Freescale Semiconductor India Pvt. Ltd., New Delhi V. DCIT, New Delhi

ITA 5865/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81956 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 11-09-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 22-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PEEYUSH JAIN; YOGESH VERMA
• Assessee Lawyers: S D KAPILA ADV SH R R MAURYA
• Keywords: Transfer pricing; International transaction; Wholly owned subsidiary
• Section: 133(6); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : I NEW DELHI BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI C.M.GARG , JM IT (TP) A NO. 5865 /DEL/201 2 AY : 2007 - 08 FREESCALE SEMICONDUCTOR INDIA P.LTD. VS. DCIT, CIRCLE 8(1) 13, ABUL FAZAL ROAD NEW DELHI BENGALI MARKET NEW DELHI 110 001 PAN: AAACZ 1978 P (APPELLANT) APPELLANT BY : SHRI S.D.KAPILA, ADV. SH. R.R.MAURYA, ADV. AND SH. SANJAY KUMAR, ADV. RESPONDENT BY : SH. PEEYUSH JAIN, CIT , D.R. AND SHRI YOGESH VERMA, CIT, DR O R D E R PER J.SUDHAKAR REDDY, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LD.CIT(APPEALS) - XX, NEW DELHI DATED 2 5.9.2012 . 2. FACTS IN BRIEF : - FREESCALE SEMICONDUCTOR INDIA P.LTD. IS A P RIVATE LIMITED COMPANY REGISTERED IN INDIA AND IS A WHOLLY OWNED SUBSIDIARY OF FREESCALE SEMICONDUCTOR INC. USA. TH E COMPANY WA S I N C ORPORA T ED O N MA R CH 24, 2005 AND PR O VIDES SERVICES MAI NL Y T O IT S AS S OCIATE E N TE RPRISES. I T HAS A STPI UNI T A T NO I D A A ND A N O T H E R S TPI UNIT LOCATED AT BA NGALOR E O N WHI C H IT IS C L A I MING DEDUC TI ON U N DER S E C TI O N IT IS A LS O H A S A N OFFICE IN B A NGAL O R E WHICH P R OV I DES MARK ET OF ITS AS S OCI A TED E NTERPRISES . IN THE R E T U RN OF I N C OME, A PP ELL AN T C LAIMED DEDU C TION UN D ER SE C TION L OA O F T H E AMOU N T I NG TO RS . 1 9,32, L O . 124/ - . T H E S E G M E N TA L ITA NO. 5865/DEL/2012 AY: 2007 - 08 M/S FREESCALE SEMICONDUCTOR INDIA PVT.LTD . 2 WORKINGS AS PER THE T P R EPO R T O F THE S O FTWARE DIV I S I O N AN D MAR K ET S UP P O R T : SE R VICE S D I V ISI ON A RC GIVEN I N TABLE 1 BELOW : TABLE 1 : DESCRIPTION SOFTWARE DEVELOPMENT SERVICES MARKET SUPPORT SERVICES TOTAL OPERATING REVENUE (EQUAL TO INTERNATIONAL TRANSACTIONS) 1,897,845,346 36,036,693 1,933,882,039 OPERATING COSTS 1,715,829,585 33,549,556 1,749,379,141 OPERATING PROFIT (PBIT) 182,015,761 2,487,137 184,502,898 OPERATING PROFIT TO COST RATIO 11.00% 7.00% 10.55% NUMBER OF COMPARABLE AS PER TP STUDY 18 7 OP/TC MARGIN (BASED ON WEIGHTED AVERAGE FOR THREE YEARS) 13.00% 11.00% THE APPROACH ADOPTED BY THE TAX PAYER: IN TH E TP S T UDY, T HE APP E LLANT CREA T ED TWO SEGMENTS AS MENTIONED IN TABLE 1 A BOV E . O PERATING PROFIT / TOTAL CO S T (OP/TC) WAS S ELECTED AS THE PROFIT LEVEL IND ICATOR ( PLI ) U NDER TRANSACTIONAL NET MARGIN METHOD ( TNMM) AS THE MOST A PPROPRI ATE M E THOD. THE APPELLANT HAD U S ED 18 COMPARABLES IN THE SOFTWA RE SE GM E N T WHICH HAD A MARGIN OF 13% (BASED ON THREE YEAR'S W E IGHTED A VE R AGE ) A ND 7 COMPARABLES IN MARKET S UPPORT SERVICES SEGMENT WITH A MA R G IN O F 1 1% (BA S ED ON THREE YEARS WEIGHTED AVERAGE) [ SEE TABLE 1 ABOVE]. T H E R EF OR E , T H E MARGIN EARNED BY THE APPELLANT WAS HELD TO BE AT ARM'S LENGTH BY T H E TP STU DY . THE A PP ROA C H A D O PTED BY THE TPO : 5.3. THE TPO REJECTED THE COMPARABLE ANALYSIS CONDUCTED BY THE APPELLANT. TPO ALSO GATHERED INFORMATION FROM VARIOUS INDUSTRY STUDIES TO UNDERSTAND THE BUSINESS PROFILE OF THE INDUSTRY. TPO ARRIVED AT HIS OWN INDEPENDENT CONCLUSIONS BASED ON SUCH STUDI ES. HE REJECTED SOME OF THE COMPARABLES OF THE APPELLANT. THE TPO CONDUCTED A FRESH SEARCH FOR THE COMPARABLES. WHILE DOING SO, TPO US E D DIFFERENT QUANTITATIVE FILTERS TO FIND A C LOSER SET OF CO MPARABLE C OMP A NIES . I N THE PROC E S S , TPO U S ED POWER U/S 133(6) TO GATHE R ADD ITI O NAL INFORMATION F R O M SOME O F THE ITA NO. 5865/DEL/2012 AY: 2007 - 08 M/S FREESCALE SEMICONDUCTOR INDIA PVT.LTD . 3 C O M PAR A BL E CO M PA N IES. TP O I SS UED A DE T A ILED SHOW CAU S E N O TICE TO T H E A PP E LLANT . T H E A PP EL L A N T R E P L I ED TO SU C H SHOW C A U S E NOTICES . T H E 1 PO CONS ID E R ED TH E R E PL Y FIL E D BY THE A PP E LL A N T B E FOR E P A SSING THE ORDER . T P O U S E D SINGLE YE AR D A TA A ND A LLOW E D W OR KI N G CA PI T AL ADJ USTMENTS . THE T PO M E R GE D BO T H T H E S E GMENTS OF T H E APP E L LA N T BY STA TING T H A T THE MARKET SUPP O R T SERVI CE SE G ME N T IS NOT HAVING S I GNIFICANT TRANSACTION AN D THEY ARE INTE RR ELA T ED . TPO FOLLO W ED TH E O R D E R OF TH E E ARLI E R Y EARS OF HIS P REDECE S SO RS S O FAR A S C L UBBING OF TH E S E T WO SEGM E NTS ARE C ON C ERNED . THE M A RG I NS A S DETE RMI NE D B Y THE TPO ARE G I VEN I N THE TABLE 2 B E L OW: DESCRIPTION SOFTWARE DEVELOPMENT SERVICES AND MARKET SUPPORT SERVICES SEGMENT NUMBER OF COMPARABLES AS PER TPO 27 OP/TC MARGIN (BASED ON SINGLE YEAR DATA AND AFTER WORKING CAPITAL ADJUSTMENT) 23.28% (PAGE NO.161 OF THE TPO ORDER) 3. THE LD.COUNSEL FOR THE ASSESSEE SRI S. D .KAPILA SUBMITTED THAT THE FACTS OF THE CASE OF THE ASSESSEE ARE SIMILAR TO THE FACTS OF THE CASE OF M/S MOTOROLA SOLUTIONS INDIA PVT.LTD.(MOTOROLA FOR SHORT), WHICH CASE WAS ADJUDICATED BY THE DELHI I BENCH OF THE TRIBUNAL IN ITA NO.5637/DEL/2011 VIDE ORDER DT. 14.8.2014. H E POINTED OUT THAT THE AY INVOLVED IN THE CASE OF THE ASSESSEE AS WELL AS IN THE CASE OF MOTOROLA IS AY 2007 - 08 AND FAR OF THE TE S TED PARTY IS THE SAME IN BOTH CASES. HE FURTHER SUBMITTED THAT THE T.P.O. SELECTED THE SAME 26 COMPARABLES IN BOTH THE CASES FOR THE PURPOSE OF BENCH MARKING. HENCE HIS SUBMISSION IS THAT THE COMPARABLES PICKED UP BY THE TPO IN BOTH THE CASES BEING THE SAME , THE DECISION OF THE TRIBUNAL IN THE CASE OF MOTOROLA ON EACH OF THESE COMPARABLES HAS TO BE FOLLOWED IN THE CASE OF THE ASSESSEE. HE SUBMITTED THAT HE IS NOT PRESSING GROUND NO.4 AND THE SECOND PART OF GROUND NO.2, WHICH PERTAINS TO ENHANCEMENT MADE BY THE ITA NO. 5865/DEL/2012 AY: 2007 - 08 M/S FREESCALE SEMICONDUCTOR INDIA PVT.LTD . 4 LD.CIT(APPEALS) FOR THE REASON THAT THE LD.CIT(APPEALS) HAS RECTIFIED HIS ORDER U/S 154 OF THE ACT. 4 . THE LD.COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT, G ROUND NO.1 IS GENERAL IN NATURE AND GROUND NO.3 ALSO IS NOT PRESSED. GROUND NO.11 WAS ALSO NOT PRESSED BY THE LD.COUNSEL FOR THE ASSESSEE WITHOUT PREJUDICE TO HIS RIGHTS TO RAISE THIS ISSUE DURING PROCEEDINGS IN FUTURE YEARS. THE REASON FOR NOT PRESSING THIS GROUND FOR THE CURRENT YEAR WAS SMALLNESS OF THE AMOUNT. THUS THIS GROUND IS DISMISSED WITH A RIDER THAT THE DECISION SHALL NOT BE A PRECEDENT. ALL OTHER GROUNDS RELATE TO INCLUSION OF CERTAIN COMPARABLES BY THE TPO , AS UPHELD BY THE LD.CIT(APPEALS). 5. THE LD.D.R. MR.PEEYUSH JAIN, ON THE OTHER HAND, OPPOSED THE CONTENTIONS OF THE ASSESSEE. HE SUBMITTED THAT: (A) ON THE ISSUE OF EMPLOYEE COST FILTER, THE TPO HAD LAID DOWN THAT ALL COMPANIES WHICH HAVE EMPL OYEE COST WHICH IS GREATER THAN 25% OF THEIR TOTAL REVENUES WOULD BE TAKEN AS COMPARABLES AND THIS VIEW OF THE TPO WAS UPHELD BY THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF NAVISITE INDIA PVT.LTD. , I N ITA NO.2329/DEL/2012 2013 - TII - 153 - ITAT - DEL - TP. HE P OINTED OUT THAT THE AUTHOR OF THE ORDER IN THE CASE OF NAVISITE INDIA PVT.LTD. AND IN THE CASE OF MOTOROLA (SUPRA) WAS THE SAME. (B) HE RELIED ON THE DECISION OF THE DELHI A BENCH OF THE TRIBUNAL IN THE CASE OF A V AYA INDIA (P) LTD. IN ITA NO. 5150/DEL/2010 ( 2011 - TII - 139 - ITAT - DEL - TP) SPECIFICALLY AT PARA 19 AND SUBMITTED THAT IT WAS THE TPO IN THAT CASE WHO FIXED THE RANGE OF 30 % TO 60% FOR PICKING UP COMPARABLES WITH FILTER OF WAGES TO SALES RATIO AND IT WAS ONLY THIS DECISION OF THE TPO WHICH WAS UPHELD. HE FURTHER RELIED ON THE CASE OF VEDARIS TECHNOLOGY PVT.LTD. ITAT DELHI H BENCH OF THE TRIBUNAL IN ITA NO. 5865/DEL/2012 AY: 2007 - 08 M/S FREESCALE SEMICONDUCTOR INDIA PVT.LTD . 5 ITA 4372/DEL/2009 ORDER DT. 31.3.2010 SPECIFICALLY AT PARA 5.3. THE SUM AND SUBSTANCE OF HIS SUBMISSION IS THAT THE TRIBUNAL IN ITS ORDER IN THE CASE OF MOTOROLA HAD NOT CONSIDERED THE COORDINATE BENCH ORDER IN THE CASE OF NAVISITE (SUPRA) AND HAD WRONGLY RELIED ON THE CASE OF A VAYA INDIA (P) LTD. (SUPRA) AS IT WAS A CASE WHERE THE RANGE WAS PICKED UP BY THE TPO AND NOT BY THE BENCH OF THE ITAT. HE FURTH ER SUBMITS THAT IF A RANGE HAS TO BE APPLIED, THEN IF THE EMPLOYEE COST IS MORE THAN 90%, THEN THE RANGE OF + 15% WOULD BE AN ABSURD PROPOSITION. (C) ON THE DECISION OF THE TRIBUNAL IN THE CASE OF MOTOROLA THAT CERTAIN COMPARABLES HAVE TO BE EXCLUDED FOR THE REASON THAT THEY HAVE CREATED IN - HOUSE ASSETS RESULTING IN HIGHER PROFITABILITY, MR.JAIN SUBMITS THAT THE POSITION OF INTANGIBLES BY ITSELF CAN NOT LEAD TO A CONCLUSION THAT THE COMPARABLE SHOULD BE ELIMINATED. HE RELIED ON THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF DELOITTE CONSULTING INDIA PVT.LTD. IN ITA 1082, 1084/H/10 VS. DCIT. HE FURTHER SUBMITTED THAT COMPARABLES CAN NOT BE ELIMINATED ON THE GROUND OF HIGH TURNOVER AND FOR THIS PROPOSITION HE RELIED ON THE JUDGEMENT OF DELHI HI GH COURT IN THE CASE OF AGNITY INDIA TECHNOLOGIES (P) LTD. 262 CTR (DELHI) 291. (D) ON THE ISSUE OF ELIMINATION OF PERSISTENT SYSTEMS INDIA LTD. ON THE GROUND THAT THERE ARE EXTRA ORDINARY CIRCUMSTANCES (ACQUISITIONS), HE ARGUED THAT IF THE ACQUISITION OR MERGER IS OF A COMPANY WHICH IS IN THE SAME LINE OF BUSINESS, THEN THERE SHOULD NOT BE ANY DIFFERENCE AND THE ELIMINATION SHOULD NOT BE THERE. O N THE EXCLUSION ON THE GROUND THAT THERE IS NO CREDIBLE INFORMATION U/S 136, HE SUBMITTED THAT THE MATTER MAY BE RESTORED TO THE AO FOR FRESH ADJUDICATION. ON THE CRITERIA FOR EXCLUSION ADOPTED IN THE CASE OF MOTOROLA ON THE FILTER OF RELATED PARTY TRANSA CTION (HEREINAFTER REFERRED TO AS RPT) HE SUBMITTED THAT THE FILTER ADOPTED BY THE TPO HAS TO BE UPHELD. 6. JOINING THE ISSUE, THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT ON SEARCH, IT IS REVEALED THAT THERE IS NO SOFTWARE COMPANY WHICH SPENDS MORE ITA NO. 5865/DEL/2012 AY: 2007 - 08 M/S FREESCALE SEMICONDUCTOR INDIA PVT.LTD . 6 THA N 70% TOWARDS EMPLOYEES COST AND HENCE THE ARGUMENT OF THE LD.D.R. THAT 15% RANGE WOULD RESULT IN ABSURD RESULTS IF EMPLOYEE COST IS 90% DOES NOT HOLD WATER. HE ARGUED THAT THE RANGE DETERMINED BY THE BENCH IN THE CASE OF MOTOROLA IS MORE SCIENTIFIC APP ROACH IN PICKING UP COMPARABLES. HE CONTENDED THAT THE TRIBUNAL HAS DEALT AT LENGTH ON THE ISSUE OF INTANGIBLES AND OTHER ASSETS USED BY EACH OF THE COMPARABLE AND AFTER DETAILED REASONING, CAME TO A CONCLUSION THAT THESE COMPARABLES SHOULD BE ELIMINATED . ON A QUERY FROM THE BENCH HE AGREED THAT IN THE CASE WHERE EMPLOYEE COST FILTER HAS TO BE APPLIED, THE ISSUE IF NECESSARY, MAY BE RESTORED TO THE FILE OF THE TPO FOR VERIFICATION. 7. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE, ON PERUSAL OF MATERIAL ON RECORD, ORDER OF LOWER AUTHORITIES AND CASE LAWS CITED, WE HOLD AS FOLLOWS. 8. WE ARE BOUND BY THE ORDER OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MOTOROLA (SUPRA) FOR THE REASON THAT THE FACTS AS WELL AS THE ORDER OF THE T.P.O. ARE IDENTICAL. 8. 1. WE NOW CONSIDER EACH COMPARABLE BY REFERRING TO THE ORDER OF THE ITAT IN THE CASE OF MOTOROLA (SUPRA). (I) ACCEL TRANSMA T IC LTD.: - THE TRIBUNAL IN THE CASE OF MOTOROLA SALES (SUPRA) AT PARA 89 RE STORED THE ISSUE TO THE FILE OF THE TPO TO CONSIDER THE INCLUSION/EXCLUSION OF THIS COMPARABLE DEPENDING UPON THE FINDING OF RPT. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE RESTORE THE MATTER TO THE FILE OF AO FOR FOLLOWING THE DECISION OF THE TRIBUNAL I N THE CASE OF MOTOROLA (SUPRA). ITA NO. 5865/DEL/2012 AY: 2007 - 08 M/S FREESCALE SEMICONDUCTOR INDIA PVT.LTD . 7 (II) A V ANI CI MCON TECHNOLOGIES LTD: - THE TRIBUNAL DIRECTED EXCLUSION OF THIS COMPARABLE FOR THE REASON THAT IT OWN CERTAIN SOFTWARES DEVELOPED BY IT AND THE REVENUES EARNED ARE NOT MERELY ON ACCOUNT OF DEVELOPMENT OF NEW SOFTWAR E FROM SCRATCH BUT BECAUSE OF UTILISATION OF OWN SOFTWARE ALSO. IT HELD THAT THE ASSET BASE OF THE COMPANY COULD NOT BE COMPARED WITH THAT OF THE TESTED PARTY. CONSISTENT WITH THE VIEW TAKEN BY THE ITAT IN THE CASE OF MOTOROLA (SUPRA), WE DIRECT THE TP O TO EXCLUDE THIS COMPANY FROM THE LIST OF COMPARABLES. (III) CELESTIAL LABS: - THE TRIBUNAL OBSERVED THAT CELESTIAL LABS IS MAINLY INTO SOFTWARE DEVELOPMENT SERVICES , IN AS MUCH AS , R&D FACILITIES HAVE BEEN USED BY IT IN RELATION TO DEVELOPMENT OF A SOFTWARE F OR DISCOVERY OF NEW DRUGS. IT WAS ENGAGED IN BIOFORMA AND BIOTECH MANUFACTURING OF CUSTOMISED I.T.SOLUTIONS, MANUFACTURING OF TRUCKS, AND CONTRACT RESEARCH ACTIVITIES. AT PARA 93.2 OF THE ITAT ORDER, THE REASONS ARE GIVEN AS TO WHY THIS COMPANY SHOULD BE EXCLUDED FROM THE COMPARABLES. CONSISTENT WITH THE VIEW TAKEN THEREIN WE DIRECT THE AO TO EXCLUDE THIS COMPARABLE (IV) KALS INFORMATION SYSTEMS: - AT PARA 94.1 THE TRIBUNAL DIRECTED THE AO TO EXCLUDE THIS COMPARABLE ON THE GROUND THAT THERE IS A DIFFERENCE IN THE ASSET BASE OF BOTH THE COMPANIES. WE FOLLOW THE SAME AND DIRECT THE AO TO EXCLUDE THIS COMPARABLE. (V) E - ZEST SOLUTIONS: - WE RESTORE THIS ISSUE TO THE FILE OF THE TPO TO EXAMINE THE REPLY OF THE ASSESSEE AND ADJUDICATE THE MATT ER AFRESH AS WAS DONE IN THE CASE OF MOTOROLA (SUPRA). (VI) FLEXTRONIC SOFTWARE SYSTEMS LTD.: - AT PARA 97.2 THE TRIBUNAL IN THE CASE OF MOTOROLA (SUPRA) HELD THAT THE COMPANY CANNOT INCLUDE A COMPARABLE AS THERE IS A CLEAR CONTRADICTION IN THE CONTENTS OF THE ANNUAL REPORT AND THE INFORMATION OBTAINED U/S 136, HENCE THIS COMPARABLE HAS TO BE EXCLUDED FOR THE SAME REASON. (VII) INFOSYS TECHNOLOGIES LTD.: - THE REASONS GIVEN IN THIS COMPARABLE HAS TO BE EXCLUDED BY FOLLOWING THE DECISION OF THE JURISDICTIONAL ITA NO. 5865/DEL/2012 AY: 2007 - 08 M/S FREESCALE SEMICONDUCTOR INDIA PVT.LTD . 8 HIGH COU RT IN THE CASE OF CIT VS. AGNITY INDIA TECHNOLOGIES PVT.LTD.(2013) 262 CTR (DEL) 291. (VIII) ISHIR INFOTEC H LTD.: - CONSISTENT WITH THE VIEW TAKEN IN MOTOROLA (SUPRA) WE RESTORE THE MATTER TO THE FILE OF THE AO TO PROVIDE INFORMATION OBTAINED U/S 133(6) TO THE ASSESSE AND THEREAFTER DECIDE THE ISSUE DE NOVO. (IX) HELIOS & MATHESON INFORMATION TECHNOLOGIES LTD.: - FOR THE REASONS GIVEN WHILE RESTORING THE MATTER IN ASIAN INFOTEC LTD., WE RESTORE THIS COMPARABLE ALSO TO THE FILE OF THE TPO. (X) LUCID SOFTWARE LTD.: - AS THE COMPARABLE HAS BEEN EXCLUDED BY THE TPO HIMSELF FOR THE AY 2008 - 09 THE TPO IS DIRECTED TO EXCLUDE THE COMPARABLE AS IN THE CASE OF MOTOROLA (SUPRA). (XI) S ASKEN COMMUNICATION TECHNOLOGIES LTD.: - THE COMPANY HAS TO BE EXCLUDED AS IT OWNS IPRS AND HAD BRAND ED PRODUCTS BY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF MOTOROLA (SUPRA) AT PARA 111. (XII) TATA ELXIS LTD. : - THE TRIBUNAL DIRECTED THE EXCLUSION OF THIS COMPARABLE FOR THE REASON THAT THE SOFTWARE DEVELOPED BY THIS COMPANY WERE USED AS TOOLS IN D EVELOPMENT OF NEW SOFTWARES AT PARA 113.1 OF THE ORDER. CONSISTENT WITH THE VIEW TAKEN THEREIN, WE DIRECT THE AO TO EXCLUDE THIS COMPARABLE. (XIII) W IPRO LTD.: - FOR THE REASONS GIVEN WHILE DIRECTING EXCLUSION OF INFOSYS LTD. , AS A COMPARABLE WE DIRECT TH E AO TO EXCLUDE THIS COMPARABLE ALSO. (XIV) PERSISTENT SYSTEMS LTD.: - THIS SHOULD BE EXCLUDED ON THE SAME GROUNDS ON WHICH THE LD.CIT(A) HAS EXCLUDED THE CASE OF MEGASOFT. ITA NO. 5865/DEL/2012 AY: 2007 - 08 M/S FREESCALE SEMICONDUCTOR INDIA PVT.LTD . 9 9. THE SUM AND SUBSTANCE OF OUR ORDER IS THAT THE TPO AS WELL AS THE AO ARE DIRECTED TO FOLLOW THE JUDGEMENT OF I BENCH OF THE TRIBUNAL IN THE CASE OF MOTOROLA (SUPRA) AND PASS CONSEQUENTIAL ORDER. 10 . IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST OCTOBER,2014. SD/ - SD/ - ( C.M. GARG ) (J.SUDHAKAR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: THE 31 ST OCTOBER , ,2014 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR