DCIT, CHENNAI V. Polaris Consulting & Services P Ltd., CHENNAI

ITA 765/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6290 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 21-03-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 28-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PATHLAVATH PEERYA
• Keywords: Transfer pricing; International transaction; Services rendered outside India
• Section: 92C; 92B; 92F; 92A; 10B; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI . . . , !', $ %& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI SANJAY ARORA, ACCOUNTANT MEMBER ./ ITA NO.1218/MDS/2016 ) *) / ASSESSMENT YEAR : 2010-11 & ./ ITA NO.615/MDS/2016 ) *) / ASSESSMENT YEAR : 2011-12 M/S POLARIS CONSULTING & SERVICES LIMITED, NO.244, POLARIS HOUSE, ANNA SALAI, CHENNAI - 600 006. PAN : AAACP 4341 E V. THE PRINCIPAL COMMISSIONER OF INCOME TAX, CHENNAI-5, THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 5(2), CHENNAI - 600 034. (,-/ APPELLANT) (./,-/ RESPONDENT) ./ ITA NO.765/MDS/2016 ) *) / ASSESSMENT YEAR : 2011-12 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 5(2), CHENNAI - 600 034. V. M/S POLARIS CONSULTING & SERVICES LIMITED, NO.244, POLARIS HOUSE, ANNA SALAI, CHENNAI - 600 006. (,-/ APPELLANT) (./,-/ RESPONDENT) )01 2 3 /ASSESSEE BY : SHRI N. VENKATRAMAN, SR. ADVOCATE SHRI V. UBHAYA BHARATHI, ADVOCATE 2 3 /REVENUE BY : SHRI PATHLAVATH PEERYA, CIT 4 2 1$ / DATE OF HEARING : 07.07.2017 5!* 2 1$ / DATE OF PRONOUNCEMENT : 18.08.2017 2 I.T.A. NO.1218, 765 & 615/MDS/16 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: I.T.A. NO.1218/MDS/2016 FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX, CHENNAI-5, CHENNAI, DATED 24.02.2016. THE OTHER TW O APPEALS ARE FILED BY THE ASSESSEE AND REVENUE FOR THE ASSESSMEN T YEAR 2011- 12 AGAINST THE ORDER OF THE DISPUTE RESOLUTION PANE L-2, BANGALORE, DATED 30.12.2015. SINCE COMMON ISSUES ARISE FOR CO NSIDERATION IN ALL THESE APPEALS, WE HEARD THESE APPEALS TOGETHER AND DISPOSING OF THE SAME BY THIS COMMON ORDER. 2. THERE WAS A DELAY OF 24 DAYS IN FILING THE APPEA L BY THE REVENUE. THE REVENUE HAS FILED A PETITION FOR COND ONATION OF DELAY. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESEN TATIVE AND LD. SR. COUNSEL FOR THE ASSESSEE. WE FIND THAT THE RE WAS SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE THE STIPULAT ED TIME. THEREFORE, WE CONDONE THE DELAY AND ADMIT THE APPEAL FILED BY THE REVENUE. LETS FIRST TAKE I.T.A. NO.1218/MDS/2016. 3. SHRI N. VENKATRAMAN, THE LD. SR. COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 10A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') TO THE EXTENT OF 3 I.T.A. NO.1218, 765 & 615/MDS/16 ` 76,83,44,038/-. IN FACT, THE ASSESSING OFFICER ALL OWED THE CLAIM OF THE ASSESSEE. HOWEVER, ACCORDING TO THE LD. SR. CO UNSEL, THE PRINCIPAL COMMISSIONER FOUND THAT THE ASSESSEE HAS TWO UNITS, NAMELY, 10A ELIGIBLE UNIT AND NON 10A UNIT. THE PR OFIT OF THE ELIGIBLE 10A UNIT WAS 24.6% AS AGAINST 5.42% IN RESPECT OF N ON 10A UNIT. THE PRINCIPAL COMMISSIONER ALSO FOUND THAT THE ASSE SSEE WAS NOT MAINTAINING ANY SEPARATE BOOKS OF ACCOUNT FOR ELIGI BLE 10A UNIT. THEREFORE, ACCORDING TO THE LD. SR. COUNSEL, THE PR INCIPAL COMMISSIONER CONCLUDED THAT THE ASSESSEE HAS DECLAR ED LESSER PROFIT IN RESPECT OF NON 10A UNIT BY REDUCING THE T AXABLE PROFIT BY BOOKING EXCESSIVE EXPENDITURE. 4. THE LD. SR. COUNSEL FOR THE ASSESSEE FURTHER SUB MITTED THAT THE NON 10A UNIT INCLUDES A BRANCH AT USA. IN THE US BRANCH, THE NATURE OF THE BUSINESS WAS SUCH THAT THE PROFIT WAS AT A LOWER RATE. ACCORDING TO THE LD. SR. COUNSEL, THE PROFIT AND TU RNOVER OF THE US BRANCH OF THE ASSESSEE CANNOT BE CONSIDERED, HENCE, THE PRINCIPAL COMMISSIONER IS NOT JUSTIFIED IN EXERCISING HIS REV ISIONAL JURISDICTION. ACCORDING TO THE LD. SR. COUNSEL, AS FAR AS THE ASS ESSEES BUSINESS IS CONCERNED, THERE WAS NO DISTINCTION BETWEEN ELIG IBLE 10A UNIT AND NON-ELIGIBLE 10A UNIT. ACCORDING TO THE LD. SR. CO UNSEL, IT IS NOT 4 I.T.A. NO.1218, 765 & 615/MDS/16 MANDATORY TO MAINTAIN SEPARATE BOOKS ONE FOR ELIGIB LE 10A UNIT AND ANOTHER FOR NON-ELIGIBLE 10A UNIT. THE ASSESSEE BE ING INDIAN MULTINATIONAL COMPANY, ELIGIBLE FOR DEDUCTION UNDER SECTION 10A OF THE ACT, THEREFORE, ACCORDING TO THE LD. SR. COUNSE L, THE PRINCIPAL COMMISSIONER IS NOT JUSTIFIED IN APPLYING AVERAGE P ROFIT OF ASSESSEE AT 11.31%. 5. ON THE CONTRARY, SH. PATHLAVATH PEERYA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT ADMITTE DLY THE ASSESSEE IS AN INDIAN BASED MULTINATIONAL COMPANY E NGAGED IN DEVELOPMENT OF SOFTWARE. IT IS NOT IN DISPUTE THAT THE ASSESSEE IS HAVING ELIGIBLE 10A UNIT AND NON-ELIGIBLE 10A UNIT. REFERRING TO THE IMPUGNED ORDER OF THE PRINCIPAL COMMISSIONER, MORE PARTICULARLY PAGE 2, THE LD. D.R. SUBMITTED THAT 10A UNIT EARNED AVERAGE PROFIT OF 24.6%, WHEREAS THE NON 10A UNIT EARNED AVERAGE P ROFIT OF 5.42%. THE TOTAL AVERAGE COMES TO 11.31%. THEREFORE, ACCO RDING TO THE LD. D.R., THE PRINCIPAL COMMISSIONER FOUND THAT IN THE ABSENCE OF ANY SEPARATE BOOKS FOR 10A UNIT AND NON 10A UNIT, T HE PROFIT DECLARED FOR NON 10A UNIT HAS TO BE AVERAGED WITH R EFERENCE TO THE PROFIT OF 10A UNIT AND AVERAGE PROFIT COMES TO NEAR LY 11.31% NEEDS 5 I.T.A. NO.1218, 765 & 615/MDS/16 TO BE UNIFORMLY APPLIED FOR CLAIMING DEDUCTION UNDE R SECTION 10A OF THE ACT. 6. REFERRING TO THE ORDER OF THE ASSESSING OFFICER, THE LD. D.R. SUBMITTED THAT THE ASSESSING OFFICER WITHOUT MAKING ANY ENQUIRY, HAS SIMPLY ACCEPTED THE CLAIM OF DEDUCTION UNDER SE CTION 10A OF THE ACT. THE NEGLIGENCE/OMISSION ON THE PART OF TH E ASSESSING OFFICER TO MAKE NECESSARY ENQUIRIES WOULD RENDER TH E ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF REVENUE. THEREFORE, ACCORDING TO THE LD. D.R., THE PRINCIPAL COMMISSIONER HAS RIGHTLY INVOKED HIS JURISDICTION UNDER SECTION 263 OF THE ACT AND DIRECTED THE ASSESSING OFFICER TO MODIFY THE ASSESS MENT BY WITHDRAWING THE EXCESS DEDUCTION CLAIMED BY THE ASS ESSEE UNDER SECTION 10A OF THE ACT TO THE EXTENT OF ` 37,10,94,443/-. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE-COMPANY IS AN INDIAN BASE D MULTINATIONAL COMPANY ENGAGED IN THE BUSINESS OF SOFTWARE DEVELOP MENT. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE CLAIMED DEDUCTION TO THE EXTENT OF ` 76,83,44,038/-. THE PRINCIPAL COMMISSIONER FOUND THAT THE ASSESSEE, BY BOOKING EXCESSIVE EXPENDITURE IN RESPECT OF 6 I.T.A. NO.1218, 765 & 615/MDS/16 NON 10A UNIT, REDUCED THE TAXABLE PROFIT AND INCREA SED THE ELIGIBLE 10A UNIT, THEREBY THE ASSESSEE CLAIMED EXCESSIVE DE DUCTION UNDER SECTION 10A OF THE ACT TO THE EXTENT OF ` 37,10,94,443/-. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS NOT MAINTAINED SEPARA TE BOOKS OF ACCOUNT FOR THE ELIGIBLE 10A UNIT AND NON 10A UNIT. THE LD. SR. COUNSEL FOR THE ASSESSEE NOW CONTENDS BEFORE THIS T RIBUNAL THAT NON 10A UNIT INCLUDES THE UNIT AT USA. WHEN THE AS SESSEE HAS NON 10A UNIT AT USA, IT IS NOT UNDERSTOOD AS TO HOW SEP ARATE BOOKS WERE NOT MAINTAINED FOR USA BRANCH. 8. IN THE GROUNDS OF APPEAL, MORE PARTICULARLY AT 7 , IT IS CLAIMED THAT SEPARATE STATEMENT OF PROFIT & LOSS ACCOUNT FO R EACH UNIT WAS MAINTAINED. HOWEVER, IT IS NOT MANDATORY TO MAINTA IN SEPARATE BOOKS FOR DIFFERENT UNITS FOR CLAIMING DEDUCTION UN DER SECTION 10A OF THE ACT. THE LD. SR. COUNSEL ALSO CLAIMS THAT THE RE IS NO MANDATORY REQUIREMENT FOR MAINTAINING SEPARATE BOOKS FOR ELIG IBLE 10A UNIT. WHEN THE ASSESSEE SUBMITS THAT NO SEPARATE BOOKS WE RE MAINTAINED FOR ELIGIBLE 10A UNIT AND NON 10A UNIT, AS RIGHTLY OBSERVED BY THE PRINCIPAL COMMISSIONER, AVERAGE PRO FIT HAS TO BE APPLIED FOR THE PURPOSE OF ALLOWING DEDUCTION UNDER SECTION 10A OF THE ACT. HOWEVER, THIS TRIBUNAL IS OF THE CONSIDER ED OPINION THAT 7 I.T.A. NO.1218, 765 & 615/MDS/16 WHEN THE ASSESSEE SPECIFICALLY CLAIMS THAT ONE OF T HE NON 10A UNIT WAS IN USA, THE EXPENDITURE INCURRED IN USA HAS TO BE RECORDED IN THE SEPARATE BOOKS MAINTAINED IN USA, EVEN THOUGH T HE ASSESSEE- COMPANY IS INDIAN BASED. OTHERWISE, THE BRANCH AT USA MAY NOT BE ABLE TO CARRY OUT ITS FINANCIAL TRANSACTION AS E XPECTED. FURTHER, WITHOUT MAINTAINING SEPARATE BOOKS OF ACCOUNT FOR T HE PURPOSE OF EXPENSES, IT IS NOT KNOWN HOW THEY ARE ABLE TO PREP ARE PROFIT & LOSS ACCOUNT FOR EACH UNIT. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTLY EXERCISED ITS JURISDICTION UNDER SECTION 263 OF THE ACT. 9. THE FACT THAT THE ASSESSING OFFICER HAS NOT MADE ANY ENQUIRY WITH REGARD TO MAINTENANCE OF BOOKS OF ACCOUNT AND REDUCING OF PROFIT IN RESPECT OF NON 10A UNIT SHOWS THAT THE OR DER OF THE ASSESSING OFFICER IS ERRONEOUS AND ALSO PREJUDICIAL TO THE INTERESTS OF REVENUE. THEREFORE, THIS TRIBUNAL DOES NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. HOWEVER, THE PRINCIPAL COMMISSI ONER DIRECTED THE ASSESSING OFFICER TO WITHDRAW THE EXCESS DEDUCT ION ALLOWED TO THE EXTENT OF ` 37,10,94,443/- WITHOUT VERIFYING HOW THE US BRANCH OF THE ASSESSEE WAS ABLE TO CARRY OUT BUSINESS WITHOUT MAINTAINING 8 I.T.A. NO.1218, 765 & 615/MDS/16 SEPARATE BOOKS OF ACCOUNT. SINCE THIS ASPECT HAS T O BE VERIFIED, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSE SSING OFFICER HAS TO RE-EXAMINE THE MATTER. ACCORDINGLY, WHILE CONFI RMING THE ORDER OF THE PRINCIPAL COMMISSIONER UNDER SECTION 263 OF THE ACT, WE MODIFY THE ORDER OF THE PRINCIPAL COMMISSIONER BY DIRECTIN G THE ASSESSING OFFICER TO EXAMINE WHETHER THE ASSESSEE, IN FACT, I S MAINTAINING BOOKS FOR ELIGIBLE 10A UNIT AND NON 10A UNIT AND IN CASE, NO BOOKS WERE MAINTAINED FOR NON 10A UNIT, INCLUDING THE SO- CALLED BRANCH IN USA, HOW THE ASSESSEE WAS ABLE TO PREPARE SEPARATE PROFIT & LOSS ACCOUNT FOR EACH UNIT. THE ASSESSING OFFICER THERE AFTER SHALL DECIDE THE ISSUE AFRESH IN ACCORDANCE WITH LAW, AFTER GIVI NG A REASONABLE OPPORTUNITY TO THE ASSESSEE. 10. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESS MENT YEAR 2010-11 IS PARTLY ALLOWED. 11. NOW LETS COME TO REVENUES APPEAL FOR ASSESSME NT YEAR 2011-12 IN I.T.A. NO.765/MDS/16. 12. THE FIRST ISSUE ARISES FOR CONSIDERATION IS WIT H REGARD TO CONVERTIBLE FOREIGN EXCHANGE NOT RECEIVED IN INDIA BY THE DUE DATE. 9 I.T.A. NO.1218, 765 & 615/MDS/16 13. WE HAVE HEARD SH. PATHLAVATH PEERYA, THE LD. DE PARTMENTAL REPRESENTATIVE AND SHRI N. VENKATRAMAN, THE LD. SR. COUNSEL FOR THE ASSESSEE. DURING THE COURSE OF HEARING, BOTH T HE LD. D.R. AND LD. SR. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THI S ISSUE IS COVERED AGAINST THE ASSESSEE BY ORDER OF THIS TRIBUNAL FOR ASSESSMENT YEAR 2008-09. IN VIEW OF THE ABOVE, THIS TRIBUNAL DOES NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 14. THE NEXT ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO EXCLUSION OF TELECOM EXPENSES, TRAVELLING, SOFTWARE DEVELOPMENT CHARGES, ETC. FROM TOTAL TURNOVER ALSO. 15. SH. PATHLAVATH PEERYA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSING OFFICE R EXCLUDED THE EXPENDITURE INCURRED BY THE ASSESSEE IN FOREIGN CUR RENCY TOWARDS TELECOM EXPENSES, TRAVELLING, SOFTWARE DEVELOPMENT CHARGES, ETC. IN RESPECT OF OVERSEAS PROJECT FROM THE EXPORT TURNOVE R. HOWEVER, THE SAME WAS NOT EXCLUDED FROM THE TOTAL TURNOVER. REF ERRING TO EXPLANATION 2(IV) TO SECTION 10A OF THE ACT, THE LD . D.R. SUBMITTED THAT EXPORT TURNOVER DOES NOT INCLUDE FREIGHT, TELE COMMUNICATION CHARGES, INSURANCE EXPENSES INCURRED IN FOREIGN EXC HANGE IN 10 I.T.A. NO.1218, 765 & 615/MDS/16 PROVIDING TECHNICAL SERVICE OUTSIDE INDIA, THEREFOR E, ACCORDING TO THE LD. D.R., THE ASSESSING OFFICER HAS RIGHTLY EXCLUDE D THE SAME FROM EXPORT TURNOVER. 16. WE HAVE HEARD SHRI N. VENKATRAMAN, THE LD. SR. COUNSEL FOR THE ASSESSEE ALSO. WHEN THE EXPORT TURNOVER DOES N OT INCLUDE TELECOMMUNICATION CHARGES, TRAVELLING, SOFTWARE DEV ELOPMENT CHARGES FOR PROVIDING TECHNICAL SERVICE OUTSIDE IND IA, THE SAME SHALL ALSO BE EXCLUDED FROM TOTAL TURNOVER. IN OTHER WOR DS, THE EXPORT TURNOVER AND TOTAL TURNOVER SHALL BE OF THE SAME FA CTOR. THE DENOMINATOR AND NUMERATOR SHALL CONSIST OF SAME FAC TOR. ONCE THE FREIGHT, TELECOMMUNICATION CHARGES, TRAVELLING, SOF TWARE DEVELOPMENT CHARGES, ETC. ARE EXCLUDED FROM EXPORT TURNOVER, THE SAME SHALL BE EXCLUDED FROM TOTAL TURNOVER ALSO. I N VIEW OF THE ABOVE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION T HAT THE DISPUTE RESOLUTION PANEL HAS RIGHTLY EXCLUDED THE SAME FROM TOTAL TURNOVER ALSO. HENCE, THIS TRIBUNAL DOES NOT FIND ANY REASO N TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY TH E SAME IS CONFIRMED. 17. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. 11 I.T.A. NO.1218, 765 & 615/MDS/16 18. NOW COMING TO THE ASSESSEES APPEAL IN I.T.A. NO.615/MDS/2016, EVEN THOUGH THE ASSESSEE HAS RAISE D SO MANY ISSUES BEFORE THIS TRIBUNAL, THE LD. SR. COUNSEL FO R THE ASSESSEE CONFINED HIMSELF ONLY TO THE SELECTION OF TESTED PA RTIES. 19. SHRI N. VENKATRAMAN, THE LD. SR. COUNSEL FOR TH E ASSESSEE, SUBMITTED THAT THE ASSESSEE-COMPANY ENGAGED IN PROV IDING SOFTWARE DEVELOPMENT AND RELATED SERVICES. THE ASS ESSEE OWNS SUBSIDIARY COMPANIES IN UK, GERMANY, JAPAN, AUSTRAL IA, SINGAPORE, CANADA, USA, SWITZERLAND, ETC. THE ASSESSEE HAS AL SO PROVIDED SOFTWARE SERVICES TO SOME OF THE OVERSEAS SUBSIDIAR Y COMPANIES DURING THE YEAR UNDER CONSIDERATION. CITIBANK GROU P HAS ALSO BECOME ASSESSEES SUBSIDIARY COMPANY ON ACCOUNT OF MERGER OF CITIBANK WITH POLARIS INDIA. HOWEVER, FROM 07.05.2 010, CITIBANK CEASED TO BE ASSOCIATE ENTERPRISE OF THE ASSESSEE S INCE POLARIS INDIA DROPPED ITS STAKE BELOW 26% THRESHOLD. CITIB ANK PROJECTS ARE GENERALLY AWARDED TO VARIOUS VENDORS BASED ON COMPE TITIVE BIDDING IRRESPECTIVE OF THE ASSOCIATE ENTERPRISE RELATIONSH IP. 20. THE LD. SR. COUNSEL FOR THE ASSESSEE FURTHER SU BMITTED THAT FOR BENCHMARKING INTERNATIONAL TRANSACTION WITH OVE RSEAS SUBSIDIARY, THE ASSESSEE CONSIDERED TRANSACTION NET MARGIN METH OD AS THE 12 I.T.A. NO.1218, 765 & 615/MDS/16 MOST APPROPRIATE METHOD. THE ASSESSEE CONSIDERED I TSELF TO BE A TESTED PARTY. ACCORDING TO THE LD. SR. COUNSEL, TH E ASSESSEE SELECTED 22 COMPARABLE COMPANIES IN THE TRANSFER PR ICING DOCUMENTATION WITH WEIGHTED AVERAGE OF OPERATING CO ST/OPERATING PROFIT AT 13.60%. IN RESPECT OF CITIBANK GROUP, TH E ASSESSEE BENCHMARKED THE INTERNATIONAL TRANSACTION TILL THE TIME IT WAS RELATED TO THE ASSESSEE. DURING THE ASSESSMENT PROCEEDING, ACCORDING TO THE LD. SR. COUNSEL, THE ASSESSEE REVISED ITS SEGME NTATION AND PROVIDED THE DETAILS OF PROFIT OF ALL THE THREE SEG MENTS. IN FACT, IN RESPECT OF SUBSIDIARY SEGMENT, THE ASSESSEE HAS DIS CLOSED ` 41,49,97,806/- AND IN RESPECT OF CITIBANK GROUP SEG MENT, THE ASSESSEE HAS DISCLOSED ` 91,86,73,385/-. IN RESPECT OF THIRD PARTY SEGMENT, THE ASSESSEE HAS DISCLOSED ` 82,44,81,358/-. IN FACT, THE ADDITIONAL PROFIT OF ` 1,96,93,518/- WAS ALLOCATED TO THE SUBSIDIARY SEGMENT. 21. THE LD. SR. COUNSEL FOR THE ASSESSEE FURTHER SU BMITTED THAT THE TRANSFER PRICING OFFICER REJECTED THE BENCHMARK ING DONE BY THE ASSESSEE IN THE TRANSFER PRICING DOCUMENTATION. TH E TPO ACCEPTED TRANSACTION NET MARGIN METHOD AS MOST APPROPRIATE M ETHOD IN BENCHMARKING THE INTERNATIONAL TRANSACTION. HOWEVE R, THE TPO 13 I.T.A. NO.1218, 765 & 615/MDS/16 REJECTED THE SEGMENTATION PROVIDED BY THE ASSESSEE. ACCORDING TO THE LD. SR. COUNSEL, THE TPO HAS ALSO REJECTED THE TRANSFER PRICING ANALYSIS MADE BY THE ASSESSEE AND UNDERTOOK FRESH S EARCH IN EXTERNAL COMPARABLES. IN FACT, THE TPO SELECTED 12 COMPARABLES WITH AVERAGE PROFIT MARGIN OF 18.94%. THE TRANSFER PRICING OFFICER COMPARED THE MARGIN OF SUBSIDIARY SEGMENT AT 3.51% WITH MARGIN OF EXTERNAL COMPARABILITY AT 18.94% AND MADE AN ADJUST MENT OF ` 39,43,73,743/- TO THE SUBSIDIARY SEGMENTS. IN THIS CASE, ACCORDING TO THE LD. SR. COUNSEL, THE OVERSEAS COMPANIES ARE SUBSIDIARY COMPANIES OF THE ASSESSEE, WHICH ARE TO BE CONSIDER ED AS TESTED PARTY. THE LD. SR. COUNSEL FURTHER POINTED OUT THA T THE ASSESSEE BEING AN INDIAN BASED MULTINATIONAL COMPANY, ALL IT S GLOBAL INCOME IS TAXABLE IN INDIA, THEREFORE, THE ASSESSEE MAY NO T GET ANY BENEFIT BY SHIFTING THE PROFIT TO ANY OF ITS SUBSIDIARY COM PANY IN OVERSEAS COUNTRIES. 22. REFERRING TO THE DECISION OF DELHI BENCH OF THI S TRIBUNAL IN RANBAXY LABORATORIES LTD. V. ACIT IN I.T.A. NO.196/ DEL/2013, THE LD. SR. COUNSEL SUBMITTED THAT WHEN THE ASSOCIATE E NTERPRISE ASSUMES LESSER RISK THAN THE ASSESSEE AND BASED ON FINANCIAL ANALYSIS, THE ASSOCIATE ENTERPRISES HAVE LESS COMPL EX OPERATIONS 14 I.T.A. NO.1218, 765 & 615/MDS/16 AND BARE MINIMUM RISK WITHOUT OWNING ANY INTANGIBLE PROPERTY OR UNIQUE ASSET, THE ASSOCIATE ENTERPRISE HAS TO BE SE LECTED AS TESTED PARTY FOR THE PURPOSE OF TRANSFER PRICING ANALYSIS. THEREFORE, ACCORDING TO THE LD. SR. COUNSEL, IN THIS CASE, THE ASSESSEE- COMPANY SHALL NOT BE TAKEN AS TESTED PARTY. ONLY T HE ASSOCIATE ENTERPRISE WHICH HAS LEAST COMPLEX HAS TO BE SELECT ED AS TESTED PARTY. HENCE, WHEN THE ASSOCIATE ENTERPRISE AT OVE RSEAS, WHICH HAS LEAST COMPLEX, IS TO BE TREATED AS TESTED PARTY , THERE SHOULD NOT BE ANY TRANSFER PRICING ADJUSTMENT. THE LD. SR. CO UNSEL FURTHER SUBMITTED THAT EVEN THE OECD GUIDELINES AND THE UNI TED NATIONS TRANSFER PRICING GUIDELINES ALSO PROVIDE THAT LEAST COMPLEX ENTITY SHOULD BE SELECTED AS TESTED PARTY. ONCE THE ASS OCIATE ENTERPRISE IN OVERSEAS COUNTRY BEING THE LEAST COMPLEX PARTY I S SELECTED AS COMPARABLE, ACCORDING TO THE LD. SR. COUNSEL, THERE IS NO NEED FOR ANY ADJUSTMENT FOR DETERMINING THE ARM'S LENGTH PRI CE. 23. ON THE CONTRARY, SH. PATHLAVATH PEERYA, THE LD. DEPARTMENTAL REPRESENTATIVE, SUBMITTED THAT UNDER T HE SCHEME OF INCOME-TAX ACT, THE TRANSACTION OF ASSESSEE WITH AS SOCIATED ENTERPRISE OUTSIDE THE COUNTRY HAS TO BE TESTED AND COMPARED WITH TRANSACTION OF OTHER COMPARABLE COMPANY. REFERRING TO RULE 10B(1) 15 I.T.A. NO.1218, 765 & 615/MDS/16 (E) OF INCOME-TAX RULES, 1962, THE LD. D.R. SUBMIT TED THAT THE NET PROFIT MARGIN REALIZED BY THE ENTERPRISE FROM AN IN TERNATIONAL TRANSACTION ENTERED INTO WITH AN ASSOCIATED ENTERPR ISE NEEDS TO BE COMPUTED IN RELATION TO COST INCURRED OR SALES EFFE CTED OR ASSETS EMPLOYED BY THE ENTERPRISE OR HAVING REGARD TO ANY OTHER RELEVANT BASE. THE ENTERPRISE REFERRED IN RULE 10B(1)(E) AL WAYS REFERS THE ASSESSEE-COMPANY IN INDIA AND IT CANNOT BE EQUATED WITH ASSOCIATED ENTERPRISE OUTSIDE THE COUNTRY. REFERRI NG TO THE DECISION OF MUMBAI BENCH OF THIS TRIBUNAL IN AURIONPRO SOLUT IONS LTD. V. ADDL. CIT (2013) 33 TAXMANN.COM 187, THE LD. D.R. S UBMITTED THAT UNDER THE TRANSFER PRICING REGULATION, THE TESTED P ARTY FOR THE PURPOSE OF DETERMINATION OF ARM'S LENGTH PRICE IS A LWAYS THE ASSESSEE AND NOT THE ASSOCIATED ENTERPRISE. THEREF ORE, ACCORDING TO THE LD. D.R., THE TESTED PARTY CANNOT BE ASSOCIA TED ENTERPRISE OF THE ASSESSEE, WHICH IS OUTSIDE THE JURISDICTION OF OUR COUNTRY. HENCE, ACCORDING TO THE LD. D.R., THE ASSESSING OFF ICER HAS RIGHTLY TAKEN THE ASSESSEE AS A TESTED PARTY. 24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EIT HER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE ONLY ISSUE THAT ARISES FOR CONSIDERATION IS WHETHER THE ASSESS EE-COMPANY HAS 16 I.T.A. NO.1218, 765 & 615/MDS/16 TO BE TAKEN AS TESTED PARTY FOR THE PURPOSE OF DETE RMINATION OF ARM'S LENGTH PRICE OR BY APPLYING THE LEAST COMPLEX THEOR Y, THE ASSOCIATED ENTERPRISE OUTSIDE THE COUNTRY HAS TO BE TAKEN AS T ESTED PARTY? FOR THE PURPOSE OF DETERMINING THE TESTED PARTY, IT NEE DS TO BE EXAMINED THE SCHEME OF TRANSFER PRICING AS PROVIDED IN INDIAN INCOME-TAX ACT. SECTION 92B OF THE ACT DEFINES IN TERNATIONAL TRANSACTION. ASSOCIATED ENTERPRISE IS DEFINED I N SECTION 92A OF THE ACT. RULE 10B OF INCOME-TAX RULES, 1962 PROVID ES MOST APPROPRIATE METHOD FOR DETERMINATION OF ARM'S LENGT H PRICE. RULE 10B(1)(E) PROVIDES METHOD FOR DETERMINATION OF ARM' S LENGTH PRICE BY ADOPTING TRANSACTION NET MARGIN METHOD, WHICH RE ADS AS FOLLOWS:- DETERMINATION OF ARM'S LENGTH PRICE UNDER SECTION 92C 10B. (1) FOR THE PURPOSES OF SUB-SECTION (2) OF SECTI ON 92C, THE ARM'S LENGTH PRICE IN RELATION TO AN INTERNATIO NAL TRANSACTION SHALL BE DETERMINED BY ANY OF THE FOLLOWING METHODS , BEING THE MOST APPROPRIATE METHOD, IN THE FOLLOWING MANNER, N AMELY:- (A) .. .. .. (B) .. .. .. . .. (C) .. .. .. .. .. .. .. . (D) .. .. .. .. .. .. .. . (E) TRANSACTIONAL NET MARGIN METHOD, BY WHICH,- (I) THE NET PROFIT MARGIN REALISED BY THE ENTERPRI SE FROM AN INTERNATIONAL TRANSACTION ENTERED INTO WITH AN ASSOCIATED ENTERPRISE IS COMPUTED IN RELATION TO CO STS 17 I.T.A. NO.1218, 765 & 615/MDS/16 INCURRED OR SALES EFFECTED OR ASSETS EMPLOYED OR TO BE EMPLOYED BY THE ENTERPRISE OR HAVING REGARD TO ANY OTHER RELEVANT BASE ; (II) THE NET PROFIT MARGIN REALISED BY THE ENTERPRI SE OR BY AN UNRELATED ENTERPRISE FROM A COMPARABLE UNCONTROLLED TRANSACTION OR A NUMBER OF SUCH TRANSACTIONS IS COMPUTED HAVING REGARD TO THE SAME BASE ; (III) THE NET PROFIT MARGIN REFERRED TO IN SUB-CLAU SE (II) ARISING IN COMPARABLE UNCONTROLLED TRANSACTIONS IS ADJUSTED TO TAKE INTO ACCOUNT THE DIFFERENCES, IF A NY, BETWEEN THE INTERNATIONAL TRANSACTION AND THE COMPARABLE UNCONTROLLED TRANSACTIONS, OR BETWEEN TH E ENTERPRISES ENTERING INTO SUCH TRANSACTIONS, WHICH COULD MATERIALLY AFFECT THE AMOUNT OF NET PROFIT MARGIN IN THE OPEN MARKET ; (IV) THE NET PROFIT MARGIN REALISED BY THE ENTERPRI SE AND REFERRED TO IN SUB-CLAUSE (I) IS ESTABLISHED TO BE THE SAME AS THE NET PROFIT MARGIN REFERRED TO IN SU B- CLAUSE (III) ; (V) THE NET PROFIT MARGIN THUS ESTABLISHED IS THEN TAKEN INTO ACCOUNT TO ARRIVE AT AN ARM'S LENGTH PRI CE IN RELATION TO THE INTERNATIONAL TRANSACTION. 25. IN THIS CASE, TRANSACTION NET MARGIN METHOD IS THE MOST APPROPRIATE METHOD ADOPTED BOTH BY THE ASSESSEE AND TRANSFER PRICING OFFICER. A BARE READING OF RULE 10B(1)(E) SHOWS THAT THE NET PROFIT MARGIN REALIZED BY AN ENTERPRISE FROM INTERN ATIONAL TRANSACTION ENTERED INTO WITH AN ASSOCIATED ENTERPRISE HAS TO B E COMPUTED IN RELATION TO COST INCURRED OR SALES EFFECTED, ETC. THE MAIN OBJECT IS TO COMPUTE THE NET PROFIT MARGIN REALIZED BY THE ENTER PRISE FROM 18 I.T.A. NO.1218, 765 & 615/MDS/16 INTERNATIONAL TRANSACTION. THE COMPARISON SHALL BE WITH REGARD TO THE TRANSACTION OF UNRELATED ENTERPRISE FROM COMPAR ABLE UNCONTROLLED TRANSACTION. THEREFORE, THE NET PROFI T MARGIN OF THE ENTERPRISE SHALL BE COMPUTED IN THE INTERNATIONAL T RANSACTION BY COMPARING COMPARABLE UNCONTROLLED TRANSACTION. THE WORD ENTERPRISE IS DEFINED IN SECTION 92F (III) OF THE ACT. WE HAVE ALSO GONE THROUGH SECTION 92F (III) OF THE ACT WHICH REA DS AS FOLLOWS:- 92F (III) 'ENTERPRISE' MEANS A PERSON (INCLUDING A PE RMANENT ESTABLISHMENT OF SUCH PERSON) WHO IS, OR HAS BEEN, OR IS PROPOSED TO BE, ENGAGED IN ANY ACTIVITY, RELATING T O THE PRODUCTION, STORAGE, SUPPLY, DISTRIBUTION, ACQUISIT ION OR CONTROL OF ARTICLES OR GOODS, OR KNOW-HOW, PATENTS, COPYRIGHTS, TRADE-MARKS, LICENCES, FRANCHISES OR AN Y OTHER BUSINESS OR COMMERCIAL RIGHTS OF SIMILAR NATURE, OR ANY DATA, DOCUMENTATION, DRAWING OR SPECIFICATION RELATING TO ANY PATENT, INVENTION, MODEL, DESIGN, SECRET FORMULA OR PROCESS, OF WHICH THE OTHER ENTERPRISE IS THE OWNER OR IN RE SPECT OF WHICH THE OTHER ENTERPRISE HAS EXCLUSIVE RIGHTS, OR THE PROVISION OF SERVICES OF ANY KIND, OR IN CARRYING O UT ANY WORK IN PURSUANCE OF A CONTRACT, OR IN INVESTMENT, OR PR OVIDING LOAN OR IN THE BUSINESS OF ACQUIRING, HOLDING, UNDE RWRITING OR DEALING WITH SHARES, DEBENTURES OR OTHER SECURITIES OF ANY OTHER BODY CORPORATE, WHETHER SUCH ACTIVITY OR BUSI NESS IS CARRIED ON, DIRECTLY OR THROUGH ONE OR MORE OF ITS UNITS OR DIVISIONS OR SUBSIDIARIES, OR WHETHER SUCH UNIT OR DIVISION OR SUBSIDIARY IS LOCATED AT THE SAME PLACE WHERE THE E NTERPRISE IS LOCATED OR AT A DIFFERENT PLACE OR PLACES ; 26. A BARE READING OF DEFINITION OF ENTERPRISE AS PROVIDED IN SECTION 92F(III) OF THE ACT SHOWS THAT AN ENTERPRIS E IS NOTHING BUT A 19 I.T.A. NO.1218, 765 & 615/MDS/16 UNIT WHICH CARRIES ON ACTIVITY OR BUSINESS OR PROPO SED TO BE ENGAGED IN ANY ACTIVITY RELATING TO PRODUCTION, STORAGE, CO PYRIGHTS, TRADEMARKS, LICENCES, FRANCHISES OR ANY OTHER COMME RCIAL RIGHTS, ETC. OF WHICH THE OTHER ENTERPRISE IS THE OWNER OR IN RE SPECT OF WHICH THE OTHER ENTERPRISE HAS EXCLUSIVE RIGHTS, ETC. A COMB INED READING OF SECTION 92F(III) OF THE ACT AND RULE 10B(1)(E) OF T HE INCOME-TAX RULES, 1962 SHOWS THAT THE NET PROFIT MARGIN OF THE ENTERPRISE WHICH IS IN INDIA, HAS TO BE DETERMINED BY APPLYING THE T RANSFER PRICING REGULATION. IN FACT, MUMBAI BENCH OF THIS TRIBUNAL IN AURIONPRO SOLUTIONS LTD. (SUPRA) EXAMINED THIS ISSUE AND FOUN D THAT THE TESTED PARTY FOR THE PURPOSE OF DETERMINATION OF ARM'S LEN GTH PRICE IS ALWAYS THE ASSESSEE AND NOT THE ASSOCIATED ENTERPRI SE. IN FACT, THE MUMBAI BENCH AT 8.7 OF ITS ORDER OBSERVED AS FOLLOW S:- 8.7 UNDER THE TRANSFER PRICING REGULATIONS, AN INTERNATIONAL TRANSACTION HAS TO BE COMPARED WITH A N UNCONTROLLED TRANSACTIONS BETWEEN UNRELATED PARTIES WHICH MEANS THAT AN INTERNATIONAL TRANSACTION IS TESTED W ITH THE TRANSACTION, IF THE ASSESSEE COULD HAVE ENTERED INT O A SIMILAR TRANSACTION WITH UNRELATED THIRD PARTY AND THEREBY THE INCOME OF THE ASSESSEE WOULD HAVE EARNED FROM A SIMILAR TRANSACTION WITH AN UNCONTROLLED PARTY. TH US, THE SAME INCOME IS EXPECTED OR DEEMED TO HAVE BEEN EARNE D FROM THE TRANSACTION WITH THE AES. THE UNDERLINING PRINCIPLE OF DETERMINING THE ALP IS BASED ON THE TRANSACTION BETWEEN THE UNRELATED PARTIES. THE INC OME OF THE ASSESSEE SHOULD NOT BE EFFECTED AS REDUCED AND THEREFORE, THE SAME IS COMPARED WITH THE INCOME OR EXPENDITURE AS THE CASE MAY BE EARNED OR INCURRED BY THE 20 I.T.A. NO.1218, 765 & 615/MDS/16 ASSESSEE, IF IT WOULD HAVE BEEN BETWEEN THE ASSESSE E AND THE UNRELATED PARTIES. THEREFORE, TESTED PARTY FOR THE PURPOSE OF DETERMINATION OF ALP IS THE ASSESSEE AND NOT THE AES. 27. WE HAVE ALSO GONE THROUGH THE DECISION OF DELHI BENCH OF THIS TRIBUNAL IN RANBAXY LABORATORIES LTD. (SUPRA). AT PARA 19 OF ITS ORDER, THE DELHI BENCH HAS OBSERVED AS FOLLOWS:- 19. GENERALLY, IN TRANSFER PRICING COMPARABILITY ANA LYSIS, THE TESTED PARTY IS USUALLY THE PARTY PARTICIPATING IN A TRANSACTION FOR WHICH PROFITABILITY MOST RELIABLY C AN BE ASCERTAINED AND FOR WHICH THE RELIABLE DATA OF COMP ARABLES CAN BE FOUND AND THE TESTED PARTY WILL TYPICALLY BE THE PARTY WITH LEAST INTANGIBLES. 28. THE ASSESSEE CONTENDED BEFORE DELHI BENCH OF TH IS TRIBUNAL THAT THE ASSOCIATED ENTERPRISE ASSUMES LESSER RISK AND LESS COMPLEX OPERATION, ETC. AFTER REFERRING TO OECD GU IDELINES WHICH PROVIDES THAT TESTED PARTY NORMALLY SHOULD BE THE L EAST COMPLEX PARTY TO THE CONTROLLED TRANSACTIONS, THE DELHI BEN CH CONCLUDED THAT THE OVERSEAS ASSOCIATED ENTERPRISE BEING THE LEAST COMPLEX PARTY, HAS TO BE ACCEPTED AS TESTED PARTY. IT IS OBVIOUS FROM THE ORDER OF THE DELHI BENCH IN RANBAXY LABORATORIES LTD. (SUPRA ) THAT THE PROVISIONS OF INCOME-TAX ACT AND RULE 10B(1)(E) OF INCOME-TAX RULES, 1962 WERE NOT BROUGHT TO THE NOTICE OF DELHI BENCH OF THIS TRIBUNAL. THEREFORE, THE DELHI BENCH OF THIS TRIBU NAL HAS PROCEEDED ON THE BASIS OF OECD GUIDELINES. 21 I.T.A. NO.1218, 765 & 615/MDS/16 29. FURTHERMORE, THE DETERMINATION OF LEAST COMPLEX PARTY AND FUNCTIONS PERFORMED BY THE ASSOCIATED ENTERPRISE OU TSIDE THE COUNTRY ARE NOT AVAILABLE ON RECORD. IT IS ALSO NO T KNOWN THE AMOUNT OF RISK ASSUMED BY THE ASSOCIATED ENTERPRISE AND IT S CAPITAL EMPLOYED AND THE COMPLEXITY OF THE FUNCTIONS PERFOR MED BY IT. IN THE ABSENCE OF ANY SUCH DOCUMENTATION WITH REGARD T O ASSUMPTION OF RISK, COMPLEX FUNCTIONS, CAPITAL EMPLOYED, ETC., THE DECISION OF DELHI BENCH OF THIS TRIBUNAL CANNOT BE APPLIED IN T HE CASE OF THE ASSESSEE. UNLESS IT IS ESTABLISHED WITH MATERIAL E VIDENCE THAT THE ASSOCIATED ENTERPRISE OUTSIDE THE COUNTRY PERFORMED LESS COMPLEX OPERATION WITH A MINIMUM RISK, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE DECISION OF DELHI BENCH OF THIS TR IBUNAL IS NOT APPLICABLE TO THE FACTS OF THE CASE. 30. WE HAVE ALSO GONE THROUGH THE DECISION OF AHMED ABAD BENCH OF THIS TRIBUNAL IN GENERAL MOTORS INDIA PVT. LTD. V. DCIT IN I.T.A. NO.3096/AHD/2010 DATED 02.08.2013. AFTER RE FERRING TO SOME OF THE DECISIONS OF THIS TRIBUNAL, THE AHMEDABAD BE NCH FOUND THAT IN ORDER TO DETERMINE THE MOST APPROPRIATE METHOD F OR DETERMINING ARM'S LENGTH PRICE, FIRST IT IS NECESSARY TO SELECT TESTED PARTY AND SUCH A SELECTED TESTED PARTY SHOULD BE LEAST COMPLE X AND SHOULD 22 I.T.A. NO.1218, 765 & 615/MDS/16 NOT BE UNIQUE SO THAT PRIMA FACIE CANNOT BE DISTINGUISHED FROM POTENTIAL UNCONTROLLED COMPARABLES. SO, WHAT THE A HMEDABAD BENCH OF THIS TRIBUNAL FOUND IS THAT THE SELECTED P ARTY SHOULD BE THE LEAST COMPLEX PARTY AND SHOULD NOT BE UNIQUE. 31. FOR THE PURPOSE OF SELECTING TESTED PARTY BEING A LEAST COMPLEX PARTY, AS ALREADY OBSERVED, THE FUNCTIONAL RISK ASSUMED BY THE ASSOCIATED ENTERPRISE HAS TO BE ESTABLISHED BY PRODUCING MATERIAL EVIDENCE. IN THIS CASE, THE ASSESSEE MISE RABLY FAILED TO ESTABLISH FUNCTIONAL RISK ASSUMED BY THE ASSOCIATED ENTERPRISE. UNDER THE SCHEME OF INDIAN INCOME-TAX ACT, THE TRAN SACTION OF THE ASSESSEE, MORE PARTICULARLY THE INTERNATIONAL TRANS ACTION OF THE ASSESSEE, HAS TO BE COMPARED WITH THAT OF OTHER COM PANYS TRANSACTIONS IN COMPARABLE UNCONTROLLED TRANSACTION S. THE MAIN OBJECT OF COMPARISON IS TO DETERMINE THE NET PROFIT MARGIN OF THE ASSESSEE-COMPANY. THEREFORE, THE TRANSACTION OF AS SESSEE- COMPANY WITH ASSOCIATED ENTERPRISE OUTSIDE THE COUN TRY HAS TO BE COMPARED WITH THAT OF THE TRANSACTION OF THE COMPAR ABLE UNCONTROLLED TRANSACTION OF OTHER COMPANIES. IN VI EW OF THE ABOVE, IN THE ABSENCE OF ANY MATERIAL ON RECORD WITH REGAR D TO RISK ASSUMED BY THE ASSOCIATED ENTERPRISE, THE ASSESSEE- COMPANY HAS 23 I.T.A. NO.1218, 765 & 615/MDS/16 TO BE TAKEN AS TESTED PARTY FOR THE PURPOSE OF TRAN SFER PRICING ADJUSTMENT. THEREFORE, THIS TRIBUNAL DOES NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 32. EVEN THOUGH THE ASSESSEE HAS RAISED CERTAIN GRO UNDS WITH REGARD TO COMPARISON OF COMPARABLE COMPANIES, NO AR GUMENT WAS ADVANCED AT THE TIME OF HEARING. THEREFORE, THIS T RIBUNAL FINDS THAT THE TPO HAS CORRECTLY SELECTED THE COMPARABLE COMPA NIES. IN VIEW OF THIS, THIS TRIBUNAL DOES NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDINGLY THE SA ME IS CONFIRMED. 33. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESS MENT YEAR 2011-12 IS DISMISSED. 34. TO SUM UP THE RESULT, BOTH THE APPEALS OF THE A SSESSEE FOR THE ASSESSMENT YEAR 2010-11 AND 2011-12 AND THE REV ENUES APPEAL FOR THE ASSESSMENT YEAR 2011-12 ARE DISMISSE D. 24 I.T.A. NO.1218, 765 & 615/MDS/16 ORDER PRONOUNCED ON 18 TH AUGUST, 2017 AT CHENNAI. SD/- SD/- ( !' ) ( . . . ) (SANJAY ARORA) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 18 TH AUGUST, 2017. KRI. 2 .189 :9*1 /COPY TO: 1. )01 /ASSESSEE 2. ASSESSING OFFICER 3. PRINCIPAL CIT, CHENNAI-5, CHENNAI 4. CIT(TP), CHENNAI 5. SECRETARY, DRP-2, BANGALORE. 5. 9; .1 /DR 6. ) < /GF.