Infineon Technologies India Private Limited, Bangalore V. ACIT, Bangalore

ITA 657/BANG/2011

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8655 (ITAT-BANGALORE)
• Duration Of Justice: 5 year(s) 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 10-10-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 10-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K R VASUDEVAN
• Keywords: Related party transaction; Depreciation; Transfer pricing; International transaction
• Section: 92C; 143(3); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SMT ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ASSESSEES APPEAL ITA NO .657/BANG/2011 ASSESSMENT YEAR : 2005-06 M/S. INFINEON TECHNOLOGIES INDIA LTD., 3 RD FLOOR, PHASE-I, KALYANI PLATINA, SURVEY NO. 6 & 24, KUNDALAHALLI VILLAGE, K. R. PURAM HOBLI, BANGALORE 560 066. PAN : AABCS 6967 N VS. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 11(4), BANGALORE. APPELLANT RESPONDENT REVENUES APPEAL ITA NO . 6 08 / BANG/201 1 ASSESSMENT YEAR : 2005-06 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 11(4), BANGALORE. VS. M/S. INFINEON TECHNOLOGIES INDIA LTD., BANGALORE 560 066. PAN : AABCS 6967 N APPELLANT RESPONDENT REVENUE BY : MS. NEERA MALHOTRA, CIT (DR) ASSESSEE BY : SHRI. K. R. VASUDEVAN, ADVOCATE DATE OF HEARING : 17.10.2016 DATE OF PRONOUNCEMENT : 06. 01 .201 7 ITA NOS.657&608/BANG/2011 PAGE 2 OF 17 O R D E R PER ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER THESE ARE CROSS APPEALS FILED BY THE APPELLANT. 2. BRIEFLY, THE FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS A 100% EXPORT ORIENTED UNIT ESTABLI SHED UNDER THE SOFTWARE TECHNOLOGY PARK SCHEME. THE APPELLANT IS PRIMARILY ENGAGED IN THE BUSINESS OF SOFTWARE DEVELOPMENT SERVICES OF ELECTR ONIC INTEGRATED CIRCUITS AND FIRMWARE DEVELOPMENT OF INTEGRATED CIRCUITS. T HE APPELLANT ALSO PROVIDES MARKETING SUPPORT SERVICES TO ITS PARENT C OMPANY. 3. THE GROUNDS OF APPEAL BY THE ASSESSEE ARE: ITA NOS.657&608/BANG/2011 PAGE 3 OF 17 ITA NOS.657&608/BANG/2011 PAGE 4 OF 17 ITA NOS.657&608/BANG/2011 PAGE 5 OF 17 4. THE APPELLANT HAD FILED THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005-06 ON 31 ST OCTOBER, 2005, DECLARING TAXABLE INCOME AS NIL UND ER THE REGULAR PROVISIONS OF THE INCOME TAX ACT, 1961 (TH E ACT) AND PAID TAXES ON BOOK PROFITS UNDER SECTION 115JB OF THE ACT. 5. THE RETURN WAS ASSESSED BY THE ASSISTANT COMMISS IONER OF INCOME- TAX, CIRCLE-11(4), BANGALORE (HEREINAFTER REFERRED TO AS THE ASSESSING OFFICER) UNDER SECTION 143(3) VIDE ORDER DATED 31 ST DECEMBER, 2008 AND RECEIVED BY THE APPELLANT ON 1 ST JANUARY, 2008. 6. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER H AS MADE THE FOLLOWING ADJUSTMENTS/ADDITIONS IN THE SAID ORDER: ADJUSTMENT UNDER TRANSFER PRICING UNDER SECTION 92C A OF THE ACT THE LEARNED ASSESSING OFFICER MADE A REFERENCE TO T HE ADDITIONAL DIRECTOR OF INCOME TAX (TRANSFER PRICING) (HEREINAF TER REFERRED TO AS TPO) TO EXAMINE THE INTERNATIONAL TRANSACTIONS BE TWEEN THE APPELLANT AND ITS ASSOCIATED ENTERPRISES(AES). THE APPELLANT HAD ENTERED INTO AN ARRANGEMENT WITH ITS AE FOR PROVISION OF SOFTWARE DEVELOPMENT SERVICES AND MARK ETING SUPPORT SERVICES. 7. THE APPELLANT HAS GIVEN THEIR WRITTEN SUBMISSION S WHEREIN THEY HAVE QUOTED EXTENSIVELY FROM VARIOUS TRIBUNAL JUDGMENTS WHICH ARE ACTUALLY CASE SPECIFIC. ALSO THE APPELLANT HAS QUOTED FROM THE O ECD GUIDELINES. AFTER EXAMINING THE APPELLANTS WRITTEN SUBMISSION AND HA VING GONE THROUGH THE TPOS ORDER IT IS HELD THAT THE TPO AFTER DOING EXT ENSIVE ANALYSIS HAS COMPUTED THE ALP BASED ON THE TNMM. EVEN THE APPEL LANT HAD SELECTED ITA NOS.657&608/BANG/2011 PAGE 6 OF 17 TNMM AS MOST APPROPRIATE METHOD FOR DETERMINING OF ALP IN EARLIER YEARS AS MENTIONED BY THE TPO IN PARA 7.1 IN PAGE 32 OF H IS ORDER. THE TPO HAS DISCUSSED AT LENGTH THE REASONS FOR REJECTION OF CO ST PLUS METHOD AND THE CUP METHOD IN HIS DETAILED DISCUSSION IN PARA 7 PAG E 25 TO 32 AND HAS CATEGORICALLY CONCLUDED THE TNMM AS THE MOST APPROP RIATE METHOD AND IT IS HELD THAT TPOS FINDING IN RESPECT OF SELECTION OF THE MOST APPROPRIATE METHOD AS TNMM IS IN ORDER. AS CAN BE SEEN FROM TH E DETAILED ANALYSIS OF THE TPO, IT IS SEEN THAT THE FILTERS ADOPTED BY THE TPO ARE IN ORDER AS MOST SIMILAR CASES AS THAT OF THE APPELLANT ARE CHOSEN B Y APPLYING FILTERS LIKE COMPANIES WHOSE SOFTWARE INCOME IS LESS THAN ONE CR ORE, WHOSE RELATED PARTY TRANSACTIONS ARE MORE THAN 25% OF THE SALES, WHOSE EXPORT SALES ARE LESS THAN 25% OF THE TOTAL SALES, COMPANIES INCURRI NG LOSSES YEAR AFTER YEAR COMPANIES HAVING DIFFERENT FINANCIAL YEARS OTHER TH AN YE 31.03.2005. EVEN THE TPO HAS CONSIDERED 02 COMPARABLES AS GIVEN BY T HE APPELLANT. FINALLY, THE TPO ZEROED IN ON 594 COMPARABLES, REJECTED 577 OUT OF THEM BY APPLYING FILTERS AND ACCEPTED 17 AS COMPARABLE CASE S. SUBSEQUENTLY, AFTER ACCEPTING 02 COMPARABLES, TOTAL COMPARABLES WERE DE TERMINED AT 17. THE TPO FINALLY ARRIVED AT 17 COMPARABLES AND DETERMINE D THE AVERAGE OP TO TOTAL COST AT 26.59%. FROM THE TPOS ORDER IT IS V ERY CLEAR THAT THE TPO HAS USED CONTEMPORANEOUS DATA AS AGAINST APPELLANTS AD OPTION OF EARLIER YEARS DATA. THE TPO HAS EXTENSIVELY SEARCHED PROWESS, CAPITAL LINE AND NASSCOM WEBSITE WHILE ZEROING ON THE COMPARABLES. ACCORDINGLY, IT IS HELD THAT THE TPO HAD DONE EXCEPTIONAL WORK AND ONL Y AFTER GIVING OPPORTUNITIES TO THE APPELLANT HAS WORKED OUT THE P LI AND ACCORDINGLY THE APPELLANTS ARGUMENTS ON ALL THESE GROUNDS CANNOT B E ACCEPTED EXCEPT IN RESPECT OF THE FOLLOWING: ALLOWANCE OF 5% STANDARD DEDUCTION EXCLUSION OF SUPER PROFIT/WIDE VARIATION OP TO COST COMPANIES. ITA NOS.657&608/BANG/2011 PAGE 7 OF 17 8. AGGRIEVED WITH THE ORDER OF THE CIT (A), BANGALO RE DATED 02/03/2011 THE ASSESSEE PREFERRED AN APPEAL BEFORE HONBLE ITA T. THE LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT AT PAGE 20, PARA 4.5 OF THE ORDER OF THE CIT(A) WHEREIN HE HAD DISCUSSED ABOUT THE COMPARABL ES SELECTED BY THE TPO. THE CIT (A) HAD HELD AS FOLLOWS: ACCORDINGLY, IT IS HELD THAT THE TPO HAD DONE EXCE PTIONAL WORK AND ONLY AFTER GIVING OPPORTUNITIES TO THE APPELLANT HAS WOR KED OUT THE PLI AND ACCORDINGLY THE APPELLANTS ARGUMENTS ON ALL THESE GROUNDS CANNOT BE ACCEPTED EXCEPT IN RESPECT OF THE FOLLOWING: ALLOWANCE OF 5% STANDARD DEDUCTION EXCLUSION OF SUPER PROFIT/WIDE VARIATION OP TO COST COMPANIES. 9. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO SUBMIT TED THAT THE CIT(A) HAD NOT APPLIED HIS MIND AND HAD GIVEN A GENERAL ST ATEMENT THAT THE TPO HAD DONE EXCEPTIONAL WORK. WE HAVE PERUSED THE ORDER O F THE CIT(A). WE FIND THAT THE CIT(A) HAS NOT GIVEN ANY REASONS FOR THE C OMPARABLES TO HAVE BEEN REJECTED BY THE TPO OR ELABORATELY DEALT WITH THE I SSUE. THE ABSENCE OF REASONED ORDER BY THE CIT(A) HAS PREVAILED ON US TO SEND BACK THE ISSUE TO THE FILE OF THE TPO TO PASS A DENOVA ORDER TO DETER MINE THE PLI AFTER GIVING REASONABLE OPPORTUNITY TO THE ASSESSEE TO PRESENT I TS CASE. 10. THE LEARNED COUNSEL FOR THE ASSESSEE STATED THA T GROUNDS 1 TO 1.10 IS NOT PRESSED. THE LEARNED COUNSEL ALSO STATED THAT HE WAS PRESSING GROUND NO. 1.11 AND GROUND NOS. 1.12, 1.13, 1.14, 1.15 AND 1.16 ARE NOT PRESSED. THE LEARNED COUNSEL BY WAY OF ADDITIONAL GROUNDS RA ISED GROUND NO. 1.17 WHICH IS AS FOLLOWS: ITA NOS.657&608/BANG/2011 PAGE 8 OF 17 THE DEPRECIATION COST AS A PERCENTAGE OF THE COST O F THE APPELLANT DURING THE FINANCIAL YEAR 2004-05 IS SIGNIFICANTLY DIFFERENT FROM THAT OF THE COMPARABLE COMPANIES. THE DIFFERENCE IN THE DEPRECIATION COST ARISES DUE TO DIFFERENCES IN THE ACCOUNTING TREATMENT ACROSS THE COMPARABLE COMPANIE S AND THE APPELLANT. CONSIDERING THE ABOVE FACT, TO ACHIEVE RELIABLE COM PARABILITY, THE MARGINS OF THE COMPARABLE COMPANIES SHOULD BE ADJUS TED FOR DIFFERENCES IN DEPRECIATION COST OF COMPARABLE COMP ANIES AND TESTED PARTY. 11. WE HEARD BOTH THE PARTIES. WE ARE OF THE OPINI ON THAT WHEN APPLYING THE ARMS LENGTH PRINCIPLE, THE CONDITIONS OF A CON TROLLED TRANSACTION (I.E. A TRANSACTION BETWEEN A TAXPAYER AND AN ASSOCIATED EN TERPRISE) ARE COMPARED T THE CONDITIONS OF COMPARABLE UNCONTROLLED TRANSACTI ONS. IN THIS CONTEXT, TO BE COMPARABLE MEANS THAT: NONE OF THE DIFFERENCES ( IF ANY) BETWEEN THE SITUATIONS BEING COMPARED COULD MATERIALLY AFFECT T HE CONDITION BEING EXAMINED IN THE METHODOLOGY (E.G. PRICE OR MARGIN). IN CASE, THERE ARE ANY SUCH DIFFERENCES, REASONABLY ACCURATE ADJUSTMENTS N EED TO BE MADE TO ELIMINATE THE EFFECT OF ANY SUCH DIFFERENCES. THER E ARE DIFFERENCES IN THE TREATMENT ACROSS ENTERPRISES OF OPERATING EXPENSES AND NON-OPERATING EXPENSES PARTICULARLY OF DEPRECIATION AFFECTING THE NET PROFITS. SUCH DIFFERENCES SHOULD BE RECKONED IN ORDER TO ACHIEVE RELIABLE COMPARABILITY BETWEEN THE TAXPAYER AND THE THIRD PARTY COMPARABLE COMPANIES. HENCE, IT IS ESSENTIAL TO PERFORM A DEPRECIATION ADJUSTMENT TO B RIDGE THE DISPARITIES BETWEEN APPELLANT AND THE COMPARABLE COMPANIES SELE CTED BY THE TPO. ITA NOS.657&608/BANG/2011 PAGE 9 OF 17 THEREFORE, IT IS NECESSARY TO MAKE APPROPRIATE ADJU STMENTS FOR DEPRECIATION WHILE BENCHMARKING THE APPELLANT WITH COMPARABLE CO MPANIES. HENCE WE SEND BACK THIS ISSUE TO THE FILE OF TPO WHO SHALL F OLLOW OUR DIRECTIONS. 12. THE LEARNED COUNSEL ALSO RAISED ADDITIONAL GROU NDS 1.18 TO 1.21 WHICH ARE AS FOLLOWS: GROUND NO.1.18: EXENSYS SOFTWARE SOLUTIONS LIMITED SHOULD BE REJECTED AS COMPARABLE COMPANIES. THE APPELLANT SUBMITS THAT THE LD. CIT(A) HAS ERRED IN NOT ADJUDICATING EXENSYS SOFTWARE SOLUTIONS LIMITED ON THE BASIS OF FUNCTIONAL COMPARABILITY AND REJECTING THE COMPARABLE COMPANY ONLY ON THE BASIS OF SUPER PROFITS. GROUND NO. 1.19: THIRDWARE SOLUTIONS LIMITED SHOULD BE REJECTED AS COMPARABLE COMPANIES. THE APPELLANT SUBMITS THAT THE LD. CIT(A) HAS ERRED IN NOT ADJUDICATING THIRDWARE SOLUTIONS LIMITED ON THE BAS IS OF FUNCTIONAL COMPARABILITY AND REJECTING THE COMPARABLE COMPANY ONLY ON THE BASIS OF SUPER PROFITS. GROUND NO. 1.20: INFOSYS LIMITED SHOULD BE REJECTED AS COMPARABLE COMPANIES. THE APPELLANT SUBMITS THAT THE LD. CIT(A) HAS ERRED IN NOT ADJUDICATING INFOSYS LIMITED ON THE BASIS OF FUNCTI ONAL COMPARABILITY AND REJECTING THE COMPARABLE COMPANY ONLY ON THE BASIS OF SUPER PROFITS. ITA NOS.657&608/BANG/2011 PAGE 10 OF 17 GROUND NO. 1.21: BODHTREE CONSULTING LIMITED SHOULD BE REJECTED AS A COMPARABLE COMPANY THE APPELLANT SUBMITS THAT THE LD. CIT (A) HAS ERRE D IN INCLUDING BODHTREE AS A COMPARABLE COMPANY TO THE APPELLANT, WHILE DOING THE COMPARABILITY ANALYSIS. 13. WITH RESPECT TO THE ADDITIONAL GROUNDS, FOLLOWI NG THE DECISIONS IN THE CASE OF M/S. QUARK SYSTEMS WE ADJUDICATE AS FOLLOWS : PER CONTRA, LEARNED DR STRONGLY OBJECTING ADMISSIO N OF ABOVE ADDITIONAL GROUNDS SUBMITTED THAT IN CASE THESE WER E ADMITTED, THE COMPARABILITY OF THE CONCERNED COMPANIES HAD TO BE REFERRED BACK TO THE AO/TPO FOR VERIFICATION FRESH. AFTER CONSIDERING THE AVERMENTS OF THE COUNSELS WIT H REGARD TO ADMISSION OF ADDITIONAL GROUNDS, WE FIND FORCE IN C ONTENSION OF THE LEARNED AR THAT BY VIRTUE OF SPECIAL BENCH DECISION IN THE CASE OF M/S. QUARK SYSTEMS PVT. LTD., (SUPRA), ASSESSEE CAN RAISE ADDITIONAL GROUNDS SEEKING EXCLUSION OF COMPARABLES SELECTED B Y IT OR NOT OBJECTED BY IT BEFORE THE LOWER AUTHORITIES. HOWEV ER, THE HONBLE PUNJAB & HARYANA HIGH COURT IN (2011) 62 DTR 0182 H AD UPHELD THE SPECIAL BENCH DECISION IN THE CASE OF M/S QUARK SYS TEMS PVT. LTD., (SUPRA) SPECIFICALLY NOTING THAT THE SPECIAL BENCH HAD REMITTED THE ISSUE OF COMPARABILITY OF SUCH COMPANIES TO THE AO/ TPO FOR VERIFICATION AFRESH. HENCE, WE ARE ADMITTING THE A DDITIONAL GROUNDS ITA NOS.657&608/BANG/2011 PAGE 11 OF 17 AND WE SET ASIDE THE ISSUES TO THE FILE OF AO/TPO T O ADJUDICATE ON THE SAME. 14. THE LEARNED COUNSEL ALSO POINTED OUT THAT M/S. BODHTREE CONSULTING LTD., IS FUNCTIONALLY NOT COMPARABLE TO THAT OF THE ASSESSEE COMPANY AND RELIED ON THE DECISION OF THE ARM EMBEDDED TECHNOLO GIES PVT. LTD., IN IT(TP)A NO. 1659/BANG/2014 . 15. FURTHER, THE APPELLANT SUBMITTED THAT BODHTREE PROVIDES E-PAPER SOLUTIONS, DATA CLEANSING SOFTWARE, WEBSITE DEVELOP MENT AND OTHER CUSTOMIZED SOFTWARE AND THAT THE E-PAPER SOLUTIONS AND DATA CLEANSING SERVICES WOULD COME UNDER CATEGORY OF INFORMATION T ECHNOLOGY ENABLED SERVICES MAKING IT FUNCTIONALLY NOT COMPARABLE TO T HE APPELLANT WHICH IS INVOLVED IN THE SOFTWARE DEVELOPMENT SERVICES. THE APPELLANT ALSO SUBMITTED THAT THE BODHTREE HAS SIGNIFICANT RELATED PARTY TRANSACTION OF EXPORT SALES TO PERIGON LIC, USA OF INR 133.90 LAKH S, BEING 34.68% OF THE TOTAL TURNOVER. 16. HENCE, ADMITTING THE ADDITIONAL GROUND WE SET A SIDE THIS COMPARABLE TO FILE OF THE AO/TPO IN ORDER TO DECIDE WHETHER IT IS TO BE INCLUDED IN THE SET OF COMPARABLES TAKEN BY TPO. 17. WITH RESPECT TO 1.11, THE ASSESSEES CONTENTION FOR REJECTION OF THE COMPARABLE COMPANY IS GIVEN BELOW: SL. NO. NAME OF THE COMPANY CONTENTIONS OF THE APPELLANT FO R REJECTING THE COMPARABLE COMPANY 1. FOURSOFT LTD., ENGAGED IN SALE OF PRODUCTS; SUBSTANTIAL SELLING AND MARKETING EXPENSES; AND ITA NOS.657&608/BANG/2011 PAGE 12 OF 17 RELATED PARTY TRANSACTIONS GREATER THAN 0% 2. GEOMETRIC SOFTWARE SOLUTIONS CO LTD., RELATED PARTY TRANSACTIONS GREATER THAN 0%; OWNS INTELLECTUAL PROPERTY; AND SERVICES ARE IN THE NATURE OF DESIGN AND ENGINEERING SERVICES. 3. SANKHYA INFOTECH ENGAGED IN SALE OF PRODUCTS; SUBSTANTIAL SELLING AND MARKETING EXPENSES; EXTREME HIGH PROFIT COMPANY; AND OWNS INTELLECTUAL PROPERTY & PATENT. 4. SASKEN NETWORK SYSTEM SUBSTANTIAL SELLING AND MARKETING EXPENSES. 5. SASKEN COMMUNICATION TECHNOLOGIES LTD., ENGAGED IN SALE OF PRODUCTS; AND SUBSTANTIAL SELLING AND MARKETING EXPENSES. 6. TATA ELXSI LTD., SERVICES ARE IN THE NATURE OF PRODUCT ENGINEERING AND DESIGN SERVICES. 7. FLEXTRONICS SOFTWARE SERVICES PRIVATE LIMITED (SEG) EXTREME HIGH PROFIT COMPANY; AND RELATED PARTY TRANSACTIONS GREATER THAN 0%. 18. WE FIND THAT 7 COMPANIES ARE TO BE REJECTED/EXC LUDED FROM THE LIST OF COMPARABLES FOR THE REASONS GIVEN IN THE CHART. HE NCE WE DIRECT THE TPO TO EXCLUDE 7 COMPANIES STATED IN 1.11. 19. THE TPO SHALL REWORK THE PLI AFTER FOLLOWING TH E DIRECTIONS GIVEN BY US WITH RESPECT TO GROUND NO. 1.11 AND ALSO THE ADD ITIONAL GROUNDS WHICH ARE BEING RESTORED TO HIS FILE. ITA NOS.657&608/BANG/2011 PAGE 13 OF 17 REVENUES APPEAL (ITA NO.608/BANG/2011): GROUNDS OF APPEAL: ITA NOS.657&608/BANG/2011 PAGE 14 OF 17 ITA NOS.657&608/BANG/2011 PAGE 15 OF 17 GROUND NO. 1 IS GENERAL IN NATURE. GROUND NOS. 2 A ND 3 ARE COVERED IN THE DECISION OF THE HONBLE HIGH COURT IN THE CASE OF T ATA ELXSI LTD., IN 349 ITR 98. GROUND NOS. 4, 5, 6 AND 7 ARE COVERED BY TH E DECISION OF DCIT VS. GLOBAL VARTAGE PVT. LTD., (2010 TIOL 24 ITAT DEL) WHEREIN IT HAS BEEN HELD AS UNDER: THEREFORE, HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, WE FIND THAT SIMILAR FACTS AND CIRCUMSTANCES EXISTED FOR THE AY 2006-07 IN ASSESSEES OWN CASE AND THE COORDINATE BENCH OF THIS TRIBUNAL VIDE ITS ORDER DATED 29.07.2011 IN ITA. NO. 1433/BANG/2010 HAS DISCUSSED THE ISSUE AT LENGTH AND AT PARA 10 OF ITS ORDER HAS HELD AS UNDER: \ ITA NOS.657&608/BANG/2011 PAGE 16 OF 17 ALSO CONSIDER THE JUDICIAL PRECEDENTS ON THE ISSUE INCLUDING THE ORDERS, OF THE TRIBUNAL IN ASSESSEES OWN CASE, WHILE DETERMINING THE ALP. 5. HAVING GONE THROUGH THE RECORD BEFORE US, AS RECORDED ABOVE, WE FIND THAT EVEN DURING THE RELEVA NT ASSESSMENT YEAR, THE ASSESSEE HAD MADE ELABORATE SUBMISSIONS AND BOTH THE TPO AS WELL AS THE DRP HAV E FAILED TO CONSIDER THE SAID OBJECTIONS OBJECTIVELY. IN VIEW OF THE SAME, WE DEEM IT LIT AND PROPER TO REMIT THIS I SSUE TO THE FILE OF THE A.O./TPO FOR RECONSIDERATION OF THE ISS UE IN ACCORDANCE WITH LAW. THE A.O./TPO IS DIRECTED TO GI VE FAIR OPPORTUNITY OF HEARING TO THE ASSESSEE AND ALSO CON SIDER JUDICIAL PRECEDENTS ON THE ISSUE INCLUDING THE ORDE RS OF THE TRIBUNAL IN ASSESSEES OWN CASE WHILE DETERMINING T HE ALP. GROUND NOS. 8, 9 AND 10 HAVE BEEN ALREADY DECIDED I N ASSESSEES APPEAL IN ITA NO. 657. GROUND NO. 11 IS CONSEQUENTIAL AND HAS TO BE WORKED OUT BY THE AO AFTER ADJUDICATING THE GROUNDS PREFER RED IN THIS APPEAL. GROUND NOS. 12 AND 13 ARE GENERAL. ITA NOS.657&608/BANG/2011 PAGE 17 OF 17 20. IN THE RESULT, THE APPEALS OF THE REVENUE AND A SSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF JANUARY 2017. SD/- SD/- (A. K. GARODIA) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDI CIAL MEMBER BANGALORE. DATED: 6 TH JANUARY 2017. /NS/ COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.