Asst.C.I.T., Bangalore V. M/s IMS Health Technology Solutions Pvt. Ltd., Bangalore

ITA 577/BANG/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 8942 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 24-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MRS NEERA MALHOTRA
• Keywords: Opportunity of being heard
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER IT (TP) A NO. 577/ BANG/201 6 ASSESSMENT YEAR : 20 11 - 12 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 3 (1) (1), BANGALORE. VS. M/S. IMS HEALTH TECHNOLOGY SOLUTIONS PVT. LTD., MARUTHI INFOTECH CENTRE, 11/1, 12/1, KORAMANGALA INNER ROAD, AMARJYOTHI LAYOUT, BANGALORE 560 071. PAN: AABCD9297J APPELLANT RESPONDENT C.O. NO. 49/BANG/2016 (IN IT(TP)A NO. 577/BANG/2016) (BY ASSESSEE) ASSESSEE BY : SHRI S.P. CHIDAMBARAM, ADVOCATE RE VENUE BY : MS. NEERA MALHOTRA, CIT (DR) DATE OF HEARING : 09 . 10 .2018 DATE OF PRONOUNCEMENT : 12 . 10 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THEREVENUE AND THE CO IS FI LED BY THE ASSESSEE AND THESE ARE DIRECTED AGAINST THE ASSESSMENT ORDER PASSED BY THE AO ON 28.01.2016 FOR ASSESSMENT YEAR 2011-12 U/S. 143(3) R.W.S. 144C OF THE IT ACT, 1961 AS PER THE DIRECTIONS OF DRP. 2. THE GROUNDS RAISED BY THE REVENUE IN ITS APPEAL ARE AS UNDER. I) THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL A RE OPPOSED TO LAW AND FACTS OF THE CASE II) IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHET HER THE HON'BLE DRP IS CORRECT IN HOLDING THAT THE, M/S RS SOFTWARE PVT. LTD., M/S ACROPETAL TECHNOLOGIES LTD AND M/S L&T INFOTECH LTD . CANNOT BE IT(TP)A NO. 577/BANG/2016 & C.O. NO. 49/BANG/2016 PAGE 2 OF 8 TAKEN AS COMPARABLE, WHEN IT SATISFIES ALL THE QUAL ITATIVE AND QUANTITATIVE FILTERS ADOPTED BY THE TPO. III) WHETHER THE HON'BLE DRP IS RIGHT IN APPLYING ' ONSITE REVENUE FILTER' WITHOUT APPRECIATING THE FACT THAT THE FUNC TION CARRIED OUT IS 'SOFTWARE DEVELOPMENT' IRRESPECTIVE OF WHETHER ONSI TE OR OFFSHORE. IV) WHETHER THE HON'BLE DRP IN CORRECT IN EXCLUDING M/S RS SOFTWARE PVT. LTD. AND M/S ACROPETAL TECHNOLOGIES AND M/S L& T INFOTECH LTD ON THE GROUND THAT THEY HAVE SIGNIFICANT ONSITE REV ENUE WITHOUT APPRECIATING THE FACT THAT ONSITE DEVELOPMENT OF SO FTWARE ENTAILS MORE COST AND THEREBY RESULTS IN LOWER PROFIT MARGINS. V) WHETHER THE HON'BLE DRP WAS RIGHT IN SEEKING EXA CT COMPARABILITY WHILE SEARCHING FOR COMPARABLE COMPANIES OF THE ASS ESSEE UNDER TNMM METHOD WHEREAS REQUIREMENT OF LAW AND INTERNAT IONAL JURISPRUDENCE REQUIRE SEEKING SIMILAR COMPARABLE CO MPANIES. VI) WHETHER THE HON'BLE DRP HAS ERRED ON FACT IN DE LETING M/S E- INFOCHIPS AS A COMPARABLE ON THE GROUND THAT IT FAI LS THE FILTER OF SERVICE INCOME LESS THAN 75% OF THE SALES, WHEN THE SAID COMPANY HAS SERVICE INCOME BEING 100% OF THE SALES. VII) WHETHER HON'BLE DRP ERRED IN FACT IN REJECTING THE COMPANY M/S INFOSYS TECHNOLOGIES LTD., AS A COMPARABLE ON THE G ROUND THAT IT IS FUNCTIONALLY DIFFERENT WHEN THE PRIMARY SOURCE OF I NCOME OF THE COMPARABLE IS FROM PROVISION OF SOFTWARE DEVELOPMEN T SERVICES. VII) WHETHER WHILE SEEKING THE EXACT COMPARABILITY AS MENTIONED ABOVE THE DRP WAS RIGHT IN FACT AND IN LAW IN IMPOS ING CONDITION BEYOND LAW WHEREAS THE REQUIREMENT OF LAW IS TO ACK NOWLEDGE ONLY THOSE DIFFERENCES THAT ARE LIKELY TO MATERIALLY AFF ECT THE MARGIN. VIII) WHETHER THE HON'BLE DRP IS CORRECT IN FACT AN D LAW IN DISREGARDING THE POSITION OF LAW THAT THERE COULD B E DIFFERENCES BETWEEN THE ENTERPRISES COMPARED UNDER THE TNMM MET HOD THAT ARE NOT LIKELY TO MATERIALLY AFFECT THE PRICE OR COST C HARGED OR THE PROFITS ACCRUING TO SUCH ENTERPRISES? IX) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE DRP WAS RIGHT IN FOLLOWING THE RATIO LAID DOWN BY THE HON'B LE HIGH COURT IN THE CASE OF M/S TATA ELXSI LTD., IN 349 ITR 98. X) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE DISPUTE RESOLUTION PANEL WAS RIGHT IN HOLDING THAT EXPENSES REDUCED FROM EXPORT TURNOVER HAS TO BE REDUCED FROM TOTAL T URNOVER ALSO, SINCE NO PROVISION U/S 10A PROVIDES FOR EXCLUSION O F SUCH EXPENSES. XI) FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF IT(TP)A NO. 577/BANG/2016 & C.O. NO. 49/BANG/2016 PAGE 3 OF 8 HEARING, IT IS PRAYED THATTHE DIRECTIONS OF THE DIS PUTE RESOLUTION PANEL IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAYBE REVERSED. XII) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEN D AND /OR DELETE ANY OF THE GROUNDS MENTIONED ABOVE. 3. THE GROUNDS RAISED BY THE ASSESSEE IN ITS CO ARE AS UNDER. 1. THE LD. DRP WHILE REJECTING ACROPETAL TECHNOLOGI ES LTD. ON ONSITE FILTER HAS GROSSLY ERRED IN NOT ADJUDICATING ON THE FOLLOWING GROUNDS: FAILS EMPLOYEE COST FILTER DIFFERENT BUSINESS MODEL 2. THE LD. DRP WHILE REJECTING E-INFOCHIPS ON NON-A VAILABILITY OF SEGMENTAL DETAILS AND SERVICE INCOME FILTER HAS GRO SSLY ERRED IN NOT ADJUDICATING ON THE FOLLOWING GROUNDS: FUNCTIONAL DISSIMILARITY ENGAGED IN RESEARCH & DEVELOPMENT DIVERSIFIED OPERATIONS 3. THE LD. DRP WHILE REJECTING ICRA TECHNO ANALYTIC S LTD. ON NON- AVAILABILITY OF SEGMENTAL DETAILS HAS GROSSLY ERRED IN NOT ADJUDICATING ON THE FOLLOWING GROUND: FUNCTIONAL DISSIMILARITY 4. THE LD. DRP WHILE REJECTING INFOSYS LTD. ON FUNC TIONAL DISSIMILARITY HAS GROSSLY ERRED IN NOT ADJUDICATING ON THE FOLLOW ING GROUNDS: ECONOMIES OF SCALE PRESENCE OF BRAND 5. THE LD. DRP WHILE REJECTING L&T INFOTECH LTD. ON ONSITE FILTER HAS GROSSLY ERRED IN NOT ADJUDICATING ON THE FOLLOWING GROUNDS: FUNCTIONAL DISSIMILARITY NO SEGMENTAL DETAILS AVAILABLE SALES TURNOVER FILTER 6. THE LD. DRP WHILE REJECTING MINDTREE LTD. ON THE GROUND OF ONSITE FILTER AND PRESENCE OF EXTRAORDINARY EVENTS HAS GRO SSLY ERRED IN NOT ADJUDICATING ON THE FOLLOWING GROUNDS: ENGAGED IN INTELLECTUAL PROPERTY LICENSING SALES TURNOVER FILTER 7. THE LD. DRP ERRED IN REJECTING EVOKE TECHNOLOGIE S LTD. ONLY ON THE GROUND OF HAVING LOW MARGIN WHEN THE SAID COMPANY P ASSES ALL OTHER FILTERS ADOPTED BY THE LD. TPO. 8. THE LD. DRP ERRED IN NOT REJECTING PERSISTENT SY STEMS & SOLUTIONS IT(TP)A NO. 577/BANG/2016 & C.O. NO. 49/BANG/2016 PAGE 4 OF 8 LTD., WHEN THE SAID COMPANY OUGHT TO BE REJECTED ON THE FOLLOWING GROUNDS: FUNCTIONAL DISSIMILARITY 9. THE LD. DRP ERRED IN NOT REJECTING PERSISTENT SY STEMS LTD., WHEN THE SAID COMPANY OUGHT TO BE REJECTED ON THE FOLLOW ING GROUNDS: FUNCTIONAL DISSIMILARITY NO SEGMENTAL DETAILS AVAILABLE SALES TURNOVER FILTER 10. THE LD. DRP ERRED IN NOT REJECTING SASKEN COMMU NICATION TECHNOLOGIES LTD., WHEN THE SAID COMPANY OUGHT TO B E REJECTED ON THE FOLLOWING GROUNDS: FUNCTIONAL DISSIMILARITY NO SEGMENTAL DETAILS AVAILABLE SALES TURNOVER FILTER THE RESPONDENT CRAVES LEAVE TO ADD, ALTER, AMEND AN D/OR DELETE ANY OF THE GROUND MENTIONED ABOVE. 4. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. DR O F REVENUE THAT IN THE PRESENT CASE, THE DRP HAS ADOPTED A NEW FILTER I.E. ONSITE REVENUE FILTER FOR THE FIRST TIME BECAUSE THIS FILTER WAS NOT ADOPTED BY THE TPO. IT WAS HER SUBMISSION THAT UNDER THESE FACTS, THE MATTER HAS TO BE RESTORED BA CK TO THE FIE OF DRP FOR FRESH DECISION BY APPLYING THE SAID FILTER TO ALL THE COM PARABLES INSTEAD OF SELECTIVELY APPLYING THE SAID FILTER. IN SUPPORT OF THIS CONTE NTION, SHE PLACED RELIANCE ON THE TRIBUNAL ORDER RENDERED IN THE CASE OF ACIT VS. BRO ADCOM COMMUNICATION TECHNOLOGIES (P.) LTD. AS REPORTED IN [2017] 88 TAX MANN.COM 309 (BANGALORE- TRIB.). SHE FILED A COPY OF THIS TRIBUNAL ORDER AN D DRAWN OUR ATTENTION TO PARAS 4 AND 5 OF THIS TRIBUNAL ORDER. 5. IN REPLY IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE DRP HAS APPLIED THIS FILTER TO ALL THE COMPARABLES WHICH WERE ADOPTED BY THE TPO AND IN THIS REGARD, HE DRAWN OUR ATTENTION TO PARA 2.7 OF THE DRP DIREC TIONS AND POINTED OUT THAT AS PER THIS PARA, THIS FILTER WAS APPLIED BY DRP TO AC ROPETAL TECHNOLOGIES LTD. HE ALSO POINTED OUT THAT AS PER PARA 2.12 OF THE DIREC TION OF DRP, THIS FILTER WAS APPLIED IN RESPECT OF LARSEN AND TOUBRO INFOTECH LI MITED ALSO IN ADDITION TO APPLYING THIS FILTER FOR R S SOFTWARE (INDIA) LTD. ON PAGE NO. 21 OF THE DIRECTIONS OF DRP. HE ALSO SUBMITTED THAT APART FROM REJECTIN G SOME COMPARABLES ON THE IT(TP)A NO. 577/BANG/2016 & C.O. NO. 49/BANG/2016 PAGE 5 OF 8 BASIS OF ONSITE REVENUE FILTER, THESE COMPARABLES W ERE ALSO REJECTED FOR OTHER REASONS ALSO AND THEREFORE, IN THE FACTS OF PRESENT CASE, THIS TRIBUNAL ORDER RENDERED IN THE CASE OF ACIT VS. BROADCOM COMMUNICA TION TECHNOLOGIES (P.) LTD. (SUPRA) IS NOT APPLICABLE. 6. REGARDING THE CORPORATE TAX ISSUE RAISED BY THE REVENUE IN THIS APPEAL, BOTH SIDES AGREED THAT THIS ISSUE IS COVERED IN FAVOUR O F THE ASSESSEE BY THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED I N THE CASE OF CIT VS. TATA ELXSI LTD., 349 ITR 98. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, WE REPRODUCE PARAS 4 AND 5 FROM THE TRIBUNAL ORDER RENDERED IN THE CASE OF ACIT VS. BROADCOM COMMUNICATION TECHNOLOGIES (P.) LTD. (SUPRA). THE SAME ARE AS UNDER. 4. AT THE VERY OUTSET, IT WAS POINTED OUT BY THE BE NCH THAT AS PER GROUND NO. 10 OF THE APPEAL OF THE REVENUE, IT IS T HE GRIEVANCE OF THE REVENUE THAT THE DRP WAS NOT CORRECT IN APPLYING ON SITE FILTER IN SOFTWARE DEVELOPMENT SEGMENT IN THE CASE IT(TP)A NO S. 347 & 501/BANG/2015 OF M/S. RS SOFTWARE INDIA LTD. AS PER GROUND NO. 9, THIS IS THE GRIEVANCE OF THE REVENUE AS TO WHETHER THE APPLICATION OF NEW FILTER (ONSITE FILTER) IS WITHIN THE PURVIEW OF THE DRP. THE BENCH OBSERVED THAT THIS TRIBUNAL IS TAKING A CONSISTENT VIEW THAT IF A NEW FILTER IS APPLIED, IT SHOULD BE APPLIED TO ALL COMP ARABLES AND NOT TO PARTICULAR COMPARABLES ON PICK AND CHOOSE BASIS AND THEREFORE, IN THAT SITUATION WHERE NEW FILTER IS APPLIED, THE MAT TER HAS TO GO BACK TO EXAMINE ALL COMPARABLES IN THE LIGHT OF THE NEW FIL TER. IN REPLY, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT REGARDING ONLY ONE COMPARABLE I.E. M/S. RS SOFTWARE INDIA LTD., THE DRP HAS APPLI ED THIS NEW FILTER AND EXCLUDED THIS COMPARABLE AND THE ASSESSEE AS WE LL AS REVENUE BOTH ARE IN APPEAL AGAINST THE EXCLUSION OF THIS CO MPARABLE AND THEREFORE, THIS SHOULD BE HELD THAT THIS FILTER IS NOT APPLICABLE IN THE PRESENT CASE. THE LD. DR OF REVENUE SUPPORTED THE O RDER OF TPO AND DRAFT ASSESSMENT ORDER. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIN D THAT AS PER PARA NO. 3.5 OF ITS ORDER, IT IS NOTED BY DRP THAT CONSI DERING THE FACT THAT THE OBJECTIONS ARE RAISED BY THE ASSESSEE IN RESPEC T OF HIGHER MARGIN COMPARABLES, IT WAS FOUND APPROPRIATE BY THEM TO EX AMINE OTHER COMPANIES SELECTED BY TPO AS COMPARABLE IN REGARD T O THEIR COMPARABILITY. THEREAFTER, IT WAS NOTED THAT FROM T HE PERUSAL OF THE ANNUAL REPORTS, IT IS NOTICED THAT AS PER PAGE NO. 45 OF ANNUAL REPORTS IN CASE OF M/S. RS SOFTWARE INDIA LTD., THE EXPENSE S ON FOREIGN BRANCHES ARE INCURRED TO THE EXTENT OF RS. 12.42 CR ORES (82%) OF TOTAL EXPENSES OF RS. 15 CRORES DEBITED IN P & L ACCOUNT, WHICH MAKES IT CLEAR THAT IT IS PREDOMINANTLY ONSITE SOFTWARE DEVE LOPMENT COMPANY IT(TP)A NO. 577/BANG/2016 & C.O. NO. 49/BANG/2016 PAGE 6 OF 8 AND THEREFORE, IT CANNOT BE RETAINED AS COMPARABLE. THE DRP DIRECTED THE AO TO EXCLUDE THIS COMPANY FROM THE LIST OF COM PARABLES. BEFORE US, AS PER THE REVISED GROUNDS OF APPEAL FILED BY T HE ASSESSEE AS REPRODUCED ABOVE, ASSESSEE IS OBJECTING TO THE EXCL USION OF THIS COMPARABLE I.E. M/S. RS SOFTWARE INDIA LTD. BUT THE RE IS NO OBJECTION ON THIS ASPECT IN THE GROUNDS RAISED BEFORE US THAT ONSITE FILTER SHOULD NOT BE APPLIED. ONSITE FILTER IS VERY RELEVANT AND IMPORTANT FILTER IN TP STUDY AND THEREFORE, IT CANNOT BE SAID THAT ONSITE FILTER CANNOT BE APPLIED. HENCE, WE HOLD THAT IN THE FACTS OF THE PR ESENT CASE, ONSITE FILTER HAS TO BE APPLIED BUT SINCE IT WAS APPLIED B Y THE DRP TO ONLY ONE COMPARABLE, ALL THE COMPARABLES SHOULD BE EXAMINED IN THE LIGHT OF THIS FILTER AND THEREAFTER, THE LIST OF COMPARABLES SHOULD IT(TP)A NOS. 347 & 501/BANG/2015 BE FINALIZED. WE WANT TO MENTIO N THAT IN RESPECT OF THOSE COMPARABLES WHICH ARE PASSING THROUGH THIS FILTER I.E. ONSITE FILTER, THE DRP SHOULD EXAMINE THE APPLICABILITY OF ALL OTHER RELEVANT FILTERS ALSO AND ALL OTHER OBJECTIONS SUCH AS FUNCT IONAL SIMILARITY / DISSIMILARITY ETC. ALSO TO DECIDE ABOUT INCLUSION O R EXCLUSION OF SUCH COMPARABLES AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. HENCE THE ENTIRE TP MATTER IS RESTORED BACK TO THE FILE OF DRP FOR FRESH DECISION. 8. WHILE GOING THROUGH THESE PARAS FROM THE TRIBUNA L ORDER RENDERED IN THE CASE OF ACIT VS. BROADCOM COMMUNICATION TECHNOLOGIES (P. ) LTD. (SUPRA), IT IS SEEN THAT IN THAT CASE, ONSITE FILTER WAS APPLIED BY DRP TO ONLY ONE COMPARABLE I.E. R S SOFTWARE (INDIA) LTD. WHEREAS IN THE PRESENT CASE , THE SAID FILTER WAS APPLIED BY DRP TO THREE COMPARABLES I.E. 1) R S SOFTWARE (I NDIA) LTD., 2) ACROPETAL TECHNOLOGIES LTD. AND 3) LARSEN AND TOUBRO INFOTECH LIMITED. BUT IT MAKES NO DIFFERENCE BECAUSE THIS IS TRUE THAT THIS FILTER WA S NOT APPLIED BY TPO AND THE SAME WAS APPLIED BY DRP FOR THE FIRST TIME TO ONLY 3 COMPARABLES OUT OF 13 COMPARABLES SELECTED BY THE TPO. THERE ARE SOME CO MPARABLES WHICH ARE NOT DISPUTED BY THE ASSESSEE AS THEY ARE HAVING LOW PRO FIT MARGIN SUCH AS EVOKE TECH 8.11%, MINDTREE LIMITED (SEG.) 10.66%. IT MAY SO HAPPEN THAT IF THESE COMPARABLES ARE EXAMINED IN THE LIGHT OF THIS FILTE R, IT MAY OR MAY NOT PASS THROUGH THIS FILTER. HENCE, WHEN A FILTER IS APPLIE D FOR SELECTION OF COMPARABLES, IT SHOULD BE APPLIED AT THE LEVEL OF SELECTING THE COM PARABLES ITSELF AND NOT AFTER THE COMPARABLES WERE SELECTED BECAUSE APPLICATION O F A FILTER DETERMINES THE NUMBER OF COMPARABLES AVAILABLE FOR TP ANALYSIS. H ENCE WE ARE OF THE CONSIDERED OPINION THAT IN THE FACTS OF PRESENT CAS E ALSO, THIS TRIBUNAL ORDER RENDERED IN THE CASE OF ACIT VS. BROADCOM COMMUNICA TION TECHNOLOGIES (P.) LTD. (SUPRA) IS SQUARELY APPLICABLE. RESPECTFULLY FOLLOWING THE SAME, WE RESTORE IT(TP)A NO. 577/BANG/2016 & C.O. NO. 49/BANG/2016 PAGE 7 OF 8 BACK THE ENTIRE TP MATTER TO THE DRP FOR FRESH DECI SION WITH THE DIRECTION THAT ONSITE FILTER SHOULD BE APPLIED TO ALL COMPARABLES. WHATEVER COMPARABLES ARE FOUND AFTER APPLYING THAT FILTER ALONG WITH THE OTH ER FILTERS WHICH WERE ALREADY APPLIED BY TPO IN THE FIRST ROUND, THE FINAL LIST O F COMPARABLES SHOULD BE DRAWN AFTER DECIDING OTHER OBJECTIONS IF ANY SUCH AS FUNC TIONAL SIMILARITY / DISSIMILARITY ETC. THE DRP SHOULD PASS NECESSARY ORDER AS PER LA W IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES AND IF REQUIRED DRP CAN OBTAIN REMAND REPORT FROM T HE AO/TPO IN THIS REGARD. 9. REGARDING THE CORPORATE TAX ISSUE RAISED BY THE REVENUE AS PER GROUND NOS. 9 AND 10 OF ITS APPEAL, THE ISSUE RAISED AS PER THESE GROUNDS IS THIS AS TO WHETHER THE TOTAL TURNOVER CAN ALSO BE REDUCED BY THE AMOUN T OF EXPENDITURE WHICH WERE INCURRED IN FOREIGN CURRENCY AND WHICH WERE RE DUCED BY THE AO FROM EXPORT TURNOVER. AS PER THE JUDGEMENT OF HON'BLE K ARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS. TATA ELXSI LTD.(SUP RA), IT WAS HELD THAT TOTAL TURNOVER IS SUM TOTAL OF EXPORT TURNOVER AND DOMEST IC TURNOVER AND THEREFORE, IF AN AMOUNT IS REDUCED FROM EXPORT TURNOVER THEN THE TOTAL TURNOVER ALSO GOES DOWN BY THE SAME AMOUNT AUTOMATICALLY. SINCE THE D IRECTIONS OF DRP ON THIS ISSUE IS IN LINE WITH THIS DECISION OF HON'BLE KARN ATAKA HIGH COURT, WE DECLINE TO INTERFERE IN THE DIRECTIONS OF DRP ON THIS ISSUE. THIS ISSUE IS DECIDED AGAINST THE REVENUE AND THESE GROUNDS OF REVENUES APPEAL A RE REJECTED. 10. IN THE RESULT, THE REVENUES APPEAL IS PARTLY A LLOWED FOR STATISTICAL PURPOSES. 11. REGARDING THE CO FILED BY THE ASSESSEE, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE ISSUE INVOLVED IN CO IS ALSO REGA RDING VARIOUS COMPARABLES AND THEREFORE, IF THE ISSUE RAISED BY THE REVENUE I N ITS APPEAL IN RESPECT OF TP ADJUSTMENT IS GOING BACK TO THE DRP FOR FRESH DECIS ION, THE ISSUE RAISED BY THE ASSESSEE IN CO MAY ALSO BE RESTORED BACK TO DRP FOR FRESH DECISION. THE LD. DR OF REVENUE SUBMITTED THAT THERE IS NO INFIRMITY IN THE DIRECTION OF DRP ON THESE ISSUES WHICH ARE RAISED BY ASSESSEE IN ITS CO . 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE FIND FORCE IN THE SUBMISSION OF LD. AR OF ASSESSEE THAT ENTIRE TP ISSUE SHOULD B E RESTORED BACK TO THE FILE OF DRP FOR FRESH DECISION. HENCE, WE HOLD THAT NO SEP ARATE ADJUDICATION IS CALLED IT(TP)A NO. 577/BANG/2016 & C.O. NO. 49/BANG/2016 PAGE 8 OF 8 FOR REGARDING VARIOUS GROUNDS RAISED BY ASSESSEE IN ITS CO BECAUSE WHILE DECIDING THE APPEAL OF REVENUE, WE HAVE ALREADY RES TORED BACK THE ENTIRE TP MATTER TO THE FILE OF DRP FOR FRESH DECISION. 13. IN THE RESULT, THE CO FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 14. IN THE COMBINED RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND THE CO FILED BY THE ASSESS EE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 12 TH OCTOBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.