M/s Subex Limited, Bangalore V. Deputy Commissioner of Income Tax, Bangalore

ITA 572/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7372 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 10-03-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R N PARBAT
• Assessee Lawyers: AJAY ROTI
• Keywords: Transfer pricing; International transaction; Initiation of penalty proceedings
• Section: 143(3); 10AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI VIJAY PAL RAO, JUDICIAL MEMBER IT (TP) A NO. 572/BANG/2017 ASSESSMENT YEAR : 201 2 - 1 3 M/S. SUBEX LIMITED, RMZ ECOWORLD, DEVARABISANAHALLI, OUTER RING ROAD, BANGALORE 560 037. PAN: AABCS 9255R VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 6(1)(2), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI AJAY ROTI, CA REVENUE BY : SHRI R.N. PARBAT, CIT - 3(DR) DATE OF HEARING : 2 4 . 10 .201 7 DATE OF PRONOUNCEMENT : 26 .10 .2017 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ASSESSMENT ORDER DATED 11.01.2017 PASSED BY THE AO U/S. 143(3) R.W.S. 144C (13) OF I.T. ACT, 1961 FOR ASSESSMENT YEAR 2012-13. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. THE GROUNDS STATED HEREUNDER ARE INDEPENDENT OF AND WITHOUT PREJUDICE TO ONE ANOTHER. THE APPELLANT SUBMITS AS UNDER: 1. ADJUSTMENTS TO THE EXPORT TURNOVER FOR THE PURPO SE OF COMPUTING DEDUCTION UNDER SECTION 10AA OF THE INCOME-TAX ACT, 1961 ('THE ACT') 1.1. THE LD. DEPUTY COMMISSIONER OF INCOME-TAX - CI RCLE 6 (1)(2), BANGALORE [DCIT' OR 'AO'] ERRED IN HOLDING THAT IN TERNET, TRAVELLING EXPENSES AND PRODUCT MARKETING EXPENSES AMOUNTING T O INR 23,39,933, INR 3,83,74,585 AND INR 6,03,461, RESPEC TIVELY, WERE DEDUCTIBLE FROM THE EXPORT TURNOVER OF THE APPELLAN T FOR THE PURPOSE OF COMPUTATION OF DEDUCTION UNDER SECTION 10AA OF THE ACT. THE HON'BLE DISPUTE RESOLUTION PANEL - 2, BANGALORE (DRP' OR ' LD. PANEL') ERRED IT(TP)A NO.572/BANG/2017 PAGE 2 OF 7 IN MERELY DIRECTING THE AO TO REDUCE THE CORRESPOND ING AMOUNT FROM THE TOTAL TURNOVER OF THE APPELLANT, WITHOUT RULING AS TO WHETHER AFOREMENTIONED EXPENSES OUGHT TO BE EXCLUDED FROM T HE EXPORT TURNOVER IN THE FIRST PLACE. 1.2. THE HON'BLE DRP ERRED IN NOT FOLLOWING THE ORD ERS OF THE HON'BLE INCOME-TAX APPELLATE TRIBUNAL ['ITAT'] IN THE APPEL LANT'S OWN CASE FOR AY 2009-10 AND AY 2010-11, WHEREIN THE HON'BLE ITAT HAD HELD THAT CERTAIN EXPENSES SHOULD NOT BE EXCLUDED FROM E XPORT TURNOVER WHILE COMPUTING THE DEDUCTION AVAILABLE UNDER SECTI ON 10AA OF THE ACT. 2. ASSESSMENT AND REFERENCE TO THE TRANSFER PRICING OFFICER ARE BAD IN LAW 2.1. THE LD. AO ERRED IN MAKING A REFERENCE TO THE DEPUTY COMMISSIONER OF INCOME-TAX, TRANSFER PRICING - RANG E 2(2)(2) ['TPO'], SINCE, HE HAS NOT RECORDED AN OPINION THAT ANY OF THE CONDITIONS IN SECTION 92C(3) OF THE ACT, WERE SATIS FIED IN THE INSTANT CASE. ACCORDINGLY, THE ORDER PASSED BY THE TPO IS WITHOUT JURISDICTION. THE HON'BLE DRP ERRED IN UPHOLDING THE ACTIONS OF THE L D. AO. 2.2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE TPO ERRED IN NOT DEMONSTRATING THAT THE MOTIVE OF T HE APPELLANT WAS TO SHIFT PROFITS OUTSIDE INDIA BYMANIPULATING THE P RICES CHARGED IN ITS INTERNATIONAL TRANSACTIONS, WHICH IS A PREREQUISITE CONDITION TO MAKE ANY ADJUSTMENT UNDER THE PROVISION OF CHAPTER X OF THE ACT. THE HON'BLE DRP ERRED IN UPHOLDING THE ACTIONS OF THE A O / TPO. 2.3. THE ORDER PASSED BY THE AO IS WITHOUT JURISDIC TION, INSOFAR AS IT PURPORTS TO GIVE EFFECT TO AN INVALID ORDER OF THE TPO. THE HON'BLE DRP ERRED IN UPHOLDING THE ACTIONS OF THE LD. AO /T PO. 3. DETERMINATION OF ARM'S LENGTH INTEREST RATE FOR LOAN GRANTED TO ASSOCIATED ENTERPRISE 3.1. THE AO / TPO ERRED IN DISREGARDING THE METHODO LOGY APPLIED BY THE APPELLANT FORBENCHMARKING THE RECEIPT OF INTERE ST ON LOAN PROVIDED TO ITS ASSOCIATED ENTERPRISE ('AE'). IN DO ING SO THE TPO PROPOSED AN ADJUSTMENT OF INR 22,196,599. THE HON'B LE DRP ERRED IN UPHOLDING THE ACTIONS OF THE TPO. 3.2. THE AO / TPO ERRED ON FACTS AND IN LAW IN COMP ARING THE INTEREST RATE OF 6% CHARGED BY THE APPELLANT WITH THE ANNUAL IZED AVERAGE YIELD RATE AS PROVIDED BY CRISIL LTD I.E. 14.47% FOR AY 2 012-13. THE HON'BLE DRP ERRED IN UPHOLDING THE ACTIONS OF THE T PO. 3.3. THE AO / TPO ERRED IN FACTS IN ARBITRARILY REJ ECTING THE IT(TP)A NO.572/BANG/2017 PAGE 3 OF 7 CONTENTIONS OF THE APPELLANT AND COMPUTING AN ARM'S LENGTH INTEREST RATE FOR THE LOAN PROVIDED BY THE APPELLANT TO ITS AE ON HIS OWN SURMISES. THE HON'BLE DRP ERRED IN UPHOLDING THE AC TIONS OF THE TPO. 3.4. THE HON'BLE DRP, AO AND TPO ERRED IN NOT FOLLO WING THE ORDERS HON'BLE ITAT IN THE APPELLANT'S OWN CASE FOR AY 200 9-10 AND AY 2010-11 AS REGARDS THE COMPUTATIONMETHODOLOGY TO BE FOLLOWED FOR BENCHMARKING THE INTEREST RECEIVED BY THE APPELLANT FOR LOAN PROVIDED TO ITS AE. 4. INITIATION OF PENALTY PROCEEDINGS 4.1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. AO HAS ERRED IN INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. 5. RELIEF 5.1. THE APPELLANT PRAYS THAT DIRECTIONS HE GIVEN T O GRANT ALL SUCH RELIEF ARISING FROM THE PRECEDING GROUNDS AS ALSO A LL RELIEFS CONSEQUENTIAL THERETO. THE APPELLANT CRAVES TO ADD TO OR ALTER, BY DELETIO N, SUBSTITUTION, MODIFICATION OR OTHERWISE, ANY OR ALL OF THE ABOVE GROUNDS OF APPEAL, AT ANY TIME BEFORE OR DURING THE HEARING OF THE APP EAL. 2. REGARDING GROUND NO. 1 IN RESPECT OF REDUCTION O F INTERNET, TRAVELLING EXPENSES AND PRODUCT MARKETING EXPENSES OF RS. 23,39,933/-, RS. 3,83,74,585/- AND RS. 6,03,461/- RESPECTIVELY FROM EXPORT TURNOVER FO R THE PURPOSE OF COMPUTING DEDUCTION ALLOWABLE TO ASSESSEE U/S. 10AA OF THE I. T. ACT, IT WAS SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSE E BY THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2011-12 IN IT(TP)A NO. 544/BANG/2016 DATED 12.04.2017. HE SUBMITTED A COP Y OF THIS TRIBUNAL ORDER AND DRAWN OUR ATTENTION TO PARA NO. 7 OF THIS TRIBU NAL ORDER AND SUBMITTED THAT IN THIS ORDER, THE TRIBUNAL HAS FOLLOWED ANOTHER TR IBUNAL ORDER RENDERED IN THE CASE OF THE ASSESSEE FOR ASSESSMENT YEAR 2009-10 IN IT(TP)A NO. 223/BANG/2014 AND HAS REPRODUCED THE RELEVANT PORTI ON OF THAT TRIBUNAL ORDER. AT THIS JUNCTURE, THE BENCH ASKED THE LD. AR OF ASS ESSEE TO SHOW THE DETAILS OF THE EXPENSES I.E. TRAVELLING EXPENSES, INTERNET EXP ENSES AND PRODUCT MARKETING EXPENSES TO SEE AS TO WHETHER THE SAME AR E ATTRIBUTABLE TO DELIVERY OF ARTICLES OR NOT. IN REPLY, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THOSE DETAILS ARE NOT READILY AVAILABLE AND THEREFORE, TH E MATTER MAY BE RESTORED IT(TP)A NO.572/BANG/2017 PAGE 4 OF 7 BACK TO THE FILE OF AO FOR FRESH DECISION AFTER EXA MINING THIS ASPECT OF THE MATTER. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELOW. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT AS PER TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2009-10, TH E RELEVANT PORTION OF WHICH IS REPRODUCED BY TRIBUNAL IN ITS ORDER IN ASS ESSMENT YEAR 2011-12, IT IS NOTED THAT EXPENSES IF ANY INCURRED IN FOREIGN EXCH ANGE RENDERED IN RESPECT OF THE SERVICES OUTSIDE INDIA WHICH SHOULD BE ATTRIBUT ABLE TO DELIVERY OF ARTICLES, IT SHOULD BE REDUCED FROM EXPORT TURNOVER. AS PER THE AO, THESE EXPENSES I.E. INTERNET EXPENSES, TRAVELLING AND PRODUCT MARKETING EXPENSES ARE HIT BY THIS PROVISION BUT THE DETAILS OF THESE EXPENSES FOR THE PRESENT YEAR IS NOT AVAILABLE BEFORE US AND THEREFORE, IT IS NOT POSSIBLE FOR US TO GIVE A FINDING AS TO WHETHER THESE EXPENSES ARE ATTRIBUTABLE TO DELIVERY OF ARTI CLES AND HENCE, WE RESTORE THIS MATTER BACK TO THE FILE OF AO FOR FRESH DECISI ON WITH THE DIRECTION THAT THE ASSESSEE SHOULD ESTABLISH BEFORE THE AO THAT THESE EXPENSES IN QUESTION ARE NOT RELATABLE TO DELIVERY OF ARTICLES BY SHOWING TH AT THESE EXPENSES ARE ATTRIBUTABLE TO SOME OTHER ACTIVITY AND NOT TO DELI VERY OF ARTICLES AND IF THE ASSESSEE IS ABLE TO ESTABLISH THIS THEN THOSE EXPEN SES SHOULD NOT BE REDUCED FROM EXPORT TURNOVER FOR THE PURPOSE OF COMPUTING D EDUCTION ALLOWABLE TO ASSESSEE U/S. 10AA OF THE I.T. ACT, 1961 BUT IF THE ASSESSEE IS NOT ABLE TO DO SO THEN THESE EXPENSES SHOULD BE REDUCED FROM BOTH EXP ORT TURNOVER AND TOTAL TURNOVER AS HAS BEEN HELD BY HON'BLE KARNATAKA HIGH COURT IN CASE OF CIT VS. TATA ELXSI LTD. AS REPORTED IN 349 ITR 98. THIS GR OUND IS ALLOWED FOR STATISTICAL PURPOSES. 4. REGARDING GROUND NO. 2, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THIS GROUND IS NOT PRESSED. ACCORDINGLY THIS GROUND IS REJECTED AS NOT PRESSED. 5. REGARDING GROUND NO. 3, IT WAS SUBMITTED THAT TH IS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL ORDER IN ASSESSEES OW N CASE FOR ASSESSMENT YEAR 2011-12 AS CITED ABOVE. HE DRAWN OUR ATTENTIO N TO PAGE NO. 7 OF THE TRIBUNAL ORDER AND POINTED OUT THAT ON THIS PAGE, T HE TRIBUNAL HAS REPRODUCED THE RELEVANT PORTION OF ANOTHER TRIBUNAL ORDER IN ASSES SEES OWN CASE FOR ASSESSMENT YEAR 2010-11 AND IT WAS HELD THAT THE MA TTER SHOULD BE DECIDED AFRESH BY THE AO IN THE LIGHT OF THE JUDGMENT OF HO N'BLE BOMBAY HIGH COURT IT(TP)A NO.572/BANG/2017 PAGE 5 OF 7 RENDERED IN THE CASE OF CIT VS. TATAAUTOCOMP SYSTEM S LTD. AS REPORTED IN 56 TAXMANN.COM 206(BOM). THE LD. DR OF REVENUE SUPPOR TED THE ORDER OF DRP. HE ALSO SUBMITTED THAT IN ASSESSMENT YEARS 2010-11 AND 2011-12, THE TRIBUNAL HAS RESTORED BACK THE MATTER TO THE FILE OF AO TO D ECIDE AFRESH IN THE LIGHT OF THIS JUDGMENT OF HON'BLE BOMBAY HIGH COURT AND THEREFORE , IN THE PRESENT YEAR ALSO, THE MATTER MAY BE RESTORED BACK TO THE FILE O F AO WITH SIMILAR DIRECTIONS. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FI ND THAT PARA NO. 7 OF THE TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMEN T YEAR 2010-11 HAS BEEN REPRODUCED BY TRIBUNAL IN ITS ORDER IN ASSESSEES O WN CASE FOR ASSESSMENT YEAR 2011-12 IN PARA NO. 10 OF THAT ORDER AND THEREFORE, WE REPRODUCE PARA NO. 10 OF THE TRIBUNAL ORDER IN ASSESSMENT YEAR 2011-12 FOR T HE SAKE OF READY REFERENCE. THE SAME IS AS UNDER. 10. GROUND NO. 7 IS DETERMINATION OF ARMS LENGTH I NTEREST RATE. THE LD. AR HAS BROUGHT TO OUR ATTENTION THE ORDER PASSE D IN APPEAL BEARING NO. 373 & 374/BANG/2015 IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2010-11 TO THE FOLLOWING EFFECT. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND PERUS ED THE RECORD. THIS ISSUE IS SIMILAR TO THE ISSUE RAISED IN EARLIE R YEAR, WHEREIN THE DRP HAS DIRECTED THE AO TO ADOPT THE INTEREST RATES OF THE LOANEE COUNTRY AND TO SEARCH IN THE 'LOAN CONNECTOR' DATA BASE WHICH WAS NOT DONE BY THE AO/TPO. THE ISSUE IS DEALT WITH AS UNDE R IN AY. 2009-10: '13. THE THIRD ISSUE FOR CONSIDERATION IN THE TP IS SUES IS WITH REFERENCE TO DETERMINATION OF ALP OF INTEREST RECEI VED. DURING THE IMPUGNED YEAR, ASSESSEE HAD RECEIVED INTEREST ON LO ANS TO AN EXTENT OF RS.4,94,11,033. IT WAS SUBMITTED TO THE TPO THAT TH E LOAN WAS ADVANCED IN FOREIGN CURRENCY USD @ 6% P.A. BY USING CUP METHOD AS AN APPROPRIATE METHOD TO BENCH MARK INTEREST RAT E ON LIBOR BASIS. IT WAS ALSO SUBMITTED THAT INTEREST RECEIVED WAS WI THIN THE REGULATORY FRAMEWORK LAID DOWN BY RBI. HOWEVER, THE AO DID NOT AGREE AND CONSIDERED THAT ASSESSEE HAVING ADVANCED FUNDS FROM INDIA SHOULD ANALYSE COMPARABILITY ON THE INTEREST RATES PREVAIL ING IN INDIA. HE HAS ADOPTED BOND RATING OF BB AT 17.22% IN RESPECT LOAN S ADVANCED AND PROPOSED AN ADDITION. 13.1 ON ASSESSEE'S OBJECTIONS, THE DRP WHILE ACCEPT ING THE CREDIT RATING AT BB, DIRECTED THE TPO TO ADOPT AVERAGE CRE DIT RISK SPREAD FROM THE 'LOAN CONNECTOR' DATABASE. THE TPO, AS STA TED EARLIER, DID NOT DO SUCH EXERCISE AND ADOPTED THE SAME RATE OF I NTEREST AND MADE ADDITION. IT(TP)A NO.572/BANG/2017 PAGE 6 OF 7 13.2. IT WAS SUBMITTED BY THE LD. COUNSEL THAT ASSE SSEE'S RATE OF INTEREST IS ON PAR WITH LIBOR RATES WHICH IS GENERALLY BEING ACCEPTED BY THE ITAT IN A NUMBER OF CASES. FURTHER, IT WAS SUBMITTE D THAT THOMSON REUTERS'S LOAN CONNECTOR DATABASE WAS MENTIONING 2. 53% BEING PAID BY COMPANIES RATED AS BB IN COMPARABLE TRANSACTIONS AND IF 1% LIBOR RATE IS INCREASED, THE EFFECTIVE INTEREST RAT E WOULD BE 3.53% WHICH IS STILL LESSER THAN 6% RATE RECEIVED BY THE ASSESSEE. 13.3 IT WAS FURTHER SUBMITTED THAT THE HON'BLE BOMB AY HIGH COURT IN THE CASE OF TATA AUTOCOMP SYSTEMS LTD., 56 TAXMAN.C OM 206 (BOM) HAS UPHELD THE INTEREST RATE BEING CHARGED IN THE C OUNTRY WHERE THE LOAN IS RECEIVED/CONSUMED. ACCORDINGLY, IT WAS SUBM ITTED THAT USD LIBOR RATE IS AN AVERAGE OF 2.854%. ACCORDINGLY, AS SESSEE'S INTEREST RECEIVED BEING AT 6% SHOULD BE CONSIDERED AT ARM'S LENGTH. 13.4 WE HAVE CONSIDERED THE CONTENTIONS AND PERUSED THE ORDERS OF AUTHORITIES. AS NOTED ABOVE, THE AO DID NOT IMPLEME NT THE DRP DIRECTION, THEREFORE TO THAT EXTENT, ASSESSEE'S GRI EVANCE IS VALID. IT WAS SUBMITTED THAT IF THE DRP DIRECTIONS ARE IMPLEMENTE D, THE EFFECTIVE INTEREST RATE ON THE LOAN CONNECTOR DATABASE WOULD COME TO 3.53% AND ON THE BASIS OF DECISION OF THE HON'BLE BOMBAY HIGH COURT, IF AVERAGE RATE PREVAILING IN USD IS CONSIDERED, THAT WOULD COME TO 2.85%. SINCE THE ABOVE INTEREST RATES ARE LESS THAN THE RATE OF INTEREST RECEIVED BY THE ASSESSEE AT 6%, THERE IS NO NEED TO MAKE ANY ADJUSTMENT IN THE GIVEN FACTS OF THE CASE. HOWEVER, SINCE THE AO DID NOT UNDERTAKE THE EXERCISE OF GIVING EFFECT TO DRP ORDER, WE ARE OF THE OPINION THAT THE DETAILS FURNISHED BY THE ASSESSEE WITH REFERENCE TO THE ABOVE AVERAGE RATES BASED ON LOAN CONNECTOR DATABAS E SHOULD BE EXAMINED AND IF THEY ARE FOUND TO BE LESS THAN 6%, WE DIRECT THAT NO ADJUSTMENT NEED BE MADE ON THE INTEREST RECEIVED BY THE ASSESSEE. WITH THIS, GROUNDS NO.1.5 AND 7 IS CONSIDERED AS AL LOWED FOR STATISTICAL PURPOSES'. RESPECTFULLY FOLLOWING THE SAME, WE DIRECT THE TPO TO FOLLOW ACCORDINGLY IN THIS YEAR ALSO AND EXAMINE THE ALP O N SIMILAR LINES. WITH THIS, GROUND NOS. 9 TO 11 ARE CONSIDERED ALLOW ED FOR STATISTICAL PURPOSES. IT WAS SUBMITTED THAT IN THE ASSESSMENT YEAR UNDER CONSIDERATION THE FACTS OF THE CASE ARE SIMILAR AND THEREFORE THE ISS UE SHOULD BE DECIDED IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE JUDGMENT OF THE COORDINATE BENCH IN THE MATTER OF ASSESSEE FOR THE YEAR 2010-1 1. RESPECTFULLY FOLLOWING THE JUDGMENT OF THE COORDINATE BENCH IN T HE CASE OF ASSESSEE WE ALLOW THESE TWO GROUNDS OF THE ASSESSEE WITH THE DIRECTION TOTOO TO FOLLOW THE DIRECTION GIVEN HEREIN ABOVE . 7. RESPECTFULLY FOLLOWING THE DECISION OF COORDINAT E BENCH, IN THE PRESENT YEAR ALSO, WE FIND NO REASON TO TAKE A CONTRARY VIEW BEC AUSE NO DIFFERENCE IN FACTS HAS BEEN POINTED OUT BY ANY SIDE AND THEREFORE, WE RESTORE THIS MATTER BACK TO IT(TP)A NO.572/BANG/2017 PAGE 7 OF 7 THE FILE OF AO/TPO FOR FRESH DECISION WITH THE DIRE CTION TO EXAMINE THE ALP ON SIMILAR LINE AS HAS BEEN HELD BY HON'BLE BOMBAY HIG H COURT IN THE CASE OF CIT VS. TATA AUTOCOMP SYSTEMS LTD.(SUPRA). THIS GROUND OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 8. GROUND NO. 4 IS REGARDING OF INITIATION OF PENAL TY PROCEEDINGS AND THIS GROUND IS REJECTED AS PREMATURE. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (VIJAY PAL RAO) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 26 TH OCTOBER, 2017. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.