S 1 44C(5) OF THE ACT, WITHIN THE TIME SPECIFIED FOR THIS PURPOSE, HA S RENDERED THE SAID IMPUGNED FINAL ORDER OF ASSESSMENT UNSUSTAINAB LE IN LAW. WE, THEREFORE, QUASH THE IMPUGNED FINAL ORDER OF AS SESSMENT FOR ASST. YEAR 2009-10 PASSED BY THE AO U/S 143(3) R.W. S 92CA OF THE ACT DATED 17/1/2014 IN THE CASE ON HAND. W HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY, GROUND NO. 17 OF ASSESSE E'S APPEAL IS ALLOWED. 16. RESPECTFULLY FOLLOWING THE AFORESAID VIEW OF TH E TRIBUNAL, WE QUASH THE IMPUGNED ORDER OF ASSESSMENT. SINCE THE IMPUGN ED ORDER OF ASSESSMENT IS QUASHED ON THE GROUND THAT THE SAME I S NOT IN CONFORMITY IT(TP)A NOS.368 & 479/BANG/2016 & CO 13/BANG/2017 PAGE 11 OF 12 WITH THE PROVISIONS OF SECTION 144C OF THE ACT AND FURTHER ON THE GROUND THAT THE TIME FOR PASSING THE FINAL ORDER OF ASSESS MENT IS BARRED BY TIME, WE ARE OF THE VIEW THAT THE OTHER ISSUES RAISED BY THE ASSESSEE IN ITS GROUNDS OF APPEAL AND THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL DOES NOT REQUIRE ANY CONSIDERATION. AS FAR AS THE DECISION CITED BY THE LEARNED DR IN THE CASE OF H & M HENNES & MAURITZ INDIA (P) LTD. (SUPRA) IS CONCERNED, WE FIND THAT IN THE SAID DECISION, THE COUNSEL FOR THE ASSESSEE HAS IN PARA 3.8 OF THE SAID ORDER PRAYED FOR SETTING ASIDE THE FINA L ORDER OF ASSESSMENT OF AO TO PASS ORDERS IN ACCORDANCE WITH THE DIRECTIONS OF THE DRP. THUS IT IS A CASE OF CONCESSION BY THE ASSESSEE AND NOT ON THE BASIS OF ARGUMENTS ADVANCED BY THE PARTIES. THE LAW IS WELL SETTLED T HAT A DECISION ON CONCESSION OF THE COUNSEL CANNOT BE REGARDED AS A P RECEDENT. THEREFORE THE DECISION CITED BY THE LEARNED DR DOES NOT SUPPO RT THE CASE OF THE REVENUE. 17. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS AL LOWED AS INDICATED ABOVE, WHILE THE CO OF THE ASSESSEE AND APPEAL BY T HE REVENUE ARE DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 31 ST DAY OF OCTOBER, 2018. SD/- SD/- ( A.K. GARODIA ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 31 ST OCTOBER, 2018. / D ESAI S MURTHY / IT(TP)A NOS.368 & 479/BANG/2016 & CO 13/BANG/2017 PAGE 12 OF 12 COPY TO: 1. THE ASSESSEE 2. THE RE VENUE 3. THE CIT 4. THE CI T(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.