M/s Enstage Software Pvt Ltd , Bangalore V. Income Tax Officer Ward-2(1)(4), Bangalore

ITA 583/BANG/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 6146 (ITAT-BANGALORE)
• Duration Of Justice: 3 year(s) 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 10-09-2020
• Assessment Year: 2012-2013
• Appeal Filed On: 14-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUZAFFAR HUSSAIN
• Assessee Lawyers: NARENDRA JAIN
• Keywords: Depreciation; Transfer pricing; Opportunity of being heard; Principle of natural justice; International transaction; Unabsorbed depreciation; CHAPTER IV
• Section: 143(3); 142(1); 234B; 195; 201; 143(2); 13; 22; 92CA; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI A.K GARODIA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER IT(TP)A NO.583/BANG/2017 ASSESSMENT YEAR : 2012-13 M/S ENSTAGE SOFTWARE PVT. LTD., NO.25, 1 ST FLOOR, EAST WING, SHANKARANARAYANA BLDG. 1, M.G ROAD, BENGALURU. PAN AAACE 9963 B VS. THE INCOME-TAX OFFICER, WARD-2(1)(4), BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI NARENDRA JAIN, C.A REVENUE BY : SHRI MUZAFFAR HUSSAIN, CIT (DR) DATE OF HEARING : 10-09-2020 DATE OF PRONOUNCEMENT : 25-09-2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST F INAL ASSESSMENT ORDER DATED 18/01/2017, PASSED UNDER SEC TION 143(3) R.W.S 144C(13) OF THE ACT BY LD.ITO WARD-2(1 )(4), FOR ASSESSMENT YEAR 2012-13 ON FOLLOWING GROUNDS OF APP EAL: GENERAL GROUND I. THE LEARNED INCOME TAX OFFICER, WARD 2(1)(4), BE NGALURU (HEREINAFTER REFERRED TO AS 'AU' FOR BREVITY), LEAR NED DEPUTY COMMISSIONER OF INCOME TAX (TRANSFER PRICING)I(2)(1 ), BENGALURU (HEREINAFTER REFERRED TO AS 'TPO' FOR BREVITY) AND HONORABLE PAGE 2 OF 18 IT(TP)A NO.583/BANG/2017 DISPUTE RESOLUTION PANEL-I (HEREINAFTER REFERRED TO AS HONORABLE DPP) ('AU 'TPU' AND 'DRP' COLLECTIVELY REFERRED AS 'LOWER AUTHORITIES' FOR BREVITY) HAVE ERRED IN PASSING THE ORDERS/DIRECTIONS IN THE MANNER PASSED BY THEM. THE ORDERS BEING BAD IN LAW ARE LIABLE TO BE QUASHED. 2. THE LEARNED AO HAS ERRED IN MAKING A REFERENCE T O TPO FOR DETERMINING ARM'S LENGTH PRICE WITHOUT DEMONSTRATING AS TO WHY IT WAS NECESS ARY AND EXPEDIENT TO DO SO. THE DRP HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER. 3. THE LOWER AUTHORITIES HAVE ERRED IN: A. MAKING TRANSFER PRICING ADJUSTMENT OF RS. 1,65,6 1,543/-; B. PASSING THE ORDERS WITHOUT DEMONSTRATING THAT TH E APPELLANT HAD MOTIVE OF TAX EVASION AND NOT APPRECIATING THAT NO ADDITION CAN BE MADE UNDER CHAPTER X AS TRANSFER PRICING ADJ USTMENT UNDER CHAPTER X IS NOT INCLUDED IN THE DEFINITION O F 'INCOME' ULS 2(24) OR UNDER CHAPTER IV OF THE IT ACT, 1961. THE ORDERS PASSED BY THE LOWER AUTHORITIES ARE THEREFORE BAD IN LAW A ND LIABLE TO BE QUASHED. GROUNDS RELATING TO COMPUTATION OF ALP 4. THE LOWER INCOME TAX AUTHORITIES HAVE ERRED IN: A. REJECTING COMPARABLES SELECTED BY THE APPELLANT AND CONDUCTING A FRESH TRANSFER PRICING ANALYSIS DESPITE ABSENCE O F ANY DEFECTS IN THE TRANSFER PRICING ANALYSIS SUBMITTED BY THE APPE LLANT; B. ADOPTING INAPPROPRIATE FILTERS LIKE 25% RPT FILT ER, ONE SIDED TURNOVER FILTER, ETC. IN THE PROCESS OF SELECTING C OMPARABLES; C. ADOPTING COMPANIES AS COMPARABLES EVEN THOUGH TH EY ARE NOT COMPARABLE IN RESPECT OF FUNCTIONS PERFORMED, RISKS ASSUMED, ASSETS UTILIZED, SIZE, TURNOVER, DESPITE HAVING UNU SUAL BUSINESS CIRCUMSTANCES OR HIGH MARGINS, ETC. THE LOWER INCOM E TAX AUTHORITIES HAVE ERRED IN ADOPTING FOLLOWING COMPAN IES AS COMPARABLES: I. GENESYS INTERNATIONAL CORPN. LTD. II. INFOSYS LTD. III. LARSEN & TURBO INFOTECH LTD. IV. PERSISTENT SYSTEMS LTD. D. NOT MAKING PROPER ADJUSTMENT FOR ENTERPRISE LEVE L AND TRANSACTIONAL LEVEL DIFFERENCES BETWEEN THE APPELLA NT AND THE COMPARABLE COMPANIES; E. NOT PROPERLY COMPUTING THE WORKING CAPITAL ADJUS TMENT; AND F. NOT RECOGNIZING THAT THE APPELLANT WAS INSULATED FROM RISKS, AS AGAINST COMPARABLES, WHICH ASSUME THESE RISKS AND T HEREFORE HAVE TO BE CREDITED WITH A RISK PREMIUM ON THIS ACC OUNT; 5. ASSUMING WITHOUT ADMITTING THAT THE ADJUSTMENT I S TO BE MADE, THE LOWER INCOME TAX AUTHORITIES ERRED IN LAW IN NO T ALLOWING HE BENEFIT OF +1- 5% THE VARIATION AS PER THE PROVISO TO SECTION 92C(2) OF THE ACT. GROUND RELATING TO CORPORATE TAX PAGE 3 OF 18 IT(TP)A NO.583/BANG/2017 6. THE LEARNED AO HAS ERRED IN DISALLOWING EMPLOYEE CONTRIBUTION TO PF PAID LATE AMOUNTING TO RS. 11,25,151/- AND TH E HONOURABLE DRP HAS ERRED IN CONFIRMING THE ACTION OF THE LEARN ED AO. ON FACTS AND CIRCUMSTANCES OF THE CASE AND LAW APPLICABLE, T HE IMPUGNED DISALLOWANCES OF RS. 11,25,151/- SHOULD BE DELETED. 7. THE LEARNED AO HAS ERRED IN NOT ALLOWING THE SET OFF OF BROUGHT FORWARD BUSINESS LOSS AND UNABSORBED DEPRECIATION R ELATING TO AY 2009-10 AND 2010-11 WHILE COMPUTING THE TOTAL INCOM E FOR THE YEAR UNDER CONSIDERATION. IN FACTS AND CIRCUMSTANCE S OF THE CASE AND LAW APPLICABLE, SET OFF OF BROUGHT FORWARD BUSI NESS LOSS AND UNABSORBED DEPRECIATION RELATING TO AY 2009-10 AND 20 10-11 SHOULD BE FULLY ALLOWED. 8. THE LOWER AUTHORITIES HAVE ERRED IN LEVYING A SU M OF RS. 31,29,333/- AS INTEREST UNDER SECTION 234B AND A SU M OF RS. 6,36,838/- AS INTEREST UNDER SECTION 234C. ON THE F ACTS AND IN THE CIRCUMSTANCES OF THE CASE, INTEREST UNDER SECTION 2 34B AND 234C IS NOT LEVIABLE. THE APPELLANT DENIES ITS LIABILITY TO PAY INTEREST UNDER SECTION 234B AND 234C. EVEN OTHERWISE THE AMO UNT COMPUTED AS INTEREST IS EXCESSIVE. ADDITIONAL GROUNDS OF APPEAL 9. THE LOWER AUTHORITIES HAVE ERRED IN REJECTING TH E SEGMENTAL RESULTS PREPARED BY THE APPELLANT ON UNJUSTIFIABLE GROUNDS AND ALLOCATING COSTS BETWEEN THE ASSOCIATED ENTERPRISE AND NON- ASSOCIAT ED ENTERPRISE SEGMENT ON THE BASIS OF REVENUE, WHICH IS NOT APPRO PRIATE IN THE FACT AND CIRCUMSTANCES OF THE CASE. THE APPELLANT SUBMITS THAT EACH OF THE ABOVE GROUND S/ SUB-GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHER. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMI T, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL, AT ANY TIME BEFORE OR AT, THE TIME OF HEARING, OF THE APPEAL, SO AS TO ENABLE THE INCOME- TAX APPELLATE TRIBUNAL TO DECIDE THE APPEAL ACCORDING TO LAW. THE APPELLANT PRAYS ACCORDINGLY. BRIEF FACTS OF THE CASE ARE AS UNDER: 2. ASSESSEE IS A PRIVATE LIMITED COMPANY AND FILED ITS RETURN OF INCOME FOR YEAR UNDER CONSIDERATION DECLA RING TOTAL INCOME AT NIL. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICES UNDER SECTION 143(2) AND 142(1) OF THE ACT WAS ISSUED, IN RESPONSE TO WHICH, REPRESENTATIVE OF ASS ESSEE APPEARED BEFORE LD.AO AND SUBMITTED DETAILS AS CALL ED FOR. PAGE 4 OF 18 IT(TP)A NO.583/BANG/2017 ON PERUSAL OF INFORMATION FURNISHED BY ASSESSEE, LD .AO OBSERVED THAT ASSESSEE HAD INTERNATIONAL TRANSACTIO N WITH ITS ASSOCIATED ENTERPRISE EXCEEDING RS.15 CRORES, AND ACCORDINGLY, CASE WAS REFERRED TO TRANSFER PRICING OFFICER. ON RECEIPT OF REFERENCE UNDER SECTION 92CA, LD.TPO CAL LED FOR ECONOMIC DETAILS OF INTERNATIONAL TRANSACTION IN FO RM 3CEB. LD.TPO NOTED THAT, ASSESSEE WAS CARRYING OUT SOFTWA RE DEVELOPMENT AND SUPPORT SERVICES FOR ITS AE BEING, ENSTAGE INC, USA. 3. IT WAS NOTED THAT, ASSESSEE IS A PROVIDER OF SOF TWARE DEVELOPMENT AND SUPPORT SERVICES FOR CARD PAYMENT AUTHENTICATION AND PROCESSING, SOLUTIONS, AND FOCUS ED ON GLOBAL GROWTH MARKET IN PREPAID, ONLINE AND MOBILE PAYMENTS. LD.TPO NOTED THAT, ASSESSEE UNDERTOOK ANA LYSIS SELECTING COST PLUS METHOD AS MOST APPROPRIATE METH OD. LD.TPO NOTED THAT, ASSESSEE SELECTED 11 COMPARABLES WITH AVERAGE MARGIN OF 19.04%. ASSESSEE COMPUTED ITS MAR GIN TO BE AT 19.23%, AND SINCE IT WAS WITHIN +/-5% OF ARMS LENGTH MARGIN OF COMPARABLES, THE PRICE CHARGED BY ASSESSE E IN SOFTWARE DEVELOPMENT SERVICE SEGMENT WAS CONSIDERED TO BE AT ARMS LENGTH. 4. LD.TPO REJECTED COMPARABLES SELECTED BY ASSESSEE . IT IS ALSO BEEN NOTED THAT LD.TPO NOTED THAT ASSESSEE IN CURRED PROFIT OF 15.79% FROM ITS ASSOCIATED ENTERPRISE, WH EREAS, IT HAD NET LOSS OF 43% FROM ITS NON-AE TRANSACTION. LD .TPO CALLED UPON ASSESSEE TO FURNISH BASIS OF ALLOCATION OF COSTS. LD.TPO NOTED THAT, ASSESSEE HAS NOT REPORTED SEGMEN T WISE REVENUE IN PROFIT AND LOSS ACCOUNT AND THE SEGMENTA TION IS PAGE 5 OF 18 IT(TP)A NO.583/BANG/2017 GIVEN ONLY IN TRANSFER PRICING STUDY FOR BENCHMARKI NG. LD.TPO, THEREFORE REJECTED SEGMENTAL INFORMATION P ROVIDED BY ASSESSEE SUBSEQUENTLY. HE ALSO NOTED THAT ASSESS EE DID NOT SUBSTANTIATE COST ALLOCATION BASIS TO THE SEGME NTS BEING AE NON-AE AND DOMESTIC SEGMENT. LD.TPO THUS REWORKE D SEGMENTAL COST, BASED ON RATIO OF INCOME TO TOTAL T URNOVER BETWEEN ASSOCIATED ENTERPRISE AND NON-ASSOCIATED EN TERPRISE AS UNDER: PARTICULARS AE NON AE TOTAL OPERATING REVENUE 17,29,208,263 17,195,991 146,404,254 OPERATING EXPENDITURE 125,508,877 16,703,649 142,212,526 OPERATING PROFIT 3,699,386 492,342 4,191,728 OP/OC 2.95% 2.95% OP/OR 2.86% 2.86% 5. LD.TPO THUS COMPUTED MARGIN OF AE AT 2.95%, THER EBY ALLOCATING 88.25% COST TO AE SEGMENT AND NON-AE SEG MENT. LD.TPO WAS THUS OF THE VIEW THAT, COMPARABLES IDENT IFIED BY ASSESSEE AND APPROACH ADOPTED WERE NOT APPROPRIATE. LD.TPO THUS UNDERTOOK FRESH ECONOMIC ANALYSIS AND R EJECTED CERTAIN COMPARABLE COMPANIES IDENTIFIED BY ASSESSEE BASED ON VARIOUS FILTERS. LD.TPO COMPUTED AVERAGE NET MAR GIN OF COMPARABLE COMPANIES AT 16.49% ON OPERATING COST AS AGAINST GROSS MARGIN OF 19.23% UNDER CPM COMPUTED B Y ASSESSEE IN TP DOCUMENTATION REPORT. 10 NEW COMPARA BLES IDENTIFIED BY LD.TPO WERE AS UNDER: SN NAME OF THE TAXPAYER OP/OC 1 DATAMATICS GLOBAL SERVICES LTD. 14.57% PAGE 6 OF 18 IT(TP)A NO.583/BANG/2017 2 GENESYS INTERNATIONAL CORPN. LTD. 30.09% 3 C R A TECH NO ANALYTICS LTD. 17.24% 4 INFOSYS LTD. 43.10% 5 LARSEN & TOUBRO INFOTECH LTD. 25.47% 6 MINDTREE LTD. 15.01% 7 PERSISTENT SYSTEMS LTD. 27.47% 8 R S SOFTWARE (INDIA) LTD. 12.15% 9 SASKEN COMMUNICATION TECHNOLOGIES LTD. SPRY RESOURCES INDIA PVT. LTD. 26.18% 10 AVERAGE 22.63% 6. LD.TPO THUS COMPUTED PROPOSED ADJUSTMENT BEING SHORTFALL UNDER SECTION 92CA AT RS.1,65,61,543. 7. LD. AO WHILE PASSING DRAFT ASSESSMENT ORDER, FUR THER MADE ADDITION IN THE HANDS OF ASSESSEE AMOUNTING TO RS.11,25,151/- BEING EMPLOYEES CONTRIBUTION TO PF, THAT WAS DEPOSITED BELATEDLY AFTER SPECIFIED DUE DATE. T HESE PAYMENTS WERE TREATED AS INCOME IN THE HANDS OF ASS ESSEE, IN TERMS OF PROVISIONS OF SECTION 2 (24) (X) READ W ITH SECTION 36 (1) (VA) OF THE ACT. 8. AGGRIEVED BY PROPOSED ADDITIONS, ASSESSEE FILED OBJECTIONS BEFORE DRP. 9. DRP UPHELD COMPARABLES SELECTED BY LD.TPO AND REJECTED CHALLENGE IN RESPECT OF REWORKING OF MARGI N OF ASSESSEE BY HOLDING THAT, ASSESSEE DID NOT SUBSTANT IATE BASIS OF COST ALLOCATION. PAGE 7 OF 18 IT(TP)A NO.583/BANG/2017 10. LD. AO UPON RECEIPT OF DIRECTIONS BY DRP, PASSE D FINAL ASSESSMENT ORDER MAKING ADDITION OF RS.2,14,38,480/ - IN THE HANDS OF ASSESSEE. 11. AGGRIEVED BY ORDER OF LD.AO, ASSESSEE IS IN APP EAL BEFORE US NOW. 12. AT THE OUTSET, LD.AR SUBMITTED THAT, ASSESSEE F ILED APPLICATION FOR ADMISSION OF ADDITIONAL GROUND DATE D 12.01.2018, WHEREIN, ASSESSEE CHALLENGES COST ALLOC ATION MADE BY LD.TPO TO AE AND NON-AE SEGMENT, THEREBY REWORKING MARGIN OF ASSESSEE IN RESPECT OF INTERNAT IONAL TRANSACTION. HE SUBMITTED THAT, THIS ISSUE WAS INAD VERTENTLY MISSED OUT WHILE FILING ORIGINAL GROUNDS BEFORE THI S TRIBUNAL. HOWEVER THIS ISSUE HAS BEEN RAISED AND CONSIDERED B EFORE DRP. HE THUS SUBMITTED THAT, NO NEW FACTS NEEDS TO BE LOOKED UPON TO ADJUDICATE THIS ISSUE AS IT EMANATES FROM THE RECORDS PLACED BEFORE US. PLACING RELIANCE ON DECIS ION IS OF HONBLE SUPREME COURT IN CASE OF NTPC LTD. VS. CIT REPORTED IN 229 ITR 383 , HE SUBMITTED THAT, GROUNDS RAISED IN APPLICATION FOR ADDITIONAL GROUNDS MAY BE ADMITTED IN THE INTEREST OF NATURAL JUSTICE. 13. LD.CIT.DR COULD NOT CONTROVERT THE SUBMISSIONS ADVANCED BY LD.AR. 14. WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH SI DES IN LIGHT OF RECORDS PLACED BEFORE US. 14.1 WE ARE CONVINCED THAT ADDITIONAL GROUND OF APP EAL EMANATE FROM THE FACTS AVAILABLE ON RECORD AND HAS BEEN RAISED AND CONSIDERED BY AUTHORITIES BELOW. THE AD MISSION OF GROUND DOES NOT REQUIRE ANY FURTHER INVESTIGATI ON INTO THE PAGE 8 OF 18 IT(TP)A NO.583/BANG/2017 FACTS. NOTHING CONTRARY HAD BEEN BROUGHT TO OUR NO TICE BY LD.CIT.DR. 15. BASED ON ABOVE, WE ADMIT FOLLOWING ADDITIONAL GROUND OF APPEAL: ADDITIONAL GROUNDS OF APPEAL 9. THE LOWER AUTHORITIES HAVE ERRED IN REJECTING TH E SEGMENTAL RESULTS PREPARED BY THE APPELLANT ON UNJUSTIFIABLE GROUNDS AND ALLOCATING COSTS BETWEEN THE ASSOCIATED ENTERPRISE AND NON- AS SOCIATED ENTERPRISE SEGMENT ON THE BASIS OF REVENUE, WHICH I S NOT APPROPRIATE IN THE FACT AND CIRCUMSTANCES OF THE CASE. THE APPELLANT SUBMITS THAT EACH OF THE ABOVE GROUND S/ SUB-GROUNDS ARE INDEPENDENT AND WITHOUT PREJUDICE TO ONE ANOTHE R. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, VARY, OMI T, SUBSTITUTE OR AMEND THE ABOVE GROUNDS OF APPEAL, AT ANY TIME BEFO RE OR AT, THE TIME OF HEARING, OF THE APPEAL, SO AS TO ENABLE THE INCOME-TAX APPELLATE TRIBUNAL TO DECIDE THE APPEAL ACCORDING T O LAW. THE APPELLANT PRAYS ACCORDINGLY. 16. REFERRING TO REVISED GROUNDS OF APPEAL FILED BY ASSESSEE, LD.AR SUBMITTED THAT, GROUND NO. 1-3,5 ARE GENERAL IN NATURE AND THEREFORE DO NOT REQUIRE ADJUDICATION 17.1 GROUND NO.4 IS IN RESPECT OF COMPARABLES Y SELECTED BY LD.TPO. MANY SUB GROUNDS HAVE BEEN RAISED ON THIS I SSUE BY ASSESSEE. HOWEVER, LD.AR SUBMITTED THAT IF, SUB GROUND (C) IS CONSIDERED ON FUNCTIONALITY, THE OTHER GROUNDS WOULD BE ACADEMIC IN NATURE. LD.AR SUBMITTED THAT ASSESSE E SEEKS EXCLUSION OF 4 COMPARABLES IN SUB GROUND (C) BEING: GENESIS INTERNATIONAL CORPORATION LTD INFOSYS LTD LARSEN AND TOUBRO INFOTECH LTD PERSISTENT SYSTEMS LTD 17.2 IT HAS BEEN SUBMITTED BY LD.AR THAT THESE COMP ARABLES HAVE BEEN CONSIDERED BY COORDINATE BENCH OF THIS TRIBUNAL IN PAGE 9 OF 18 IT(TP)A NO.583/BANG/2017 CASE OF CGI INFORMATION SYSTEMS AND MANAGEMENT CONSULTANTS PVT.LTD VS ACIT REPORTED IN (2018) 94 TAXMANN.COM 97 FOR ASSESSMENT YEAR 2012-13. IT IS ALSO SUBMITTED THAT, FUNCTIONAL PROFILE OF ASSESSEE IS S AME AS THAT OF ASSESSEE IN CGI INFORMATION SYSTEMS AND MANAGEME NT CONSULTANTS PRIVATE LTD., IN AS MUCH, AS THE SAID COMPANY WAS ALSO INVOLVED IN PROVIDING SOFTWARE DEVELOPMENT SERVICES TO ITS AE. IT HAS BEEN SUBMITTED THAT LD.TPO THER EIN CHOSE SIMILAR COMPARABLES OUT OF WHICH 7 COMPARABLES CHOS EN BY LD.TPO IN PRESENT CASE ARE SAME. IT HAS BEEN SUBMIT TED THAT, OBSERVATIONS OF COORDINATE BENCH OF TRIBUNAL IN CASE OF CGI (SUPRA) WOULD BE APPLICABLE TO THE PRESENT CASE OF ASSESSEE. 17.3 LD.CIT.DR SUBMITTED THAT, DRP REJECTED SIMILAR SUBMISSIONS OF ASSESSEE. HE PLACED RELIANCE ON ORDE RS PASSED BY AUTHORITIES BELOW. 17.4 WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH S IDES IN LIGHT OF RECORDS PLACED BEFORE US. 17.5 WE HAVE ALSO REFERRED TO DECISION RELIED UPON BY LD.AR IN CASE OF CGI INFORMATIONS (SUPRA) , WHEREIN 4 COMPARABLES WHICH ARE BEING SOUGHT FOR EXCLUSION BY ASSESSEE BE FORE US, WAS DEALT WITH. WE ALSO NOTE THAT, FUNCTIONAL PROFI LE OF ASSESSEE BEFORE US AND ASSESSEE IN CASE OF (CGI INFORMATION (SUPRA) IS IDENTICAL IN AS MUCH AS THE COMPANY WAS INVOLVED IN PROVIDING SOFTWARE DEVELOPMENT SERVICES TO ITS AE. IT IS ALSO NOTED THAT THE COMPARABLES CHOSEN BY LD. TPO IN CASE OF CGI INFORMATION (SUPRA) ARE SAME AS IN PRESENT CASE FOR THE SAME YEAR UNDER CONSIDERATION. PAGE 10 OF 18 IT(TP)A NO.583/BANG/2017 17.6 WE NOTE THAT THIS TRIBUNAL , WHILE CONSIDERING 4 COMPARABLES, WHICH ASSESSEE IS SEEKING TO EXCLUDE, OBSERVED AND HELD AS UNDER: 28. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED BEF ORE US THAT THE COMPARABILITY OF THE 3 COMPANIES OUT OF THE AFO RESAID 4 COMPANIES WHICH THE ASSESSEE SEEKS TO EXCLUDE FROM THE LIST OF COMPARABLE COMPANIES CHOSEN BY THE TPO VIZ., INFOSY S LTD., LARSEN & TOUBRO INFOTECH LTD. AND PERSISTENT SYSTEM S LTD., WERE CONSIDERED BY THE ITAT DELHI BENCH IN THE CASE OF A GILIS INFORMATION TECHNOLOGIES INDIA (P.) LTD. V. ASSTT. CIT [2018] 89 TAXMANN.COM 440 (DELHI - TRIB.) FOR THE SAME AY 201 2-13. IN THIS REGARD IT WAS SUBMITTED THAT THE FUNCTIONAL PROFILE OF THE ASSESSEE IS SAME AS THAT OF THE ASSESSEE IN THE CASE OF AGIL IS INFORMATION TECHNOLOGIES INDIA (P.) LTD. (SUPRA), IS IDENTICAL INASMUCH AS THE SAID COMPANY WAS ALSO INVOLVED IN PROVIDING SWD SER VICES TO ITS AE AND THE TPO HAD CHOSEN 16 COMPARABLE COMPANIES O UT OF WHICH 6 COMPANIES CHOSEN BY THE TPO IN THE CASE OF THE ASSESSEE FOR THE PURPOSE OF COMPARABILITY WERE THE SAME. HIS SUBMISSION WAS THAT .THE DECISION RENDERED BY THE TRIBUNAL IN THE CASE OF AGILIS INFORMATION TECHNOLOGIES INDIA (P.) LTD. (SUPRA) WOULD BE EQUALLY APPLICABLE TO THE ASSESSEE IN THE PRESENT C ASE ALSO. THE LEARNED DR. SUBMITTED THAT THE DRP IN ITS DIRECTION S HAS MERELY ACCEPTED WITH THE REASONING OF THE IPO AND THEREFOR E THE ISSUE OF EXCLUSION OF THESE COMPANIES SHOULD BE DIRECTED TO BE EXAMINED AFRESH BY THE DRP. 29. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN THE C ASE OF AGILIS INFORMATION TECHNOLOGIES INDIA (P.) LTD. (SUPRA), THIS TRIBUNAL CONSIDERED THE COMPARABILITY OF THE 3 COMP ANIES WHICH THE ASSESSEE SEEKS TO EXCLUDE FROM THE FINAL LIST O F COMPARABLE COMPANIES CHOSEN BY THE TPO. THE FUNCTIONAL PROFILE OF ME ASSESSEE AND THAT OF THE ASSESSEE IN THE CASE OF AG ILIS INFORMATION TECHNOLOGIES INDIA (P.) LTD. (SUPRA), I S IDENTICAL INASMUCH AS THE SAID COMPANY WAS ALSO INVOLVED IN P ROVIDING SWD SERVICES TO ITS AE AND THE TPO HAD CHOSEN SOME COMPARABLE COMPANIES WHICH WERE ALSO CHOSEN BY THE TPO IN THE CASE OF THE ASSESSEE FOR THE PURPOSE OF COMPARABILITY. IN THE A FORESAID DECISION THE TRIBUNAL HELD ON THE COMPARABILITY OF THE 3 COMPANIES WHICH THE ASSESSEE SEEKS TO EXCLUDE AS FOLLOWS: (A) INFOSYS LTD., WAS EXCLUDED FROM THE LIST O F COMPARABLE COMPANIES BY FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT V. AGNITY INDIA TECHN OLOGIES (P.) LTD. [2013] 36 TAXMANN.COM 289/219 TAXMAN 26 (DELHI). THE DISCUSSION IS CONTAINED IN PARAGRAPHS 4.5 TO 4.7 OF THE TRIBUNAL'S ORDER. THE TRIBUNAL ACCEPTED THAT INFOSYS LTD. IS A GIANT RISK TAKING COMPANY AND ENGAGED IN DEVELOPMENT AND SALE OF SOFTWARE PRODUCTS AND ALSO OWNS PAGE 11 OF 18 IT(TP)A NO.583/BANG/2017 INTANGIBLE ASSETS AND THEREFORE NOT COMPARABLE WITH A SOFTWARE DEVELOPMENT SERVICE PROVIDER SUCH AS THE ASSESSEE IN THAT CASE. (B) LARSENT & TOURBRO INFOTECH LTD., WAS EXCLUDED FROM THE LIST OF COMPARABLE COMPANIES BY RELYING ON THE DECISION OF THE DELHI BENCH OF ITAT IN THE CASE OF SAXO INDIA (P.) LTD. V. ASSTT. CIT [2016] 67 TAXMANN.COM 155 (DELHI - TRIB.). THE DISCUSSION IS CONTAINED IN PARAGRAPHS 4.8 TO 4. 10 OF THE TRIBUNAL'S ORDER. THE TRIBUNAL HELD THAT L & T INFO TECH LTD., WAS A SOFTWARE PRODUCT COMPANY AND SEGMENTAL INFORMATION ON SWD SERVICES WAS NOT AVAILABLE. THE TRIBUNAL ALSO NOTICED THAT THE APPEAL FILED BY THE REVENUE AGAINST THE TRIBUNAL'S ORDER WAS DISMISSED BY THE H ON'BLE DELHI HIGH COURT IN ITA NO.682/2016. ( C) PERSISTENT SYSTEMS LTD., WAS EXCLUDED FROM T HE LIST OF COMPARABLE COMPANIES ON THE GROUND THAT THIS COMPAN Y WAS A SOFTWARE PRODUCT COMPANY AND SEGMENTAL INFORMATION ON SWD SERVICES WAS NOT AVAILABLE. THE TRIBUNAL IN COMING TO THE ABOVE CONCLUSION REFERRED TO THE DECISION RENDERED BY ITAT DELHI BENCH IN THE CASE O F CASH EDGE INDIA (P.) LTD. V. ITO ITA NO.64/DEL/2015 ORDE R DATED 23.9.2015 AND THE DECISION OF HON'BLE DELHI HIGH CO URT IN THE CASE OF SAXO INDIA PVT. LTD. (SUPRA). THE FINDI NGS IN THIS REGARD ARE CONTAINED IN PARAGRAPHS 4.14 TO 4.16 OF ITS ORDER. 30. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNA L WE HOLD THAT THE AFORESAID 3 COMPANIES BE EXCLUDED FROM THE FINAL LIST OF COMPARABLE COMPANIES FOR THE PURPOSE OF ARRIVING AT THE ARITHMETIC MEAN OF COMPARABLE COMPANIES FOR THE PURPOSE OF COM PARISON WITH THE PROFIT MARGINS. IN THIS REGARD WE ARE ALSO OF THE VIEW THAT THE PLEA OF THE LEARNED DR FOR A REMAND OF THE ISSU E TO THE DRP ON THE GROUND THAT THE DRP HAS NOT GIVEN ANY REASONS I N ITS DIRECTIONS CANNOT BE ACCEPTED. THE DRP BAS ENDORSED THE VIEW OF THE TPO IN ITS DIRECTIONS AND THEREFORE THE REASONS GIVEN BY THE TPO SHOULD BE REGARDED AS THE CONCLUSIONS OF THE DR P. 31. THE LEARNED DR. NEXT SUBMITTED THAT GENESYS INTERN ATIONAL CORPORATION LTD., SHOULD BE EXCLUDED FROM THE LIST OF COMPARABLE COMPANIES. THE COMPARABILITY OF THIS COMPANY WITH T HE ASSESSEE HAS BEEN DISCUSSED BY THE TPO IN PAGE-11 OF HIS ORD ER. THE ASSESSEE OBJECTED TO INCLUSION OF THIS COMPANY IN T HE LIST OF COMPARABLE COMPANIES FOR THE REASON THAT THIS COMPA NY IS FUNCTIONALLY DIFFERENT AND OWNS INTANGIBLE ASSETS W HICH ARE PECULIAR ONLY WHEN THE ASSESSEE OWNS SOFTWARE PRODU CTS. THE OBJECTIONS OF THE ASSESSEE ARE CONTAINED IN ITS LET TER DATED 22.12.2015 ADDRESSED TO THE TPO AND IN ANNEXURE-B T O THE SAID LETTER. THE RELEVANT PORTION OF THE OBJECTION IS AT PAGES 711-713 OF THE ASSESSEE'S PAPER BOOK. ACCORDING TO THE ASSESSE E THIS COMPANY IS ENGAGED IN PROVIDING GEOGRAPHICAL INFORM ATION PAGE 12 OF 18 IT(TP)A NO.583/BANG/2017 SERVICES COMPRISING OF PHOTOGRAMMETRY, REMOTE SENSI NG, CARTOGRAPHY, DATA CONVERSION, STATE OF THE ART TERR ESTRIAL AND 3D GEOCONTENT INCLUDING LOCATION BASED AND OTHER COMPU TER BASED RELATED SERVICES. PAGC-38 OF THE ANNUAL REPORT 2012 CONTAINING THE ABOVE DESCRIPTION WAS BROUGHT TO THE NOTICE OF THE TPO, ATTENTION OF THE TPO WAS INVITED TO THE DIRECTORS REPORT TO T HE SHAREHOLDERS AT PAGE II OF THE ANNUAL REPORT 2012, WHEREIN THE D IRECTORS HAVE INFORMED THE SHAREHOLDERS THAT THE COMPANY CONTINUE D IN ITS JOURNEY, TO BE INNOVATORS AND LEADERS IN THE FIELDS OF LOCATION BASED SERVICES RELATED GEOPLATFORMS AND ADVANCED SU RVEY TECHNIQUES. THERE IS NO SEGMENTAL REPORTING BECAUSE IT IS STATED IN THE ANNUAL REPORT THAT THIS COMPANY IS ONLY IN ONE SEGMENT VIZ., GIS BASED SERVICES AND THEREFORE THERE IS NO REQUIR EMENT OF SEGMENTAL REPORTING. IT WAS ALSO SUBMITTED THAT THI S COMPANY OWNS SUBSTANTIAL INTANGIBLES EQUIVALENT TO 10.42% O F ITS TOTAL TURNOVER. 32. THE TPO HOWEVER HAS REGARDED THIS COMPANY AS A COMPARABLE COMPANY BY OBSERVING THAT THIS COMPANY D EVELOPS SOFTWARE FOR MAPPING AND GEOSPATIAL SERVICES AND OP ERATES A FEW DEVELOPMENT CENTRES IN INDIA. THE COMPANY IS PREDOM INANTLY INTO SOFTWARE DEVELOPMENT SERVICES. THE INTANGIBLES IN T HE POSSESSION OF THE COMPANY ARE ONLY THE GIS DATABASE WHICH IS O NLY DEPRECIATION. IT DOES NOT ADD SIGNIFICANT VALUE TO THE COMPANY. 33. THE OBJECTIONS AS PUT FORTH BEFORE THE TPO WERE RE ITERATED BEFORE THE DRP. THE DRP IN PARAGRAPHS 6.2.2 & 6.2.3 OF ITS DIRECTIONS DEALT WITH THIS ISSUE AS FOLLOWS: '6.2.2 THE FUNCTIONS OF THE ASSESSEE COMPANY HAVE B EEN EXAMINED IN DETAIL. A FINANCIAL PRODUCT ON WHICH TH E SETTLEMENT SYSTEM OF BANK RUNS IS A REAL TIME SYSTE M. IT IS VERY COMPLEX. ANY BUG OR PROBLEM IN IT CAN CRASH TH E ENTIRE BANKING SYSTEM OF SEVERAL NATIONS. THE ASSESSEE'S C LAIM OF PROVIDING ONLY BASIC SOFTWARE SERVICES IS REJECTED. 6.2.3 THE PANEL HOLDS THAT THE SOFTWARE FOR FINANCI AL PRODUCT IS MUCH MORE COMPLEX THAN A GEOSPATIAL SOFTWARE. TH EREFORE, THE PANEL HOLDS THAT THE GENESYS IS A VALID COMPARA BLE.' 34. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T THE DRP HAS COMPLETELY PROCEEDED ON WRONG FACTS WHICH DOES NOT EITHER EMANATE FROM THE ORDER OF THE TPO OR THE SUBMISSION S OF THE ASSESSEE. HE REITERATED SUBMISSIONS MADE BEFORE THE TPO AND DRP. THE LEARNED OR RELIED ON THE ORDER OF THE DRP/ TPO. 35. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. IT IS CLEAR FROM THE MATERIAL BROUGHT TO THE NOTICE OF THE TPO BY THE ASSESSEE THAT THIS: COMPANY RENDERS MAPPING AND GEOSPATIAL SERVICES. IN RENDERING SUCH SERVICES IT DEVELOPS SOFTWARE. BUT THAT DOES NOT MEAN THAT THIS COMPANY IS IN THE BUSINESS OF SOFTWARE DEVELOPMENT. THE BUSINESS PROF ILE OF THIS COMPANY AS PER THE ANNUAL REPORT DOES NOT SHOW THAT THIS COMPANY IS INTO SOFTWARE DEVELOPMENT SERVICE. THE O NLY LINE OF PAGE 13 OF 18 IT(TP)A NO.583/BANG/2017 BUSINESS THAT THIS COMPANY CARRIES ON IS RENDERING GIS BASED SERVICES AND THIS IS CLEAR FROM THE ANNUAL REPORT W HICH SPECIFIES THAT SINCE THE COMPANY CARRIES ON ONLY ONE LINE OF BUSINESS VIZ., GIS BASED SERVICES THERE IS NO NEED TO GIVE ANY SEG MENTAL RESULTS. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THERE IS NO BASIS FOR THE TPO TO CONCLUDE THAT THIS COMPANY IS PREDOMINAN TLY INTO SOFTWARE-DEVELOPMENT SERVICES. THE PRESENCE OF INTA NGIBLE ASSETS IS INDICATIVE OF THE FACT THAT THIS COMPANY IS NOT IN SOFTWARE DEVELOPMENT SERVICES BUSINESS. THE TPO HAS OVERLOOK ED THIS ASPECT AND PROCEEDED ON THE BASIS THAT THE PRESENCE OF INTANGIBLE ASSETS WOULD NOT BE SIGNIFICANT. RULE 10B(2) OF THE INCOME TAX RULES, 1962 (RULES) SPECIFICALLY PROVIDES THAT FOR THE PURPOSES OF SUB-RULE (1) OF RULE 10B, THE COMPARABILITY OF AN I NTERNATIONAL TRANSACTION WITH AN UNCONTROLLED TRANSACTION SHALL BE JUDGED WITH REFERENCE TO THE FOLLOWING, NAMELY: (A) THE SPECIFIC CHARACTERISTICS OF THE PROPERT Y TRANSFERRED OR SERVICES PROVIDED IN EITHER TRANSACTION; (B) THE FUNCTIONS PERFORMED, TAKING INTO ACCOUN T ASSETS EMPLOYED OR TO BE EMPLOYED AND THE RISKS ASSUMED, B Y THE RESPECTIVE PARTIES TO THE TRANSACTIONS; IN THE GIVEN FACTS AND CIRCUMSTANCES, WE ARE OF THE VIEW THAT GENESYS INTERNATIONAL CORPORATION LTD., CANNOT BE C ONSIDERED AS A COMPARABLE COMPANY AND THE SAID COMPANY SHOULD BE E XCLUDED FROM THE FINAL LIST OF COMPARABLE COMPANIES. WE HOL D ACCORDINGLY. 17.7 NOTHING CONTRARY HAS BEEN POINTED BY REVENUE I N PRESENT FACTS TO DEVIATE FROM THE ABOVE VIEW TAKEN IN RESPECT OF THE COMPARABLES. RESPECTFULLY FOLLOWING ABOVE D ECISION OF TRIBUNAL , WE DIRECT EXCLUSION OF 4 COMPARABLES ALLEGED HERE IN BY ASSESSEE FROM FINALIST. ACCORDINGLY THIS GROUND RAISED BY ASSESSEE STANDS ALLOWED PARTLY. 18. ADDITIONAL GROUND RAISED BY ASSESSEE IS IN RESP ECT OF INTERNATIONAL TRANSACTION AND THEREFORE WE WOULD AD JUDICATE THIS GROUND 1 ST BEFORE PROCEEDING FURTHER. IN ADDITIONAL GROUND, ASSESSEE CHALLENGES COST ALLOCATION BY LD. TPO TO DETERMINE MARGIN OF ASSESSEE AT 2.95%. IT HAS BEEN SUBMITTED BY LD.AR THAT, AS PER STATEMENT OF WORK ENTERED INTO BY ASSESSEE WITH ITS ASSOCIATED ENTERPRISE, AS SESSEE PAGE 14 OF 18 IT(TP)A NO.583/BANG/2017 WOULD BE CHARGING COST +15% OF SERVICES PROVIDED. THE COST INCLUDES DIRECT COST SPECIFICALLY IDENTIFIED FOR TH E WORK AS WELL AS INDIRECT COST ALLOCATED TO THE WORK. IT IS ALSO SUBMITTED THAT, ASSESSEE WAS MAINTAINING SEPARATE R ECORDS FOR THIS WORK AND OTHER SEGMENTS, AND HENCE CAPTURE D SPECIFIC COST FOR EACH SEGMENT AND PRICING FOR AE COMPANY AT 15% ON THE COST SO INCURRED. 18.1 LD.AR SUBMITTED THAT, ASSESSEE IS ALSO INTO ES TABLISHING DOMESTIC BUSINESS OF UNDERTAKING CARD PAYMENT AUTHENTICATION AND SOFTWARE OPERATIONS AND SUPPORT SERVICES TO 3 RD PARTIES. HE SUBMITTED THAT LD.TPO ERRED IN COMPUT ING PROFIT LEVEL INDICATOR BASED ON OVERALL STATEMENT O F PROFIT AND LOSS ACCOUNT OF ASSESSEE. IT IS ALSO SUBMITTED THAT , OPERATING PROFIT BY OPERATING COST OF ASSESSEE FROM SOFTWARE DEVELOPMENT AND SUPPORT SERVICES COMES TO 15.79%, W HICH IS AS PER THE MASTER SERVICE AGREEMENT, READ WITH STATEMENT OF WORK. LD.AR REFERRED TO PAGE 175-176 OF PAPER BO OK, WHEREIN ISSUE HAS BEEN ADDRESSED IN GREAT DETAIL. REFERRING TO PAGE 195 OF PAPER BOOK LD.AR SUBMITTED THAT, EAC H COST HAS BEEN ALLOCATED BY ASSESSEE UNDER SPECIFIC HEAD , WHICH HAS NOT BEEN CONSIDERED BY LD.AO/TPO/DRP. HE THUS OBJECTED FOR REWORKING OF COST ALLOCATION CARRIED OUT BY LD. TPO. 18.2 ON THE CONTRARY LD. CIT DR SUBMITTED THAT, IS SUE MAY BE SENT BACK TO AUTHORITY IS BELOW FOR VERIFICATION IN ACCORDANCE WITH SUBMISSIONS/EVIDENCES FILED BY ASS ESSEE. 18.3 WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH S IDES IN LIGHT OF RECORDS PLACED BEFORE US. AT PAGE 4 OF ORDER PAGE 15 OF 18 IT(TP)A NO.583/BANG/2017 PASSED BY LD.TPO UNDER 92CA, WE NOTE THAT, ASSESSEE FILED REVISED STATEMENT OF COST ALLOCATION, HOWEVER, THE SAME WAS NOT CONSIDERED BY LD.TPO/DRP, FOR THE REASON THAT, BASIS OF SUCH ALLOCATION WAS NOT SUBMITTED/EXPLAINED BY ASSE SSEE. IN THE INTEREST OF JUSTICE WE DEEM IT APPROPRIATE T O REMAND THE ISSUE TO DRP FOR VERIFYING THE SAME. ASSESSEE I S DIRECTED TO FILE ALL NECESSARY DOCUMENTS TO SUBSTANTIATE THE BASIS OF SUCH ALLOCATION IN ASCERTAINING MARGIN OF ASSESSE IN RESPECT OF INTERNATIONAL TRANSACTION UNDERTAKEN BY ASSESSEE WITH ITS ASSOCIATED ENTERPRISE. DRP SHALL THEN PASS A REASON ED ORDER BY GRANTING PROPER OPPORTUNITY OF BEING HEARD TO AS SESSEE IN ACCORDANCE WITH LAW. ACCORDINGLY, ADDITIONAL GROUND NO.9 RAISED BY ASSES SEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 19. GROUND NO.6 IS IN RESPECT OF DISALLOWANCE OF EMPLOYEE CONTRIBUTION TO PF BELATEDLY PAID AMOUNTING TO RS.11,25,151/-. 19.1 LD. A.R. SUBMITTED THAT, AUTHORITIES BELOW DID NOT CONSIDER VARIOUS DECISION OF HONBLE SUPREME COURT AND JURISDICTIONAL HIGH COURT ON THIS ISSUE. HE SUBMITT ED THAT, DRP RELIED ON CBDT CIRCULAR NO. 22 OF 2015 DATED 17/12/2015 WHEREIN IT IS NOTED THAT, DECISION OF (HONBLE SUPREME COURT) IN CASE OF CIT VS ALOMG EXTRUSION LTD; REPORTED IN 85 TAXMANN 416 IS NOT APPLICABLE TO PAYMENTS COVERED UNDER SECTION 36 (1) (VA) OF THE ACT. 19.2 LD.CIT.DR PLACED RELIANCE ON ORDERS PASSED BY AUTHORITIES BELOW. PAGE 16 OF 18 IT(TP)A NO.583/BANG/2017 19.3 WE HAVE PERUSED SUBMISSIONS ADVANCED BY BOTH S IDES IN LIGHT OF RECORDS PLACED BEFORE US. IN OUR OPINION THIS ISSUE NOW STANDS SETTLED IN FAV OUR OF ASSESSEE BY DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS SABARI ENTERPRISES REPORTED IN (2008) 298 ITR 141 , WHEREIN HONBLE COURT HELD THAT, IN VIEW OF STATUTORY PROVISIONS OF SECTION 2( 24 )(X), SECTION 36(1)(VA) AND SECTION 43B(B), CONTRIBUTIONS MADE BY ASSESSEE TO PF AND E SI ARE ALLOWABLE DEDUCTIONS, EVEN THOUGH MADE BEYOND STIPU LATED PERIOD, AS CONTEMPLATED UNDER MANDATORY PROVISIONS OF SECTION 36(1)(VA), READ WITH SECTION 2( 24 )(X), PROVIDED SUCH CONTRIBUTIONS ARE PAID BY ASSESSEE ON OR BEFORE D UE DATE FOR FURNISHING RETURN OF INCOME AS PER SECTION 139( 1). 19.4 THIS RATIO HAS BEEN UPHELD BY HONBLE SUPREME COURT IN CIT VS ALOM EXTRUSION LTD REPORTED IN ( 2009) 298 ITR 141. WE THEREFORE REMAND THIS ISSUE TO LD.AO TO VERIFY W HETHER, EMPLOYEE CONTRIBUTIONS WERE MADE BY ASSESSEE BEFORE DUE DATE OF FURNISHING OF RETURN, AS PER SECTION 139 (1 ) OF THE ACT. IN THE EVENT ASSESSEE SATISFIES THIS CONDITION, NO ADDITION COULD BE MADE IN THE HANDS OF ASSESSEE. ACCORDINGLY THIS GROUND RAISED BY ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 20. GROUND NO. 7 RAISED BY ASSESSEE IS IN RESPECT OF NOT ALLOWING SET OFF AND BROUGHT FORWARD LOSSES AND UNA BSORBED DEPRECIATION. 21. LD.A.R. SUBMITTED THAT, RECTIFICATION APPLICATI ON FILED BY ASSESSEE IS PENDING BEFORE LD. AO AND THEREFORE, WE DO NOT WISH TO EXPRESS OUR VIEW. PAGE 17 OF 18 IT(TP)A NO.583/BANG/2017 22. GROUND NO. 8 IS CONSEQUENTIAL IN NATURE AND THEREFORE DO NOT REQUIRE ANY ADJUDICATION. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOW ED AS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH SEPT, 2020. SD/- SD/- (A.K GARODIA) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 25 TH SEPT., 2020. /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL. BANGALORE. PAGE 18 OF 18 IT(TP)A NO.583/BANG/2017 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -09-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -09-2020 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -09-2020 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -09-2020 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -09-2020 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -09-2020 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -09-2020 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS