H&S Software Development and Knowledge Management Centre Pvt. Ltd., Gurgaon V. ACIT, New Delhi

ITA 6455/DEL/2012

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 6915 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I2
• Next Hearing Date: 08-12-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 28-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAMANJANEYULU SENIOR
• Assessee Lawyers: VEENU AGARWAL ARS
• Keywords: Related party transaction; Transfer pricing; International transaction; Initiation of penalty proceedings; Wholly owned subsidiary
• Section: 133(6); 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH I-2 : NEW DELHI) BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.6455/DEL./2012 (ASSESSMENT YEAR : 2007-08) H&S SOFTWARE DEVELOPMENT AND VS. ACIT, KNOWLEDGE MANAGEMENT CENTRE PVT. LTD. CIRCLE 12 ( 1), MVLI PARK, UNIT NO.501 & 502, 5 TH FLOOR, NEW DELHI. NEAR RED CROSS SOCIETY, SECTOR 15, PART-II, GURGAON 122 001 (HARYANA). (PAN : AAATH4075Q) (APPELLANT) (RESPONDENT) ASSESSEE BY : S/SHRI MANONEET DALAL, GAURAV BHUTAN I, ARVINDER SINGH, YISHU GOEL & VEENU AGARWAL, ARS REVENUE BY : SHRI RAMANJANEYULU, SENIOR DR DATE OF HEARING : 08.12.2016 DATE OF ORDER : 18.01.2017 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : THE APPELLANT, H&S SOFTWARE DEVELOPMENT AND KNOWLE DGE MANAGEMENT CENTRE PRIVATE LIMITED (HEREINAFTER REFE RRED TO AS THE ASSESSEE COMPANY) BY FILING THE PRESENT APPEAL SOU GHT TO SET ASIDE THE IMPUGNED ORDER DATED 23.02.2011, PASSED BY THE AO UNDER SECTION 143(3)/144C OF THE INCOME-TAX ACT, 1961 (F OR SHORT THE ITA NO6455/DEL./2012 2 ACT) QUA THE ASSESSMENT YEAR 2007-08 IN CONSONANCE WITH THE ORDERS PASSED BY THE LD. DRP/TPO ON THE GROUNDS INT ER ALIA THAT :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE ORDER PASSED BY THE LD. CIT(A) IS BAD I N LAW AND VOID AB-INITIO. 2. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE JURISDICTIONAL ERROR OF THE LD. ASSESSING OFFICER ( 'AO') WHEREBY HE DID NOT RECORD ANY REASONS IN THE ASSESS MENT ORDER BASED ON WHICH HE REACHED THE CONCLUSION THAT IT WAS 'EXPEDIENT AND NECESSARY' TO REFER THE MATTER TO TH E LD. TRANSFER PRICING OFFICER ('TPO') FOR COMPUTATION OF THE ARM'S LENGTH PRICE, AS IS REQUIRED UNDER SECTION 92 CA( 1) OF THE ACT. 3. THAT ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DETERMINING THE ARM'S LENGTH PR ICE OF THE APPELLANT'S INTERNATIONAL TRANSACTION AT RS.15, 51,19,800 (AS AGAINST RS.13,85,96,691 DETERMINED BY THE APPEL LANT) IN THE FOLLOWING MANNER:- A. THE LD. CIT (A) ERRED IN UPHOLDING REJECTION OF THE APPELLANT'S TP DOCUMENTATION, COMPARABLE COMPANIES AND ANALYSIS THEREOF. B. THE LD. CIT (A) ERRED IN PERMITTING THE USE OF U NAUDITED DATA REQUISITIONED BY TAKING RECOURSE TO THE PROVIS IONS OF SECTION 133(6) OF THE ACT. C. THE LD. CIT (A) ERRED IN CONFIRMING COMPANIES, S ELECTED BY LD. TPO/ AO, WHICH WERE NOT FUNCTIONALLY COMPARA BLE TO THE APPELLANT AND IN REJECTING COMPARABLE COMPAN IES SELECTED BY THE APPELLANT. D. THE LD. CIT (A) ERRED IN CONFIRMING THE INCORREC T COMPUTATION MARGINS OF COMPARABLE COMPANIES SELECTE D BY THE LD. TPO. E. THE LD. CIT (A) ERRED IN CONFIRMING THE SELECTIO N OF CURRENT YEAR (I.E. FINANCIAL YEAR 2006-07) DATA FOR COMPARABILITY. F. THAT THE LD. CIT (A) ERRED IN NOT APPRECIATING T HE FACTUAL ERRORS IDENTIFIED BY THE APPELLANT IN THE ORDER PAS SED BY THE LD. TPO. ITA NO6455/DEL./2012 3 G. THE LD. CIT (A) ERRED IN NOT APPRECIATING THE FA CT THAT THERE IS NO MOTIVE ON THE PART OF THE ASSESSEE TO SHIFT T HE PROFITS TO ANY OTHER JURISDICTION SINCE IT CLAIMS TAX HOLID AY BENEFITS AS PER THE SOFTWARE TECHNOLOGY PARK OF INDIA. 4. THE LD. AO AND CIT (A) HAS ERRED IN EXCLUDING TH E 'OTHER INCOME' FROM PROFIT ELIGIBLE FOR DEDUCTIONS FOR THE PURPOSE OF COMPUTING DEDUCTION UNDER SECTION 10A OF THE ACT , WHEN THE SAME HAS ALREADY BEING EXCLUDED BY THE APPELLANT. 5. THE LD. CIT (A) ERRED IN NOT EXAMINING THE VALID ITY OF INITIATION OF PENALTY PROCEEDINGS U/S 271(1) (C) OF THE ACT. 2. BRIEFLY STATED THE FACTS OF THIS CASE ARE : H&S SOFTWARE DEVELOPMENT AND KNOWLEDGE MANAGEMENT CENTRE PVT. LT D. (H&S KMC LTD.) IS A WHOLLY OWNED SUBSIDIARY OF HENDRICK & STRUGGLES INC. USA (HSI) WHICH IS IN TURN A SUBSIDIARY OF HEN DRICK & STRUGGLES INTERNATIONAL INC., USA (HSII) AND IS INT O PROVIDING INFORMATION TECHNOLOGY (IT) ENABLED BACK OFFICE SUP PORT SERVICES RELATED TO CREATION AND MAINTENANCE OF DATABASE OF PROSPECTIVE EMPLOYERS AND CANDIDATES WHO HAVE SUBMITTED THEIR R ESUMES TO HSII. THIS DATABASE IS SEARCH PALACE AND HSIIS PR OPRIETARY SOFTWARE TOOL USED TO PERFORM ALL OF HSIIS SERVICE S. HSI IS THE OWNER OF INTANGIBLES ASSOCIATED WITH SEARCH PALACE AND IS ALSO RESPONSIBLE FOR MAINTAINING AND DEVELOPING THIS SOF TWARE TOOL AND OTHER RELATED TOOLS. 3. DURING THE YEAR UNDER ASSESSMENT, ASSESSEE COMPA NY HAS DECLARED AN INCOME OF RS.2,07,56,617/- UNDER THE HE AD PROFIT AND ITA NO6455/DEL./2012 4 GAINS OF BUSINESS OR PROFESSION AND INCOME OF RS.3, 534/- I.E. INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER S OURCES. THE ASSESSEE COMPANY HAS MADE CLAIM FOR DEDUCTION U/S 1 0A OF THE ACT AMOUNTING TO RS.2,07,56,617/- BY FILING FORM NO.56F ALONG WITH THE RETURN OF INCOME. 4. HOWEVER, PURSUANT TO THE ORDER PASSED BY THE TR ANSFER PRICING OFFICER (TPO), AO MADE AN ADDITION ON ACCOU NT OF ARMS LENGTH PRICE (ALP) TO THE TUNE OF RS.2,08,34,850/- QUA INTERNATIONAL TRANSACTIONS WITH ASSOCIATED ENTERPRI SES (AES) DURING FINANCIAL YEAR 2006-07. 5. ASSESSEE COMPANY BY USING TRANSACTIONAL NET MARG IN METHOD (TNMM) AS THE MOST APPROPRIATE METHOD WITH O PERATING PROFIT / OPERATING COST (OP/OC) AS THE PROFIT LEVEL INDICATOR (PLI) BY SELECTING 11 COMPARABLES WITH THREE YEARS WEIGHT ED AVERAGE MARGIN AT 6.88% VIS--VIS ASSESSEES MARGIN AT 12.2 0% AND FOUND ITS INTERNATIONAL TRANSACTION AT ARMS LENGTH. 6. TPO ACCEPTED THE TNMM WITH OP/OC AS PLI AS APPLI ED BY THE ASSESSEE COMPANY, BUT REJECTED SEVEN COMPARABLE COMPANIES SELECTED BY THE ASSESSEE COMPANY AND IDENTIFIED 21 COMPANIES BY MAKING INDEPENDENT SEARCH ON THE BASIS OF FUNCTIONS , ASSETS AND RISKS OF THE ASSESSEE COMPANY AND FINALLY CHOSEN 25 COMPARABLE COMPANIES. TPO ALSO USED CURRENT YEAR DATA AS AGAI NST THREE YEARS ITA NO6455/DEL./2012 5 DATA USED BY THE ASSESSEE COMPANY. AS PER TPO STUD Y, ARITHMETIC MEAN OF PLI CAME TO 29.05% AND THEREBY MADE ADJUSTM ENT OF RS.2,08,34,850/- TO MAKE THE INTERNATIONAL TRANSACT IONS OF THE ASSESSEE COMPANY AT ARMS LENGTH. 7. ASSESSEE COMPANY CARRIED THE MATTER BEFORE THE L D. CIT (A) WHO HAS UPHELD THE ORDER PASSED BY TPO EXCEPT EXCLU DING MOLD- TEK TECHNOLOGIES LIMITED AS A COMPARABLE, OUT OF WH ICH MARGIN OF THE MARGIN COMPANIES CAME DOWN TO 25.40% AND THEREB Y DETERMINED THE ALP OF ASSESSEE COMPANYS INTERNATIO NAL TRANSACTION AT RS.15,51,19,800. FEELING AGGRIEVED, ASSESSEE COMPANY HAS COME UP BEFORE THE TRIBUNAL BY WAY OF F ILING THE PRESENT APPEAL. 8. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. GROUND NO.1 IS GENERAL IN NATURE HENCE NEEDS NO SPECIFIC FINDING. 10. GROUND NO.2 IS DETERMINED AGAINST THE ASSESSEE COMPANY HAVING NOT BEEN PRESSED DURING THE COURSE OF ARGUME NTS. ITA NO6455/DEL./2012 6 11. GROUNDS NO.3B, 3D & 3E ARE NOT PRESSED BY THE ASSESSEE COMPANY DURING THE COURSE OF ARGUMENTS, HENCE DETER MINED AGAINST THE ASSESSEE COMPANY. GROUNDS NO.3A, 3C & 3F 12. UNDISPUTEDLY, THE TPO HAS ACCEPTED THE TRANSACT IONAL NET MARGIN METHOD (TNMM) AS MOST APPROPRIATE METHOD WIT H OP/OC AS PLI USED BY THE ASSESSEE COMPANY FOR BENCHMARKIN G ITS INTERNATIONAL TRANSACTIONS. HOWEVER, TPO REJECTED SEVEN COMPARABLES OUT OF 11 SELECTED BY THE ASSESSEE COMP ANY AND INTRODUCED 21 COMPARABLES BY USING CURRENT YEAR DAT A TO COMPUTE THE MARGIN OF THE COMPARABLES. WORKING CAPITAL ADJ USTMENT WAS ALSO MADE TO THE COMPARABLES AND COMPUTED THE ADJUS TED ARITHMETIC MEAN OF PLI OF THE COMPARABLES AT 29.05%. THE TPO H AS MADE ALP ADJUSTMENT WITH REGARD TO ITES SERVICES ONLY BU T ACCEPTED ALL OTHER INTERNATIONAL TRANSACTIONS OF THE ASSESSEE CO MPANY. 13. ASSESSEE CONFINES ITS ARGUMENTS FOR EXCLUSION O F 10 COMPANIES OUT OF ADDITIONAL 21 COMPANIES CHOSEN BY THE TPO FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS WHICH A RE AS UNDER :- (I) ACCENTIA TECHNOLOGIES LTD. (SEGMENTAL) (II) BODHTREE CONSULTING LTD. (SEGMENTAL) (III) ECLERX SERVICES LTD. (IV) HCL COMNET SYSTEMS & SERVICES LTD. (SEGMENTAL) (V) INFORMED TECHNOLOGIES INDIA LTD. (VI) INFOSYS BPO LTD. ITA NO6455/DEL./2012 7 (VII) MAPLE E SOLUTIONS LTD. (VIII) TRITON CORP LTD. (IX) VISHAL INFORMATION TECHNOLOGIES LTD. (NOW KNOWN AS CORUL HUB LTD.) (X) WIPRO BPO LTD. (SEGMENTAL) 14. WE WOULD LIKE TO DISCUSS THE AFORESAID COMPANIE S TO WORK OUT THEIR SUITABILITY FOR COMPARABILITY WITH THE AS SESSEE COMPANY FOR BENCHMARKING THE INTERNATIONAL TRANSACTION ONE BY ONE AS UNDER:- ACCENTIA TECHNOLOGIES LTD. (ACCENTIA) 15. THIS COMPARABLE COMPANY HAS BEEN CHOSEN BY THE TPO ON THE BASIS OF DATA AVAILABLE IN THE CAPITAL LINE DAT ABASE AS WELL AS ON THE BASIS OF DATA MADE AVAILABLE BY THE COMPANY IN RESPONSE TO THE NOTICE ISSUED U/S 133 (6) OF THE ACT. BEFORE THE T PO, ASSESSEE RAISED OBJECTION FOR INCLUSION OF THIS COMPANY AS C OMPARABLE ON THE GROUND THAT THIS COMPANY HAS ONLY ONE SEGMENT O F HEALTH CARE RECEIVABLES MANAGEMENT AND CHOSEN THE SAME AS A COM PARABLE. 16. ASSESSEE COMPANY SOUGHT TO EXCLUDE THIS COMPANY AS COMPARABLES DUE TO EXTRA ORDINARY EVENTS IN THE FOR M OF AMALGAMATION DURING THE FY 2006-07 AND RELIED UPON DECISION RENDERED BY ITAT, DELHI BENCH IN COWI INDIA P. LTD. (ITA NO.5709/DEL/2011) (AVAILABLE AT PAGES 699 TO 715 OF THE PAPER BOOK-III) AND ITAT, HYDERABAD BENCH IN CASE OF CAPITAL IQ ITA NO6455/DEL./2012 8 INFORMATION SYSTEM INDIA PVT. LTD. (ITA NO.1961/HYD/2011) (AVAILABLE AT PAGES 812 TO 839 OF THE PAPER BOOK). 17. COORDINATE BENCH OF ITAT, DELHI AS WELL AS HYDE RABAD IN THE CASES OF COWI INDIA P. LTD. AND CAPITAL IQ INFORMATION SYSTEM INDIA PVT. LTD. (SUPRA) RESPECTIVELY ORDERED TO EXCLUDE THIS COMPANY AS A VALID COMPARABLE DUE TO EXTRA ORD INARY CIRCUMSTANCES, SUCH AS, MERGER AND DEMERGER WHICH H AS CERTAINLY EFFECTED THE FINANCIAL RESULTS AS THE AMALGAMATION TOOK PLACE IN FY 2006-07 RELEVANT TO AY 2007-08. 18. MORE SO, WE ARE INCLINED TO ORDER THE EXCLUSION OF THIS COMPANY FOR THE REASON THAT THE ANNUAL REPORT OF TH IS COMPANY IS NOT AVAILABLE FOR FY 2006-07 AND IN THESE CIRCUMSTA NCES, IT IS NOT FEASIBLE TO RELY UPON THE MATERIAL MADE AVAILABLE T O THE TPO IN RESPONSE TO THE NOTICE U/S 133 (6) OF THE ACT. FUR THERMORE, THERE IS A WIDE GAP BETWEEN EMPLOYEE COST OF THE ASSESSEE VI S--VIS THE COMPARABLE COMPANY I.E. 13.98% OF SALES IN CASE OF ACCENTIA AND 48.93% RESPECTIVELY. 19. APPLICATION OF FILTER OF EMPLOYEE COST TO SALES HAS BEEN CONSIDERED BY THE COORDINATE BENCH OF ITAT, BANGALO RE IN CASE OF M/S. E4E BUSINESS SOLUTIONS INDIA PVT. LTD. (ITA NO.819/BANG/2011) (AVAILABLE AT PAGES 716 TO 740 OF THE PAPER BOOK-III), SO THE EMPLOYEE COST FILTER IS A TIME TE STED FILTER FOR THE ITA NO6455/DEL./2012 9 PURPOSE OF SELECTING THE COMPARABLES. SO, WE ARE O F THE CONSIDERED VIEW THAT ACCENTIA IS NOT A VALID COMPARABLE FOR BE NCHMARKING INTERNATIONAL TRANSACTION IN ASSESSEES CASE. BODHTREE CONSULTING LTD. (BODHTREE) 20. THIS IS AGAIN TPOS OWN COMPARABLE, WHO HAS OBT AINED INFORMATION U/S 133(6) OF THE ACT SHOWING THE REVEN UE FROM E- PAPER SOLUTIONS TO THE TUNE OF RS.44.20 LAKHS AND D ATA CLEANSING TO THE TUNE OF RS.2.95 CRORES ON TOTAL OPERATING REVEN UE OF RS.10.53 CRORES I.E. 32% OF THE REVENUE. TPO ALSO USED THE REPLY FILED BY THE COMPANY THAT DATA CLEANSING ACTIVITY ARE IN THE FORM OF IT ENABLED SERVICES (ITES) WHICH HAS SUBMITTED SEGMENT AL DETAILS REGARDING ITES AND CHOSEN IT AS A COMPARABLE. CIT ( A) ALSO UPHELD THE CHOICE OF THE TPO AS A VALID COMPARABLE. 21. ASSESSEE SOUGHT EXCLUSION OF BODHTREE ON GROUND OF FUNCTIONAL DISSIMILARITY, PECULIAR ECONOMIC CIRCUMS TANCES AND THAT IT DOES NOT QUALIFY FILTER OF 75% OF THE SERVICE RE VENUE AND RELIED UPON MOTOROLA SOLUTIONS INDIA PRIVATE LIMITED (ITA NO.5637/DEL/2011) . THE LD. AR ALSO CONTENDED THAT INFORMATION RECEIVED U/S 133(6) OF THE ACT CANNOT BE USED FOR C OMPARABILITY RATHER RELIED UPON ANNUAL REPORT, AVAILABLE AT PAGE 685 OF THE PAPER BOOK. ITA NO6455/DEL./2012 10 22. IN THE INFORMATION SUPPLIED BY THE BODHTREE U/S 133 (6), IT UNDERTAKES THAT DATA CLEANSING ACTIVITIES ARE IN TH E FORM OF ITES WHEREAS IN THE ANNUAL REPORT, AVAILABLE AT PAGE 685 OF THE PAPER BOOK, IT IS CATEGORICALLY MENTIONED THAT BODHTREE H AVE ONLY ONE SEGMENT I.E. SOFTWARE DEVELOPMENT. BEING A SOFTWAR E SOLUTION COMPANY, IT IS ENGAGED IN PROVIDING OPEN END TO END WEB SOLUTION, SOFTWARE CONSULTANCY, DESIGN AND DEVELOPMENT OF SOL UTIONS, USING THE LATEST TECHNOLOGY. SO, THERE IS AN INHERENT CO NTRADICTION IN THE INFORMATION SUPPLIED BY BODHTREE U/S 133(6) VIS--V IS ITS ANNUAL REPORT. IN THESE CIRCUMSTANCES, INFORMATION AVAILA BLE IN THE ANNUAL REPORT HAS OVER-WEIGHTED THE INFORMATION RECEIVED U /S 133 (6), WHICH LEADS TO THE FUNCTIONAL DIS-SIMILARITY BETWEE N THE ASSESSEE COMPANY AND BODHTREE SUFFICIENT TO ORDER ITS EXCLUS ION. IDENTICAL ISSUE AS TO GIVING PRECEDENCE TO THE ANNUAL REPORT AS AGAINST INFORMATION OBTAINED U/S 133(6) OF THE ACT WAS DISC USSED BY THE ITAT, DELHI BENCH IN MOTOROLA SOLUTIONS INDIA PRIVATE LIMITED (SUPRA) AND WAS DECIDED IN FAVOUR OF THE ASSESSEE C OMPANY THAT ANNUAL REPORT IS TO BE RELIED UPON AS AGAINST INFOR MATION U/S 133 (6) OF THE ACT. SO, IN THESE CIRCUMSTANCES, WE HEREBY ORDER TO EXCLUDE BODHTREE FROM THE LIST OF COMPARABLES. ITA NO6455/DEL./2012 11 ECLERX SERVICES LTD. (ECLERX) 23. TPO USED THIS COMPANY AS A COMPARABLE ON THE BA SIS OF INFORMATION OBTAINED U/S 133 (6) AND ANNUAL REPORT FOR FY 2006-07. ASSESSEE RAISED OBJECTION FOR THE INCLUSION OF THIS COMPANY IN THE LIST OF FINAL COMPARABLES ON GROUND OF FUNCTIONAL D IS-SIMILARITY AND RELIED UPON ORDER PASSED BY ITAT, DELHI BENCH IN TH E CASE OF COPAL RESEARCH INDIA PVT. LTD. (ITA NO.1713/DEL.201 4) (AVAILABLE AT PAGES 741 TO 757 OF THE PAPER BOOK-II I). ASSESSEE ALSO RAISED OBJECTION THAT THIS COMPANY IS A KNOWLE DGE PROCESSING OUTSOURCING (KPO) COMPANY RATHER THAN ROUTINE SERVI CE PROVIDER. 24. COMPARABILITY OF ECLERX HAS BEEN EXAMINED BY TH E COORDINATE BENCH IN CASE OF COPAL RESEARCH INDIA PVT. LTD. (SUPRA) WHICH IS ALSO ENGAGED INTO ITES SERVICES SI MILAR TO THAT OF THE ASSESSEE. 25. WHEN WE EXAMINE THE FUNCTIONAL PROFILE OF THE A SSESSEE COMPANY WHICH IS INTO PROVIDING INFORMATION TECHNOL OGY (IT) ENABLES BACK OFFICE SUPPORT SERVICES RELATED TO CRE ATION AND MAINTENANCE OF DATA BASE OF PROSPECTIVE EMPLOYERS A ND CANDIDATES WHO SENT THEIR RESUMES TO HENDRICK & STRUGGLES INTE RNATIONAL INC. (HSII), THE ASSESSEE PROVIDES SERVICES TO HSII ONLY HAVING MINIMAL RISKS WHEREAS AS PER THE INFORMATION SUPPLIED BY EC LERX U/S 133 (6), IT IS INTO DATA ANALYTICAL SERVICES; OPERATION MANAGEMENT ITA NO6455/DEL./2012 12 SERVICES; ACCOUNTS RECONCILIATION SERVICES WHICH AR E AIMED AT REDUCING PROCESS ERRORS AND OPERATIONAL RISKS AND T HAT IT IS KPO RATHER THAN ROUTINE SERVICE PROVIDER AS IS EVIDENT FROM THE ANNUAL REPORT. 26. COMPARABILITY OF ECLERX HAS BEEN EXAMINED BY T HE COORDINATE BENCH WITH COPAL RESEARCH INDIA PVT. LTD. (SUPRA), A SIMILARLY SITUATED COMPANY, BY MAKING FOLLOWING OBS ERVATIONS :- 11. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND HAVE PERUSED THE RECORD OF THE CASE. WE FIND THAT IN THE CASE OF MAERSK GLOBAL CENTRES (INDIA) PVT. LTD., WH ICH COMPANY WAS, INTER ALIA, ENGAGED IN THE BUSINESS AS SHARED SERVICE CENTRE AND RENDERING TRANSACTION PROCESSING, DATA ENTRY, RECON CILIATION OF STATEMENTS, AUDIT OF SHIPPING DOCUMENTS AND OTHER S IMILAR SUPPORT SERVICES; AND ALSO RENDERING I.T. SERVICES SUCH AS PROCESS SUPPORT, PROCESS OPTIMIZATION AND TECHNICAL SUPPORT SERVICES , THE TRIBUNAL IN PARA 82 OF ITS ORDER OBSERVED AS UNDER: IN SO FAR AS M/S ECLERX SERVICES LIMITED IS CONCER NED, THE RELEVANT FORMATION IS AVAILABLE IN THE FORM OF ANNU AL REPORT FOR FINANCIAL YEAR 2007 -08 PLACED AT PAGE 166 TO 1 83 OF THE PAPER BOOK. A PERUSAL OF THE SAME SHOWS THAT THE SA ID COMPANY PROVIDES DATA ANALYTICS AND DATA PROCESS SO LUTIONS TO SOME OF THE LARGEST BRANDS IN THE WORLD AND IS R ECOGNIZED AS EXPERTS IN CHOSEN MARKETS-FINANCIAL SERVICES AND RETAIL AND MANUFACTURING. IT IS CLAIMED TO BE PROVIDING CO MPLETE BUSINESS SOLUTIONS BY COMBINING PEOPLE, PROCESS IMPROVEMENT AND AUTOMATION. IT IS CLAIMED TO HAVE EMPLOYED OVER 1500 DOMAIN SPECIALISTS WORKING FOR T HE CLIENTS. IT IS CLAIMED THAT ECLERX IS A DIFFERENT C OMPANY WITH INDUSTRY SPECIALIZED SERVICES FOR MEETING COMPLEX C LIENT NEEDS, DATA ANALYTICS KPO SERVICE PROVIDER SPECIALI ZING IN TWO BUSINESS VERTICALS - FINANCIAL SERVICES AND RET AIL AND MANUFACTURING. IT IS CLAIMED TO BE ENGAGED IN PROVI DING SOLUTIONS THAT DO NOT JUST REDUCE COST, BUT HELP TH E CLIENTS INCREASE SALES AND REDUCE RISK BY ENHANCING EFFICIE NCIES AND BY PROVIDING VALUABLE INSIGHTS THAT EMPOWER BETTER DECISIONS. M/S ECLERX SERVICES PVT. LTD. IS ALSO CL AIMED TO HAVE A SCALABLE DELIVERY MODEL AND SOLUTIONS OFFERE D THAT INCLUDE DATA ANALYTICS, OPERATIONS MANAGEMENT, AUDI TS AND RECONCILIATION, METRICS MANAGEMENT AND REPORTING SE RVICES. IT ALSO PROVIDES TAILORED PROCESS OUTSOURCING AND ITA NO6455/DEL./2012 13 MANAGEMENT SERVICES ALONG WITH A MULTITUDE OF DATA AGGREGATION, MINING AND MAINTENANCE SERVICES. IT IS CLAIMED THAT THE COMPANY HAS A TEAM DEDICATED TO DEVELOPING AUTOMATION TOOLS TO SUPPORT SERVICE DELIVERY. THESE SOFTWARE AUTOMATION TOOLS INCREASE PRODUCTIVITY, AL LOWING CUSTOMERS TO BENEFIT FROM FURTHER COST SAVING AND O UTPUT GAINS WITH BETTER CONTROL OVER QUALITY. KEEPING IN VIEW THE NATURE OF SERVICES RENDERED BY M/S ECLERX SERVICES PVT. LTD. AND ITS FUNCTIONAL PROFILE, WE ARE OF THE VIEW THAT THIS COMPANY IS ALSO MAINLY ENGAGED IN PROVIDING HIGH-EN D SERVICES INVOLVING SPECIALIZED KNOWLEDGE AND DOMAIN EXPERTISE IN THE FIELD AND THE SAME CANNOT BE COMPA RED WITH THE ASSESSEE COMPANY WHICH IS MAINLY ENGAGED IN PROVIDING LOW-END SERVICES TO THE GROUP CONCERNS. 11.1. WE FIND THAT THE ASSESSEE ALSO CANNOT BE SAID TO HAVE RELATABLE DEGREE OF COMPARABILITY BECAUSE PRIMARILY ASSESSEE WAS ENGAGED IN PROVIDING PRIMARY DATA FOR VARIOUS FIELD OF ACTIVITIES BUT NOT COMPLETE BUSINESS SOLUTIONS. THEREFORE, THIS CO MPANY COULD NOT BE TREATED AS COMPARABLE FOR THE PURPOSE OF DETERMI NING ALP OF THE TRANSACTIONS BETWEEN THE ASSESSEE COMPANY WITH ITS AES. WE, ACCORDINGLY, DIRECT THAT THIS COMPANY BE EXCLUDED F ROM THE LIST OF COMPARABLES FINALLY TAKEN BY THE AO/ TPO AS PER THE DIRECTION OF THE DRP. 27. SO, KEEPING IN VIEW THE FUNCTIONAL DIS-SIMILARI TY OF ASSESSEE COMPANY WITH ECLERX, WHICH IS A KNOWLEDGE PROCESS OUTSOURCING COMPANY ENGAGED IN PROVIDING CONSULTING SERVICES, PROCESS OUTSOURCING, PROCESS RE-ENGINEERING AND AUT OMATION SERVICES, WE DO NOT FIND ECLERX AS A VALID COMPARAB LE FOR BENCHMARKING THE INTERNATIONAL TRANSACTION QUA ITES SERVICES UNDERTAKEN BY THE ASSESSEE. HCL COMNET SYSTEMS & SERVICES LTD. (HCL) 28. TPO USED THIS COMPANY AS A COMPARABLE ON THE BA SIS OF INFORMATION U/S 133 (6) PERTAINING TO ITES SEGMENT AND CONSIDERED THE SAME AS A VALID COMPARABLE. HOWEVER, ASSESSEE OPPOSED THIS ITA NO6455/DEL./2012 14 COMPANY AS A COMPARABLE ON GROUND OF RELATED PARTY TRANSACTION (RPT) FILTER AS WELL AS HIGH TURNOVER OF THE COMPAN Y WHICH IS RS.260.19 CRORES WHICH 18.78 TIMES AS THAT OF THE A SSESSEE. LD. AR FOR THE ASSESSEE TO EXCLUDE THIS COMPANY AS A COMPA RABLE RELIED UPON MOTOROLA SOLUTIONS INDIA PRIVATE LIMITED (SUPRA). ASSESSEE RAISED THE ISSUE OF RPT FILTER BEFORE LD. CIT (A) AS PER SUBMISSION MADE, AVAILABLE AT PAGES 336 TO 420 OF T HE PAPER BOOK, THAT DURING THE YEAR UNDER ASSESSMENT HCL HAS 18.,7 2% OF RPT TO SALES AS AGAINST FILTER OF 15% TAKEN BY THE ASSESSE E IN ITS TP STUDY. CIT (A) AFFIRMED THE FINDINGS RETURNED BY THE TPO I N ADOPTING APPLICABILITY OF 25% RPT TRANSACTION FILTER. 29. IDENTICAL ISSUE HAS COME UP BEFORE THE COORDINA TE BENCH IN MOTOROLA SOLUTIONS INDIA PRIVATE LIMITED (SUPRA) WHEREIN IT IS HELD THAT BY APPLYING THE THRESHOLD LIMIT OF 15% OF RPT TRANSACTION SUFFICIENT COMPARABLES ARE AVAILABLE THEN THERE IS NO REASON TO FURTHER EXTEND THE LIMIT TO 25%. IN THE INSTANT CA SE, UNDISPUTEDLY, 25 COMPARABLES HAVE BEEN CHOSEN BY THE ASSESSEE HAV ING RPT FILTER OF 15%, OUT OF WHICH THE TPO CAN GET SUFFICI ENT NUMBER OF COMPARABLES FOR BENCHMARKING INTERNATIONAL TRANSACT IONS. SO FAR AS GROUND OF HIGH TURNOVER AS RAISED BY THE ASSESSEE F OR EXCLUSION OF THIS COMPARABLE IS CONCERNED, THE SAME HAS NOT BEEN PRESSED DURING THE COURSE OF ARGUMENT. ITA NO6455/DEL./2012 15 30. MOREOVER, INFORMATION SUPPLIED BY HCL U/S 133(6 ) IS INCONSISTENT WITH THE ANNUAL REPORT AS TO ADOPTING A DIFFERENT FINANCIAL YEAR BEGINNING FROM JULY 1 TO JUNE 30 WHI CH DOES NOT PASS THE TPOS FILTER OF COMPARABLE COMPANIES HAVIN G DIFFERENT FINANCIAL YEARS. SO, WE DIRECT TO EXCLUDE HCL FROM THE LIST OF COMPARABLES. INFORMED TECHNOLOGIES INDIA LTD. (INFORMED) 31. TPO CHOSEN THIS COMPANY AS COMPARABLE ON THE GR OUND THAT IT QUALIFIES ALL THE FILTERS. HOWEVER, ASSESSEE OP POSED THE EXCLUSION OF THIS COMPANY AS COMPARABLE ON THE GROUNDS THAT I T FAILS EMPLOYEE COST FILTER AS PERCENTAGE OF EMPLOYEES COS T OF INFORMED TECHNOLOGIES FOR FY 2006-07 IS 21.77% AS AGAINST AS SESSEES COST/SALES RATIO OF 48.93%. THE LD. DR OPPOSED THE CONTENTION ON THE GROUND THAT THIS COMPANY DOES NOT QUALIFY THE A SSESSEES OWN FILTERS AS THE ASSESSEE HAS NOT USED DATA OF FY 200 6-07. 32. LD. AR FOR THE ASSESSEE CONTENDED THAT THIS FIL TER HAS OTHERWISE BEEN ACCEPTED BY THE LD. CIT (A) WHILE RE JECTING MOLD- TEK FROM THE LIST OF COMPARABLE COMPANIES CHOSEN BY THE TPO AND FURTHER CONTENDED THAT ITAT REJECTED THIS COMPANY A S A COMPARABLE ON THE BASIS OF EMPLOYEE COST/SALES FILTER IN CASE OF E4E BUSINESS SOLUTIONS INDIA PVT. LTD. ITA NO.819/BANG/2011, A VAILABLE AT PAGE 223 OF CASE LAW COMPILATION. UNDISPUTEDLY, AS SESSEE AS WELL ITA NO6455/DEL./2012 16 AS E4E BUSINESS SOLUTIONS INDIA PVT. LTD. (SUPRA_ C OMPANIES ARE INTO BACK OFFICE SUPPORT SERVICES. THE COORDINATE BENCH IN THE CASE OF E4E BUSINESS SOLUTIONS INDIA PVT. LTD. (SUPRA) HELD THAT IN ITES SECTOR COMPANIES HAVING LESS THAN 25% OF SALES AS EMPLOYEE COST SHOULD NOT BE CHOSEN AS COMPARABLE FOR BENCHMA RKING INTERNATIONAL TRANSACTION. SO, KEEPING IN VIEW THE FACT THAT THIS FILTER HAS APPLIED BY LD. CIT (A) WHILE DEALING WIT H MOLD-TEK AND THE FACT THAT THE COORDINATE BENCH HAS HELD THAT CO MPANIES HAVE LESS THAN 25% OF THE SALES AS EMPLOYEE COST SHOULD NOT BE CHOSEN FOR COMPARABILITY FOR DETERMINATION OF ALP BY FOLLO WING ORDER PASSED BY COORDINATE BENCH, WE HEREBY ORDER TO EXCL UDE THIS COMPANY FROM THE FINAL LIST OF COMPARABLES. INFOSYS BPO LTD. (INFOSYS BPO) 33. TPO HAS CHOSEN THIS COMPANY AS A COMPARABLE BY REJECTING THE OBJECTION RAISED BY THE ASSESSEE THAT THIS COMP ANY HAS ABNORMAL TURNOVER ON THE GROUND THAT UNLIKE SOFTWAR E SEGMENT, TURNOVER WILL NOT AFFECT THE FUNCTIONALITIES OF COM PANIES OPERATING IN ITES SEGMENT. HOWEVER, LD. AR FOR THE ASSESSEE SOUGHT EXCLUSION OF THIS COMPANY ON THE GROUNDS INTER ALIA THAT INFOSYS BPO POSSESSES BRAND VALUE SUFFICIENT TO INFLUENCE T HE PRICING POLICY AND IMPACTING THE MARGIN EARNED BY THE INFOS YS BPO AND THAT IT IS A LARGE AND DIVERSIFIED SERVICE PROVIDER WHEREAS ASSESSEE ITA NO6455/DEL./2012 17 IS A CAPTIVE SERVICE PROVIDER PROVIDING BACK OFFICE SUPPORT SERVICES AND RELIED UPON ORDER RENDERED BY ITAT, DELHI BENCH IN CASE OF CALBIRATED HEALTHCARE SYSTEMS INDIA PVT. LTD. (ITA NO.5271/DEL/2012) (AVAILABLE AT PAGES 853 TO 862 OF PAPER BOOK- III ). 34. IN THE CALIBRATED HEALTHCARE SYSTEMS INDIA PVT. LTD. (SUPRA), COORDINATED BENCH EXAMINED THE COMPARABILI TY OF INFOSYS BPO WITH CALIBRATED HEALTHCARE SYSTEMS INDI A PVT. LTD. WHICH IS ALSO ENGAGED IN PROVIDING ITES SERVICES TO ITS FOREIGN ENTITY AS IN THE CASE OF ASSESSEE AND BY FOLLOWING THE JUDGMENT RENDERED BY HONBLE DELHI HIGH COURT IN CIT VS. AGNITY INDIA TECHNOLOGIES PVT. LTD. (2013) 219 TAXMAN 26 (DELH I) , DIRECTED THE EXCLUSION OF INFOSYS BPO FROM THE LIST OF COMPA RABLES ON THE GROUND THAT ASSESSEE DOES NOT HAVE ANY SUBSTANT IAL INTANGIBLE ASSETS; INFOSYS BPO HAS LARGE AND SUBSTANTIAL RESEA RCH DEVELOPMENT CENTRE WHEREAS THE ASSESSEE IS NOT UNDE RTAKING SUCH ACTIVITY. MOREOVER, THE ASSESSEE IS A MINIMAL RISK TAKING COMPANY WHEREAS INFOSYS BPO IS A FULL-FLEDGED RISK TAKING C OMPANY HAVING DIVERSIFYING BUSINESS. IN OTHER WORDS, INFO SYS BPO IS A GIANT COMPANY AND CANNOT BE A VALID COMPARABLE WITH THE ASSESSEE COMPANY. SO, WE HEREBY ORDER TO EXCLUDE THIS COMPA NY FROM THIS LIST OF COMPARABLES. ITA NO6455/DEL./2012 18 MAPLE SOLUTIONS LIMITED & TRITON CORP LTD. 35. THOUGH THE ASSESSEE HAS INITIALLY SOUGHT TO EXC LUDE BOTH THESE COMPANIES AS COMPARABLES ON GROUND OF EXTRA O RDINARY EVENTS I.E. MAPLE HAS BECOME 100% SUBSIDIARY OF TRITON AND BOTH THE COMPANIES BELONG TO RASTOGI GROUP OF COMPANIES AND THE DIRECTORS OF BOTH THE COMPANIES WERE FOUND TO HAVE ENGAGED IN FINANCIAL IRREGULARITIES BUT, DURING THE COURSE OF ARGUMENT, THE LD. AR FOR THE ASSESSEE HAS NOT PRESSED FOR THEIR EXCLUSION. LD. DR ALSO OPPOSED EXCLUSION OF THESE COMPARABLE ON THE GROUND THAT CH ARGES OF FINANCIAL IRREGULARITIES AGAINST THE DIRECTORS OF B OTH THE COMPANIES WERE LEVELED ABOUT 30 YEARS BACK AND HAVE NO IMPACT ON THE PROFITABILITY OF THE COMPANIES. SO, THESE COMPANIES ARE LEFT IN THE FINAL LIST OF COMPARABLES MADE BY THE TPO FOR BENCH -MARKING THE INTERNATIONAL TRANSACTIONS BEING NOT PRESSED BY THE ASSESSEE FOR EXCLUSION. VISHAL INFORMATION TECHNOLOGIES LTD. (VISHAL) 36. TPO HAS TAKEN THIS COMPANY AS COMPARABLE AFTER OBTAINING INFORMATION U/S 133(6) OF THE ACT. ASSESSEE SOUGHT EXCLUSION OF THIS COMPANY ON THE GROUND THAT THIS COMPANY IS FUN CTIONALLY DIFFERENT BEING IN THE BUSINESS OF OUTSOURCING SERV ICES. ASSESSEE ALSO RAISED THIS OBJECTION BEFORE THE TPO/CIT (A) T HAT VISHAL SPENT ONLY 2.3% OF THE REVENUE DURING FY 2006-07 TO WARDS ITA NO6455/DEL./2012 19 EMPLOYEES EXPENDITURE AND ABOUT 43% OF THE REVENUE IS EXPENDED TOWARDS PAYMENT TO THE VENDORS. LD. AR FOR THE ASS ESSEE FURTHER CONTENDED THAT THE FUNCTIONS PERFORMED, ASSETS EMPL OYED AND RISK ASSUMED BY VISHAL IS NOT COMPARABLE WITH THE ASSESS EE COMPANY AND RELIED UPON THE CASE OF HONBLE DELHI HIGH COUR T IN RAMPGREEN SOLUTIONS PVT. LTD. (ITA 102/205) (AVAILABLE AT PAGE 760 TO 811 OF THE PAPER BOOK-III). 37. IN THE CASE OF RAMPGREEN SOLUTIONS PVT. LTD. (S UPRA), THE ISSUE CAME UP FOR DETERMINATION BEFORE THE HONBLE JURISDICTIONAL HIGH COURT THAT, AS TO WHETHER VOICE CALL SERVICES AND KPO SERVICES WERE ESSENTIALLY ITES AND THE ENTITIES REN DERING THE AFORESAID SERVICES CAN BE COMPARED AS COMPARABLES F OR BENCHMARKING INTERNATIONAL TRANSACTIONS BY USING TN MM? HONBLE HIGH COURT HELD THAT VISHAL IS AN ENTITY EN GAGED IN KNOWLEDGE PROCESS OUTSOURCING SERVICES (KPO SERVICE S) WHERE THE SERVICE PROVIDERS HAVE TO EMPLOY ADVANCED LEVEL OF SKILLS AND KNOWLEDGE WHEREAS VOICE CALL SERVICES ARE LOWER END OF ITES AND EMPLOYMENT OF IT BASED DELIVERY SYSTEMS, THE CHARAC TERISTICS OF SERVICES, THE FUNCTIONAL ASPECTS, THE BUSINESS ENVI RONMENT, RISKS AND THE QUALITY OF HUMAN RESOURCES EMPLOYED WOULD B E MATERIALLY DIFFERENT IN LOWER END ITES AND HIGHER END ITES I.E . KPO. HONBLE HIGH COURT FURTHER HELD THAT WHERE THE CONT ROLLED ITA NO6455/DEL./2012 20 TRANSACTIONS ARE CLEARLY IN THE NATURE OF LOW END I TES AS IN THE CASE OF ASSESSEE BEING A CAPTIVE PROVIDER ENGAGED IN BAC K OFFICE WORK, FOR RENDERING DATA PROCESSING NOT INVOLVING DOMAIN KNOWLEDGE, INCLUSION OF KPO SERVICE PROVIDER AS COMPARABLE WOU LD NOT BE WARRANTED AND THE TRANSFER PRICING STUDY WOULD BE I MPACTED AT THE THRESHOLD. HONBLE HIGH COURT ORDERED TO EXCLUDE T HE VISHAL AS A COMPARABLE FOR ALP DETERMINATION OF RAMPGREEN SOLUTIONS PVT. LTD. (SUPRA) ENGAGED IN ITES BUSINESS BY MAKING FOLLOWI NG OBSERVATIONS :- '38. IN OUR VIEW, EVEN VISHAL COULD NOT BE CONSIDER ED AS A COMPARABLE, AS ADMITTEDLY, ITS BUSINESS MODEL WAS COMPLETELY DIFFERENT. ADMITTEDLY, VISHAL'S EXPENDIT URE ON EMPLOYMENT COST DURING THE RELEVANT PERIOD WAS A SM ALL FRACTION OF THE PROPORTIONATE COST INCURRED BY THE ASSESSEE, APPARENTLY, FOR 'THE REASON THAT MOST OF ITS WORK WAS OUTSOURCED TO OTHER VENDORS/SERVICE PROVIDERS. THE DRP AND THE TRIBUNAL ERRED IN BRUSHING ASIDE THIS V ITAL DIFFERENCE BY OBSERVING THAT OUTSOURCING WAS COMMON IN ITES INDUSTRY AND THE SAME WOULD NOT HAVE A BEARING ON PROFITABILITY. PLAINLY, A BUSINESS MODEL WHERE SERV ICES ARE RENDERED BY EMPLOYING OWN EMPLOYEES AND USING ONE'S OWN INFRASTRUCTURE WOULD HAVE A' DIFFERENT COST STR UCTURE AS COMPARED TO A BUSINESS MODEL WHERE SERVICES ARE OUTSOURCED. THERE WAS NO MATERIAL FOR THE TRIBUNAL TO CONCLUDE THAT THE OUTSOURCING OF SERVICES BY VISHAL WOULD HAVE NO BEARING ON THE PROFITABILITY OF THE S AID ENTITY. ' 38. SO, FOLLOWING DECISION RENDERED BY HONBLE HIGH COURT IN RAMPGREEN SOLUTIONS PVT. LTD. , WE ORDER TO EXCLUDE VISHALL FROM THE FINAL LIST OF COMPARABLES. ITA NO6455/DEL./2012 21 WIPRO LTD. (WIPRO) 39. THIS IS TPOS COMPARABLE IN WHICH SEGMENTAL DET AILS HAS BEEN OBTAINED U/S 133(6) OF THE ACT. HOWEVER, ASSE SSEE HAS SOUGHT ITS EXCLUSION ON GROUNDS OF SIGNIFICANTLY HIGHER TU RNOVER, ABNORMAL MARGINS, PRESENCE OF INTELLECTUAL PROPERTY, DIVERSI FIED BUSINESS, BRAND VALUE AND TURNOVER AND RELIED UPON CALIBRATED HEALTH SYSTEMS LTD. (SUPRA), AVAILABLE AT PAGES 853 TO 862 OF THE PAPE R BOOK. 40. COORDINATE BENCH OF ITAT, DELHI EXAMINED THE COMPARABILITY OF WIPRO WITH CALIBRATED HEALTH SYSTEMS LTD. , ENGAGED IN PROVIDING ITES SERVICES TO ITS FOREIGN E NTITY AS IN THE CASE OF ASSESSEE AND ORDERED ITS EXCLUSION ON THE G ROUND THAT THIS IS A GIANT ENTITY WITH MARKED DIFFERENCES AS REGARDS R ISK PROFILE, NATURE OF SERVICES, OWNERSHIP OF IP RIGHTS, EXPENDI TURE ON R&D, ETC. SO, FOLLOWING THE DECISION RENDERED BY COORDI NATE BENCH AS WELL AS THE FACT THAT THE ASSESSEE COMPANY IS A CAP TIVE SERVICE PROVIDER TAKING MINIMUM RISK HAVING NO INTANGIBLES CANNOT BE COMPARED WITH WIPRO WHICH IS HAVING DIVERSIFIED BUS INESS, OWNERSHIP OF SIGNIFICANT INTANGIBLES AND HUGE EXPEN DITURE ON R&D ETC. SO, WE HEREBY ORDER TO EXCLUDE THIS COMPANY F ROM THE FINAL LIST OF COMPARABLES. ITA NO6455/DEL./2012 22 COMPANY SOUGHT TO BE INCLUDED BY THE ASSESSEE COMPANY B2K CORP LTD. (B2K) 41. THIS IS ASSESSEES OWN COMPARABLE REJECTED BY T HE TPO ON THE SOLE GROUND THAT DATA FOR THE CURRENT YEAR IS N OT AVAILABLE. HOWEVER, ASSESSEE CONTENDED THAT FINANCIALS OF THE COMPANY WAS MADE AVAILABLE TO THE LD. TPO VIDE SUBMISSION DATED 01.10.2010, AVAILABLE AT PAGE 506 OF THE PAPER BOOK, MARGIN OF THE COMPANY WAS ALSO PROVIDED TO CIT (A), AVAILABLE AT PAGE 420 OF THE PAPER BOOK AND ANNUAL ACCOUNTS OF THE COMPANY WERE FINALI ZED ON 14 TH MAY, 2007, AVAILABLE AT PAGES 604 TO 627 OF THE PAP ER BOOK. 42. THE LD. DR VEHEMENTLY REPELLED THE ARGUMENT ADD RESSED BY LD. AR THAT NO SUCH FINANCIALS OF THE COMPANY WERE MADE AVAILABLE TO THE TPO AND HANDWRITTEN DATED 01.10.2010 IS WRI TTEN ON THE SUBMISSION AND HAD THE DATA BEEN AVAILABLE WITH THE TPO, HE WOULD HAVE CONSIDERED THE SAME. HOWEVER, PARA 1 OF TPOS ORDER, AVAILABLE AT PAGE 248 OF THE PAPER BOOK, GOES TO PR OVE THAT THE TPO HIMSELF ADMITTED TO HAVE RECEIVED THE SUBMISSION OF THE ASSESSEE DATED 01.102.010. SO, WITHOUT ENTERING INTO SUCH T ECHNICALITIES ADDRESSED BY THE LD. REPRESENTATIVES OF THE PARTIES TO THE APPEAL, WE ARE OF THE CONSIDERED VIEW THAT WHEN B2K IS ALSO IN TO ITES SERVICES AND CURRENT YEAR DATA IS AVAILABLE, THE TP O IS REQUIRED TO ITA NO6455/DEL./2012 23 EXAMINE ITS COMPARABILITY WITH THE ASSESSEE ON MERI TS FOR THE PURPOSE OF DETERMINATION OF ALP. GROUND NO.4 43. GROUND NO.4 IS NOT PRESSED, HENCE THE SAME IS D ISMISSED AS NOT PRESSED. GROUND NO.5 44. GROUND NO.5 IS PREMATURE, HENCE NEEDS NO ADJUDI CATION. 45. IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, THE P RESENT APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 18 TH DAY OF JANUARY, 2017. SD/- SD/- (S.V. MEHROTRA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 18 TH DAY OF JANUARY, 2017 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT (A) 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.