THE WALT DISNEY COMPANY (I) P.LTD, MUMBAI V. DCIT 7(3), MUMBAI

ITA 7678/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1100 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: K
• Next Hearing Date: 30-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 27-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B JAYA KUMAR
• Keywords: Depreciation; Transfer pricing; Opportunity of being heard; International transaction; Rule of consistency
• Section: 92C; 143(3); 92D; 92B; 234B; 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH K , MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI , JUDICIAL MEMBER ITA NO. 7678 /MUM/ 2012 : (A.Y : 2008 - 09 ) THE WALT DISNEY COMPANY (INDIA) PRIVATE LIMITED, BUILDING NO. 14, SOLITAIRE CORPORATE PARK, GURU HARGOVINDJI MARG, CHAKALA, ANDHERI, MUMBAI 400 093. PAN : AABCT9014D (APPELLANT) VS. DCIT - 7(3), MUMBAI (RESPONDENT) APPELLANT BY : SHRI NISHANT THAKKAR & MS. JASMIN AMALSADVALA RESPONDENT BY : SHRI B. JAYA KUMAR (CIT - DR) DATE OF HEARING : 26 / 04 /201 7 DATE OF PRONOUNCEMENT : 28 /0 4 /201 7 O R D E R PER G.S. PANNU , AM : THE CAPTIONED APPEAL FILED BY THE ASSESSEE IS ARISING FROM ORDER DATED 29.10.2012 PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S 144C(5) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) GIVING EFFECT TO THE DIRECTIONS OF DISPUTE RESOLUTION PANEL - II, MUMBAI (DRP) DATED 31.07.2012. 2 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 2. IN ITS APPEAL, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - TRANSFER PRICING 1. THE LEARNED AO ERRED IN MAKING A REFERENCE OF THE APPELLANT'S CASE TO THE LEARNED TRANSFER PRICING OFFICER ('TPO') AND THEN MAKING A TRANSFER PRICING ADJUSTMENT OF RS 34,185,321 UNDER SECTION 92C(4) OF THE ACT TO THE TOTAL INCOME OF THE APPELLANT FOR AY 20 08 - 09. 2. THE LEARNED TPO / AO ERRED IN NOT ACCEPTING THE ECONOMIC ANALYSIS UNDERTAKEN BY THE APPELLANT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT READ WITH THE INCOME - TAX RULES, 1962 (RULES) AND DETERMINING THE ARM'S LENGTH OPERATING MARGIN WITH RES PECT TO THE INTERNATIONAL TRANSACTION OF SUPPORT AND SUPPLY OF CONTENT TO BE 22.55% AND FOR THE INTERNATIONAL TRANSACTION OF PROVISION OF GENERAL MANAGEMENT SUPPORT SERVICES TO BE 13.26%. 3. THE LEARNED TPO / AO ERRED IN REJECTING THE BENCHMARKING ANALYS IS UNDERTAKEN BY THE APPELLANT FOR ITS INTERNATIONAL TRANSACTIONS, MORE SPECIFICALLY WITH RESPECT TO THE INTERNATIONAL TRANSACTIONS OF SUPPLY AND SUPPORT OF CONTENT AND PROVISION OF GENERAL MANAGEMENT SUPPORT SERVICES IN ITS TRANSFER PRICING DOCUMENTATION, MAINTAINED UNDER SECTION 92D OF THE ACT READ WITH RULE 10D(4) OF RULES AND DETERMINING THE ARM'S LENGTH OPERATING MARGIN FOR THESE TRANSACTIONS USING ONLY THE UPDATED FINANCIAL YEAR 2007 - 08 OPERATING MARGINS OF THE COMPARABLE COMPANIES, AS AVAILABLE AT TH E TIME OF THE ASSESSMENT. 4. THE LEARNED TPO / AO ERRED IN REJECTING LOSS MAKING COMPARABLES WHILE DETERMINING THE ARM'S LENGTH OPERATING MARGIN FOR THE INTERNATIONAL TRANSACTION OF SUPPLY AND SUPPORT OF CONTENT. 5. WITHOUT PREJUDICE TO THE GROUND NUMB ER 4, THE LEARNED TPO / AO ERRED IN NOT EXCLUDING COMPANIES EARNING SUPER NORMAL PROFITS, WHERE LOSS MAKING COMPANIES ARE EXCLUDED, WHILE DETERMINING THE ARM'S LENGTH OPERATING MARGIN FOR THE INTERNATIONAL TRANSACTION OF SUPPLY AND SUPPORT OF CONTENT. 3 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 6. THE LEARNED TPO / AO ERRED IN COMPUTING THE OPERATING MARGIN OF CREATIVE EYE LIMITED (COMPARABLE COMPANY) WHILE DETERMINING THE ARM'S LENGTH OPERATING MARGIN FOR THE INTERNATIONAL TRANSACTION OF SUPPORT AND SUPPLY OF CONTENT. 7. THE LEARNED TPO / AO ERR ED IN CONSIDERING THE 'MEDIA DIVISION' AS THE COMPARABLE SEGMENT INSTEAD OF 'HEALTH CARE DIVISION' FOR IN HOUSE PRODUCTIONS LIMITED WHILE DETERMINING THE ARM'S LENGTH OPERATING MARGIN FOR THE INTERNATIONAL TRANSACTIONS OF SUPPLY AND SUPPORT OF CONTENT. 8 . THE LEARNED TPO / AO ERRED IN NOT ALLOWING THE APPELLANT THE BENEFIT OF THE WORKING CAPITAL ADJUSTMENT WITH RELATION TO THE INTERNATIONAL TRANSACTIONS OF SUPPLY AND SUPPORT OF CONTENT AND PROVISION OF GENERAL MANAGEMENT SUPPORT SERVICES WHICH IS REQUIRED TO BE UNDERTAKEN IN ITS CASE TO ACCOUNT FOR THE DIFFERENCE IN WORKING CAPITAL LEVELS BETWEEN THE APPELLANT AND THE COMPARABLE COMPANIES. 9. THE LEARNED TPO / AO ERRED IN NOT ALLOWING THE APPELLANT THE BENEFIT OF THE RISK ADJUSTMENT WITH RELATION TO THE INTERNATIONAL TRANSACTIONS OF SUPPLY AND SUPPORT OF CONTENT AND PROVISION OF GENERAL MANAGEMENT SUPPORT SERVICES, TO ACCOUNT FOR THE DIFFERENCE BETWEEN THE RISKS ASSUMED BY THE APPELLANT AND THOSE ASSUMED BY THE COMPARABLE COMPANIES. 10. THE LEARNED TPO / AO ERRED BY NOT CONSIDERING THAT ADJUSTMENT TO THE ARM'S LENGTH PRICE, IF ANY, SHOULD BE LIMITED TO THE LOWER END OF THE 5 PERCENT RANGE AS THE APPELLANT HAS THE RIGHT TO EXERCISE THIS OPTION UNDER THE PROVISO TO SECTION 92C (2) OF THE ACT. OTHERS 11. THE LEARNED AO HAS ERRED IN MAKING AN ADDITION OF RS 77,13,648 ON ACCOUNT OF NON-RECONCILIATION OF ITS DETAILS. 12. WITHOUT PREJUDICE TO THE GROUND NUMBER 11 ABOVE, THE INFORMATION PROVIDED BY THE LEARNED AO WAS INSUFFICIENT FOR THE APPELLANT TO UNDERTAKE A RECONCILIATION OF THE ITS DETAILS. 4 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 13. THE LEARNED AO HAS ERRED IN GRANTING SHORT CREDIT OF TDS AMOUNTING TO RS 2,60,19,233. 14. THE LEARNED AO HAS ERRED IN LEVYING INTEREST UNDER SECTION 234B OF THE ACT AMOUNTING TO RS 35,59,140. 15. THE LEARNED AO HAS ERRED IN LEVYING INTEREST UNDER SECTION 234C OF THE ACT AMOUNTING TO RS 3,74,452. 3. THE APPELLANT BEFORE U S IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 AND IS, INTER - ALIA , ENGAGED IN THE BUSINESS OF TELEVISION BROADCASTING AND FOR THE ASSESSMENT YEAR UNDER CONSIDERATION IT FILED A RETURN OF INCOME DECLARING NIL INCOME AS PER THE N ORMAL PROVISIONS OF THE ACT WHEREAS THE TAX LIABILITY WAS DETERMINED IN TERMS OF SEC. 115JB OF THE ACT. THE ASSESSMENT HAS BEEN FINALISED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 144C(5) OF THE ACT ON 29.10.2012 IN CONFORMITY WITH THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL (DRP) WHEREBY THE TOTAL INCOME HAS BEEN ASSESSED AT NIL UNDER THE NORMAL PROVISIONS OF THE ACT WHEREAS THE INCOME RETURNED U/S 115JB OF THE ACT HAS BEEN VARIED. BE THAT AS IT MAY, EVEN THE ASSESSMENT MADE UNDER THE NORMAL PROVISIO NS OF THE ACT HAS RESULTED IN SCALING DOWN OF THE LOSS RETURNED BY THE ASSESSEE ON ACCOUNT OF CERTAIN ADDITIONS, PRIMARILY ON ACCOUNT OF THE TRANSFER PRICING ADJUSTMENT OF RS.3,41,85,321/ - . THE APPELLANT - COMPANY WAS FOUND TO HAVE ENTERED INTO CERTAIN INTE RNATIONAL TRANSACTIONS WITHIN THE MEANING OF SEC. 92B OF THE ACT WITH ITS ASSOCIATED ENTERPRISES AND, THEREFORE, THE ASSESSING OFFICER HAD REFERRED THE MATTER TO THE TRANSFER PRICING OFFICER (TPO) FOR DETERMINATION OF THE ARMS LENGTH PRICE OF THE INTERNAT IONAL TRANSACTIONS. THE TPO VIDE ORDER DATED 27.10.2010 PASSED U/S 92CA(3) 5 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 OF THE ACT , AFTER CONSIDERING THE MATERIAL AND SUBMISSIONS PUT FORTH BY THE ASSESSEE , HAS DIFFERED WITH THE DETERMINATION OF ARMS LENGTH PRICE IN RELATION TO TWO SEGMENTS OF THE I NTERNATIONAL TRANSACTIONS ENTERED WITH THE ASSOCIATED ENTERPRISES. THE TRANSFER PRICING ADJUSTMENT WORKED OUT BY THE TPO FORMED THE BASIS OF THE ASSESSING OFFICER TO PASS A DRAFT ASSESSMENT ORDER DATED 26.12.2011 AGAINST WHICH THE ASSESSEE CARRIED ITS OBJ ECTIONS BEFORE THE DRP. THE DRP VIDE ITS ORDER DATED 31.7.2012 HAS DEALT WITH THE OBJECTIONS OF THE ASSESSEE AND THE ASSESSING OFFICER HAS GIVEN EFFECT TO THE SAID DIRECTIONS IN THE FINAL ASSESSMENT ORDER, AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE US AS PER THE AFORESTATED GROUNDS OF APPEAL. 4. AS A PERUSAL OF THE GROUNDS OF APPEAL REVEAL, THE SUBSTANTIVE DISPUTE IS WITH REGARD TO THE ADJUSTMENT MADE TO THE TOTAL INCOME IN THE PROCESS OF DETERMINING THE ARMS LENGTH PRICE OF THE INTERNATIONAL TRANSACTION S. IN THIS BACKGROUND, WE WILL NOW BRIEFLY TOUCH UPON THE RELEVANT FACTS IN THIS REGARD. THE APPELLANT COMPANY BELONGS TO THE DISNEY GROUP. THE PRINCIPAL ACTIVIT Y OF ASSESSEE IS TO PROVIDE SUPPORT TO B UENA VISTA INTERNATIONAL , INC . (IN SHORT B V I ) FOR PRODUCTION AND A CQUISITION OF TELEVISION CONTENT/ PROGRAMME. IT IS ALSO PRODUCING PROMOS IN RESPECT OF PROGRAMMES/CONTENT TO BE AIRED ON DISNEY CHANNELS. APART THEREFROM, IT IS ALSO ENGAGED IN SALE OF ADVERTISING AND SPONSORSHIP AIR - TIME ON THE DISNEY CHA NNELS IN THE INDIAN TERRITORY TO ADVERTISING AGENCIES, ADVERTISERS AND SPONSORS. IT ALSO UNDERTAKES DISTRIBUTION OF THE DISNEY CHANNEL AND THE TOON DISNEY CHANNEL IN THE TERRITORIES OF INDIA, SRI LANKA, NEPAL AND BHUTAN. THE ASSESSEE ALSO ACQUIR ES NON - EX CLUSIVE RIGHT TO USE DISNEY CHARACTERS/LOGOS FOR THE 6 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 AFORESAID TERRITORIES FROM DISNEY ENTERPRISES INC. (IN SHORT DEI) AND SUB - LICENCE S THEM TO VARIOUS THIRD PART Y MANUFACTURERS . THE TPO , IN PARA 6 OF HIS ORDER , HAS ENUMERATED THE VARIOUS INTERNATIONAL TRANSACTIONS ENTERED BY THE ASSESSEE WITH ITS ASSOCIATED ENTERPRISES IN CARRYING OUT THE AFORESAID ACTIVITIES. S INCE THE DISPUTE BEFORE US RELATES TO THE TRANSACTIONS ENTERED IN TWO SEGMENTS, NAMELY C ONTENT SUPPLY AND SUPPORT SEGMENT , AND P ROVISION OF G EN ERAL MANAGEMENT SERVICES SEGMENT, OUR FURTHER DISCUSSION IS CONFINED TO THE FACTS RELATING TO THE AFORESAID SEGMENTS ONLY . 5 . INSOFAR AS THE C ONTENT SUPPLY AND S UPPORT SEGMENT IS CONCERNED, THE SERVICES RENDERED BY THE ASSESSEE, INTER - ALIA , INCLUDE SUPPOR T FOR PRODUCTION OF TV PROGRAMME CONTENT FOR BVI, WHICH IS AIRED ON VARIOUS DISNEY CHANNELS. THE SPECIFIC SERVICES RENDERED BY THE ASSESSEE IN THIS SEGMENT HAVE BEEN NOTED BY THE TPO, WHICH ARE TO PROVID E SERVICES FOR PROGRAMME ACQUISITION, PROGRAMME SCHEDULING AND QUALITY CONTROL WITH RESPECT TO CONTENT AIRED ON THE CHANNELS. THE ASSESSEE IS COMPENSATED AT COST + MARK - UP BASIS FOR THESE SERVICES AND THE MARK - UP OVER COST IS STATED AT 10%. IN ITS T RANSFE R P RICING S TUDY, ASSESSEE HAD SELECTED THE TRANSACTION AL NET MARGIN (TNM) METHOD AS THE MOST APPROPRIATE METHOD TO BENCHMARK THE SAID INTERNATIONAL TRANSACTIONS AND THE PROFIT LEVEL INDICATOR (PLI) WAS CHARACTERISED AS O PERATING PROFIT/ O PERATING COST. THO UGH, IN THE TRANSFER PRICING STUDY, ASSESSEE HAD USED THE AVERAGE OF THE MULTIPLE YEAR S DATA OF THE COMPARABLES TO CALCULATE THE AVERAGE MARGINS, BUT IN THE COURSE OF THE PROCEEDINGS BEFORE THE TPO, ASSESSEE HAD FURNISHED THE REVISED MARGINS BASED ON THE SINGLE YEARS DATA CORRESPONDING TO THE FINANCIAL YEAR UNDER CONSIDERATION, AND ON 7 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 THIS ASPECT THERE IS NO DISPUTE. THE AVERAGE MARGIN OF THE COMPARABLE CONCERNS SELECTED BY THE ASSESSEE CAME TO 10.92%, WHICH COMPARED FAVOURABLY WITH THE STATED MARGIN OF ASSESSEE AT 11.75% , AND O N THAT BASIS, IT WAS ASSERT ED BY THE ASSESSEE THAT THE STATED VALUE OF THE INTERNATIONAL TRANSACTIONS IN THE C ONTENT SUPPLY AND S UPPORT SEGMENT WAS AT AN ARMS LENGTH PRICE AND, THEREFORE, IT DID NOT REQUIRE ANY FURTHER ADJUSTMENT. THE TPO HAS ACCEPTED THE STAND OF THE ASSESSEE FOR BENCHMARKING THE INTERNATIONAL TRANSACTIONS OF C ONTENT SUPPLY AND S UPPORT SEGMENT AS PER THE TNM METHOD AS ALSO THE FORMULA FOR DETERMINATION OF THE PLI. HOWEVER, T HE TPO HAS DIFFERED WITH THE ASSESSEE ON SELECTION OF COMPARABLES AND SINCE THE DISPUTE BEFORE US PRIMARILY REVOLVES AROUND THE EXCLUSION OR INCLUSION OF CERTAIN CONCERNS IN THE FINAL SET OF COMPARABLES, WE MAY TABULATE HEREINAFTER THE FINAL SET OF COMPARABLES SELECTED BY THE TPO WHICH HAVE FO RMED THE BASIS FOR THE IMPUGNED ADDITION. THE DRP HAS RETAINED THE SAME SET OF COMPARABLES BUT HAS REVISED THE MARGINS IN RESPECT OF TWO COMPARABLES. BE THAT AS IT MAY, THE FOLLOWING TABULATION SHOWS THE FINAL SET OF COMPARABLES, WHICH HAS RESULTED IN TH E ADDITION OF RS.2,77,08,03 8 / - : - SR. NO. NAME OF COMPARABLE UPDATED MARGIN (FY 07 - 08)(%) 1 BAG FILMS & MEDIA LTD. 6.45 2 BALAJI TELEFILMS LTD. 51.61 3 CINEVISTAAS LTD. 21.72 4 CREATIVE EYE LTD. 7.33 5 RADAAN MEDIA WORKS (I) LTD. 3.64 6 SRI ADHIKAR I BROTHERS TELEVISION NETWORKS LTD. 15.75 7 ACCESS INDIA ADVISORS LTD. 45.97 8 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 8 IDC INDIA LTD. 14.87 9 INDIA TOURISM DEVELOPMENT CORPORATION LTD. (SEL ARMS MISC INCOME SEG) 9.67% 10 IN HOUSE PRODUCTIONS LTD. (MEDIA - SE ) 48.56% ARITHMETIC MEAN ARMS LENGTH MARGIN 22.55 ASSESSEES PLI 11.75% 6 . ON THE AFORESAID BASIS, THE ASSESSING OFFICER NOTED THE ARITHMETIC MEAN OF THE COMPARABLES AT 22.55 % AND AFTER COMPARING IT WITH THE STATED MARGIN OF ASSESSEE OF 11.75%, HE HAS WORKED OUT AN ADJUSTMENT OF RS. 2, 77 , 08,038 / - , WHICH ACCORDING TO HIM WAS REQUIRED TO BE MADE TO THE STATED VALUE OF TRANSACTIONS IN ORDER TO BRING THEM TO THE LEVEL OF ARMS LENGTH PRICE. WE FIND THAT IN THE FINAL ASSESSMENT ORDER PASSED AFTER CONSIDERING THE DIRECTIONS OF THE DRP, THE ADJUSTMENT HAS BEEN WORKED OUT AT RS.2,77,08,038/ - , WHEREAS THE TPO HAD WORKED OUT THE ADJUSTMENT OF RS.2,07,08,038/ - . THE DIFFERENCE IN THE TWO FIGURES IS ON ACCOUNT OF REVISED MARGIN OF TWO OF THE TEN COMPARABLES AND, IN ANY CASE, THE SAME IS NOT THE S UBJECT MATTER OF DISPUTE BEFORE US, THEREFORE, WE PROCEED FURTHER ON THE PREMISE THAT THE ADJUSTMENT OF RS.2,77,08,038/ - HAS BEEN MADE ON THIS COUNT. 7 . IN THIS BACKGROUND, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE HAD MADE TWO POINTS WITH REGARD TO THE CONCERNS INCLUDED IN THE FINAL SET OF COMPARABLES. THE FIRST GRIEVANCE IS AGAINST THE STAND OF THE TPO IN EXCLUDING TWENTY TWENTY TELEVISION COMPANY LTD. FROM THE FINAL SET OF COMPARABLES. THE LEARNED REPRESENTATIVE HAD REFERRED TO POINT (X) OF PART A O F PARA 7 OF THE ORDER OF TPO , TO POINT OUT THAT THE SAID CONCERN HAS BEEN EXCLUDED BY THE TPO ON THE GROUND THAT IT HAD INCURRED AN OPERATING LOSS. IT HAS BEEN CANVASSED THAT THE ACTION OF THE TPO TO 9 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 EXCLUDE THE SAID CONCERN IS NOT WELL - FOUNDED INASMUCH A S INCURRENCE OF LOSS IS A NORMAL BUSINESS INCIDENCE AND, IN ANY CASE, THE CONCERN COULD HAVE BEEN EXCLUDED ONLY IF IT WAS A PERSISTENT LOSS - MAKER. IT HAS BEEN ASSERTED BEFORE US THAT THE SAID CONCERN IS NOT A PERSISTENT LOSS - MAKER AND FOR THAT MATTER, REFERENCE WAS INVITED TO ANNEXURE - A OF THE WRITTEN SUBMISSIONS WHEREIN THE MARGINS OF THE SAID CONCERN HAVE BEEN TABULATED FOR THREE YEARS ENDING ON 31.3.2006, 31.3.2007 AND 31.3.2008. ON THAT BASIS, IT IS SOUGHT TO BE POINTED O UT THAT THE SAID CONCERN HAD A POSITIVE OPERATING MARGIN OF 10.17% FOR YEAR ENDING 31.3.200 6 AND LOSS OF 30.28% AND 30.83% FOR THE YEAR ENDING 31.3.2007 AND 31.3.2008 RESPECTIVELY. IT WAS, THEREFORE, CONTENDED THAT THE SAID CONCERN HAD MADE PROFIT IN ONE OF THE LAST THREE YEARS AND, THEREFORE, IT COULD NOT BE SAID TO BE A PERSISTENT LOSS MAKER. IN SUPPORT OF THE SAID PROPOSITION, RELIANCE HAS BEEN PLACED ON THE FOLLOWING DECISIONS : - I) BOBST INDIA (P.) LTD. VS DCIT, [2015] 63 TAXMANN.COM 339 ( PUNE - TRIB .) II) GOLDMAN SACHS (INDIA) SECURITIES PVT. LTD. , ITA NO. 7724/ MUM/ 2011 DATED 23.1.2013 8 . ON THE OTHER HAND, THE LD. CIT - DR APPEARING FOR THE REVENUE HAS PRIMARILY REITERATED THE DISCUSSION BY THE TPO IN THE ORDER TO SUPPORT THE CASE OF REVENUE, WHICH WE HAVE ALREADY NOTED IN THE EARLIER PARAS AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 9 . HAVING CONSIDERED THE RIVAL STANDS ON THIS ISSUE, WE FIND THAT THE TPO SOUGHT TO EXCLUDE TWENTY TWENTY TELEVISION COMPANY FROM THE 10 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 FINAL SET OF COMPARABLES NO TICING THAT IT HAS MADE A LOSS IN THIS YEAR ; OF COURSE, THE FUNCTIONAL COMPARABILITY OF THE SAID CONCERN IS NOT IN DISPUTE. THE POINT PUT ACROSS BY THE APPELLANT IS THAT A CONCERN CAN BE EXCLUDED FROM THE COMPARABILITY ANALYSIS ON ACCOUNT OF LOSS ONLY IF THE CONCERN INCURS LOSS PERSISTENTLY OVER A N EXTENDED PERIOD OF TIME. IN OUR CONSIDERED OPINION, THE PROPOSITION SOUGHT TO BE CANVASSED BY THE APPELLANT IS QUITE ACCEPTABLE AND, IN FACT, THE DRP IN PARA 8.1.1 OF ITS ORDER HAS ALSO NOTED THAT IT IS AN ACC EPTABLE PRACTICE TO EXCLUDE PERSISTENT LOSS MAKING COMPANIES WHILE BENCHMARKING A TRANSACTION . THEREFORE, WHAT IS REQUIRED TO BE ESTABLISHED IS AS TO WHETHER TWENTY TWENTY TELEVISION COMPANY IS A PERSISTENT LOSS MAKING CONCERN OR NOT . IN THIS CONTEXT, THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF BOBST INDIA (P.) LTD. , [2015] 63 TAXMANN.COM 339 (PUNE - TRIB) DECIDED THIS ASPECT BY EXAMINING THE FINANCIAL POSITION OF THE PARTICULAR CONCERN OVER THE LAST THREE YEARS. THE BENCH NOTED THAT IN ONE OF THE LAST THREE YEARS, THE CONCERN WAS IN PROFIT S AND, THEREFORE, IN THIS BACKGROUND IT INFERRED THAT SUCH A CONCERN COULD NOT BE CONSIDERED AS A PERSISTENT LOSS - MAKER. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE HAD DRAWN OUR ATTENTION TO A TABULATION PREPARED FOR THREE YEARS ENDING 31.3.2006, 31.3.2007 AND 31.3.2008 , WHICH SHOWS THAT IN THE YEAR ENDING 31.3.2006 , THE SAID CONCERN HAD MADE A PROFIT WHILE THERE WAS LOSS IN THE OTHER TWO YEARS. IN THIS BACKGROUND, THEREFORE, IT COULD NOT BE SAID THAT AS ON THE YEAR ENDING 31.3.2008, WHICH CORRESPONDS TO THE ASSESSMENT YEAR BEFORE US, SUCH A CONCERN WAS A PERSISTENT LOSS - MAKER SO AS TO EXCLUDE IT FROM THE FINAL SET OF COMPARABLES. THUS , FOLLOWING THE RATIO OF THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF BOBST INDIA (P.) LTD. (SUPRA) , WE DEEM IT FIT AND PROPER TO DIRECT THE 11 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 TPO/ASSESSING OFFICER TO INCLUDE THE SAID CONCERN IN THE FINAL SET OF COMPARABLES. 11. THE ONLY OTHER POINT RAISED BEFORE US IS WITH REGARD TO CORRECTION OF MARGIN OF ONE OF THE CONCERNS INCLUDED IN THE FINAL SET OF COMPARABLES, I.E., CREATIVE EYE LTD. AS THE TABULATION ENUMERATED IN THE EARLIER PART OF THE ORDER WOULD SHOW, THE MARGIN OF THE SAID CONCERN HAS BEEN ADOPTED AT 7.33% , WHEREAS T HE STAND OF TH E APPELLANT IS THAT THE CORRECT MARGIN OF THE SAID CONCERN IS 0.47% AND THAT THE LOWER AUTHORITIES HAVE ERRED IN CALCULATING THE MARGIN AT 7.3 3 %. 12 . IN THIS BACKGROUND, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO PAGE 493 OF THE PAPER BOOK TO POINT OUT THAT THERE WAS AN ERROR ON THE PART OF THE TPO IN DETERMINING THE MARGIN AT 7.33% INASMUCH AS CERTAIN ITEMS OF THE PROFIT & LOSS ACCOUNT, NA MELY DEPRECIATION RS.1,96,73,699/ - AND P ROVISION OF FBT RS.3,18,168/ - HAVE BEEN EXCLUDED FOR THE PURPOSE OF COMPUTING THE T OTAL O PERATING E XPENSES. IT IS EMPHASISED , WITH REFERENCE TO A TABULATION PLACED AT PAGE 493 OF THE PAPER BOOK THAT THE CALCULAT ION OF MARGIN IN THE CASE OF OTHER CONCERNS SELECTED AS COMPARABLES HAS BEEN DONE BY CONSIDERING THE AFORESAID TWO ITEMS AS A PART OF TOTAL OPERATING EXPENSE S . IT WAS, THEREFORE, CONTENDED THAT IF THE AFORESAID TWO ITEMS ARE CONSIDERED AS A PART OF TOTAL OPERATING EXPENSES , AS DONE IN THE CASE OF OTHER CONCERNS APPEARING IN THE FINAL SET OF COMPARABLES, THE CORRECT MARGIN WOULD COME TO 0.47%. 12 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 13. ON THE OTHER HAND, THE LD. CIT - DR APPEARING FOR THE REVENUE REFERRED TO THE DISCUSSION MADE BY THE TPO IN PO INT (VIII) OF PART A OF PARA 7 OF THE ORDER WHEREBY IT IS SPECIFICALLY NOTED THAT THE MARGIN OF CREATIVE EYE LTD. COMES TO 7.33% , AS AGAINST 0.47% CANVASSED BY THE ASSESSEE . ON THIS BASIS, THE DRP ALSO REJECTED THE CLAIM OF ASSESSEE THAT THE CORRECT MARGI N OF THE SAID CONCERN IS 0.47%. 14. WE HAVE CONSIDERED THE RIVAL STANDS AND FIND THAT THERE IS AN APPARENT INCONSISTENCY ON THE PART OF THE TPO IN CALCULATING THE MARGIN OF CREATIVE EYE LTD. VIS - A - VIS THE OTHER CONCERNS SELECTED AS COMPARABLES . AS PER TH E TABULATION FURNISHED BY THE ASSESSEE AS ANNEXURE B TO THE WRITTEN SUBMISSIONS IT IS CLEAR THAT IN THE CASE OF OTHER COMPARABLE CONCERNS, THE TOTAL OPERATING EXPENSES HAVE BEEN CALCULATED AFTER TAKING INTO ACCOUNT THE D EPRECIATION AND P ROVISION OF FBT ; AND, THAT IT IS ONLY IN THE CASE OF CREATIVE EYE LTD. THE SAME HAVE BEEN EXCLUDED. QUITE CLEARLY, THE DETERMINATION OF MARGIN IN THE CASE OF ALL THE COMPARABLE CONCERNS NEEDS TO BE UNIFORMLY DONE , SO AS TO IMPART RATIONALITY TO THE COMPARABILITY ANALYSIS. HAVING REGARD TO THE MATERIAL ON RECORD, WE ARE SATISFIED THAT THE CORRECT MARGIN OF CREATIVE EYE LTD. IS TO BE TAKEN AS 0.47% AND THAT THE DRP HAS UNJUSTIFIABLY REJECTED THE PLEA OF THE ASSESSEE. AS A CONSEQUENCE, WE DIRECT THE TPO/ASSESSING OFFICER TO CONSIDER THE MARGIN OF CREATIVE EYE LTD. AT 0.47% , AND THEREAFTER REWORK THE DETERMINATION OF ARMS LENGTH PRICE . 15. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT IF THE PLEA FOR INCLUSION OF TWENTY TWENTY TELEVISION COMPANY LTD. AND THE CORRECTED MARGIN OF CREATIVE EYE LTD. 13 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 IS ACCEPTED, THEN, THE MARGIN OF THE RESULTANT COMPARABLES WOULD FALL WITHIN THE + 5% OF THE STATED MARGIN OF THE ASSESSEE AND THE NECESSITY OF MAKING ANY ADJUSTMENT WOULD BE OBVIATED IN TERMS OF SEC. 92C(2) OF THE ACT . SINCE WE HAVE ACCEPTED THE AFORESAID TWO PLEAS OF THE ASSESSEE, THEREFORE, THE OTHER ISSUES RAISED IN THE GROUNDS OF APPEAL WITH REGARD TO THE C ONTENT AND S UPPORT SEGMENT ARE RENDERED ACADEMIC AND ARE NOT BEING ADJUDICATED FOR THE PRESENT . 16. IN THE RESULT, INSOFAR AS THE C ONTENT AND S UPPORT SEGMENT IS CONCERNED, THE TPO/ASSESSING OFFICER IS DIRECTED TO RE - WORK THE ARMS LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS IN ACCORDANCE WITH THE AFORESAID DIRECTIONS. 17. NOW, WE MAY TAKE UP THE DISPUTE ARISING FROM BENCHMARKING OF INTERNATIONAL TRANSACTIONS IN THE GENERAL MANAGEMENT SUPPORT SERVICES SEGMENT. 18. IN THIS SEGMENT, ASSESSEE HAS RENDERED GENERAL MANAGEMENT & SUPPORT SERVICES IN THE NATURE OF SECRETARIAL ASSISTANCE, HANDLING DOCUMENTS, ETC. TO BVI, WALT DISNEY INTERNET GROUP, DISNEY WORLDWI D E SERVICES AND THE WALT DISNEY C OMPANY , I.E. TO THE ASSOCIATED CONCERNS OF THE WALT DISNEY GROUP. FOR THE SERVICES SO RE NDERED IN THIS SEGMENT, ASSESSEE IS BEING COMPENSATED AT COST + MARK - UP BASIS, SUCH MARK - UP BEING 5%. DURING THE YEAR UNDER CONSIDERATION, ASSESSEE RECEIVED A CONSIDERATION OF RS. 8, 2 3,38,337 / - ON ACCOUNT OF PROVISION OF G ENERAL MANAGEMENT AND SUPPORT SERV ICES TO ITS ASSOCIATED ENTERPRISES. IN ITS TRANSFER PRICING STUDY, ASSESSEE USED MULTIPLE YEAR S DATA OF THE COMPARABLE CONCERNS WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE THE 14 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 TPO, IT RE - DETERMINED THE MARGIN OF THE COMPARABLES BASED ON SINGLE YEARS DATA OF THE FINANCIAL YEAR RELEVANT TO THE YEAR UNDER CONSIDERATION ; AND, THIS ASPECT IS NOT IN DISPUTE . THE TPO HAS NOTED THAT OUT OF 13 CONCERNS SELECTED BY THE ASSESSEE AS COMPARABLES, IN SOME OF THE CASES THE DATA FOR THE RELEVANT FINANCIAL YEAR WAS N OT AVAILABLE AND, THEREFORE, HE EXCLUDED THE SAME. ADDITIONALLY, THE TPO ALSO EXCLUDED EDUCATIONAL CONSULTANTS (INDIA) LTD. (SEG) FROM THE FINAL SET OF COMPARABLES ON THE GROUND THAT THE SAID CONCERN IS FUNCTIONALLY DISTINGUISHABLE FROM THE ASSESSEE. AS A CONSEQUENCE, THE TPO SELECTED 6 CONCERNS IN THE FINAL SET OF COMPARABLES WHICH WERE OTHERWISE PART OF THE 13 CONCERNS CONSIDERED AS COMPARABLES BY THE ASSESSEE. THE ARITHMETIC MEAN OF THE 6 CONCERNS WAS DETERMINED BY THE TPO AT 16.74% AND AFTER COMPARIN G WITH THE ASSESSEES STATED MARGIN OF 5%, ADJUSTMENT OF RS.92,06,210/ - WAS WORKED OUT IN ORDER TO CALCULATE THE ARMS LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS. AFTER THE DIRECTIONS OF THE DRP, THE SAME SET OF 6 COMPARABLES HAVE BEEN RETAINED EXCEPT ING THAT THE MARGIN IN THE CASE OF TWO OF THE COMPARABLES HAVE BEEN REVISED, WHICH HAS RESULTED IN AVERAGE MARGIN OF 13.26% OF THE COMPARABLES. FOLLOWING TABULATION SHOWS THE FINAL SET OF COMPARABLES TAKEN BY THE ASSESSING OFFICER BASED ON THE DIRECTIONS OF THE DRP, AND WHICH HAS FORMED THE BASIS FOR THE ADDITION OF RS.64,77,283/ - , WHICH IS IN DISPUTE BEFORE US. NOTABLY, THE DIFFERENCE IN THE FIGURE OF ADJUSTMENT WORKED OUT BY THE TPO AND THAT BY THE ASSESSING OFFICER (POST THE DIRECTIONS OF THE DRP) IS O N ACCOUNT OF REVISION OF THE MARGINS IN THE CASE OF TWO OF THE CONCERNS OUT OF THE SIX COMPARABLES. THEREFORE, WE PROCEED FURTHER ON THE BASIS THAT THE ADJUSTMENT ON ACCOUNT OF DETERMINATION OF ARMS LENGTH PRICE OF INTERNATIONAL TRANSACTIONS FOR 15 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 PROVISIO N OF GENERAL MANAGEMENT AND SUPPORT SERVICES HAS BEEN DETERMINED AT RS.64,77,283/ - . 19. IN THIS BACKGROUND, THE FIRST PLEA OF THE ASSESSEE IS BY WAY OF AN ADDITIONAL GROUND OF APPEAL IN TERMS OF WHICH IT IS CANVASSED THAT ACCESS INDIA ADVISORS LTD. BE EXC LUDED FROM THE FINAL SET OF COMPARABLES. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE EXPLAINED THAT THE SAID CONCERN DESERVES TO BE EXCLUDED ON THE GROUND THAT ITS MARGINS HAVE WIDE FLUCTUATIONS OVER THE YEARS AND IN THIS CONTEXT, HE REFERRED TO PAGE 492 OF THE PAPER BOOK WHEREIN THE MARGIN OF THE SAID CONCERN FROM THE YEAR S 2005 TO 2010 HAVE BEEN TABULATED. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE JUSTIFIED THE ADMISSION OF THE SAID PLEA, WHICH WAS HITHERTO NOT RAISED BEFORE THE LOWER AUTHORITIES ON T HE GROUND THAT THE NECESSARY INFORMATION SHOWING FLUCTUATION IN MARGINS WAS AVAILABLE IN PUBLIC DOMAIN ONLY SUBSEQUENTLY . 20. ON THE OTHER HAND, THE LD. CIT - DR APPEARING FOR THE REVENUE OPPOSED THE PLEA OF THE ASSESSEE BY POINTING OUT THAT THE ASSESSEE WA S NOT JUSTIFIED IN SEEKING EXCLUSION OF THE SAID CONCERN FROM THE FINAL SET OF COMPARABLES BECAUSE THE SAID CONCERN HAS BEEN INCLUDED BY THE ASSESSEE ITSELF AS A GOOD COMPARABLE IN ITS TRANSFER PRICING STUDY. IN SUPPORT OF HIS STAND, THE LD. CIT - DR HAS RE LIED ON THE DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF APP LABS TECHNOLOGIES (P.) LTD., 149 ITD 99 (HYD) TO CONTEND THAT WHERE THE ASSESSEE HAD NOT RAISED ANY OBJECTION WITH REGARD TO SELECTION OF A CONCERN AS A COMPARABLE BEFORE THE DR P, IT COULD NOT BE ALLOWED TO RAISE THE OBJECTION FOR THE FIRST TIME BEFORE THE TRIBUNAL. 16 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 21. IN REPLY, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE EXCLUSION IS SOUGHT BY THE ASSESSEE ON THE GROUND THAT THE MARGIN OF THE SAID CONCERN FLUCTUATES OVER A PERIOD OF TIME AND, THEREFORE, SUCH A CONCERN IS LIABLE TO BE EXCLUDED. IN SUPPORT, THE LEARNED REPRESENTATIVE HAS RELIED UPON THE FOLLOWING DECISIONS : - I) ACTIS ADVISERS PVT. LTD. VS. DCIT , ITA NO. 5277/DEL/2011 & 958/DEL/2012 (DELHI) II) PTC SOFTWARE (INDIA) P. LTD. VS. ACIT , ITA NO. 336/PN/2014 DATED 31.10.2014 22. AT THE TIME OF HEARING, THE LEARNED REPRESENTATIVE ALSO MADE A SUBMISSION TO THE EFFECT THAT THE ASSESSEE WOULD BE SATISFIED IF THE MATTER IS REMITTED BACK FOR VERIFICATI ON OF THE WORKING S AND TO EXAMINE AS TO WHETHER THE MARGIN OF THE SAID CONCERN IS VOLATILE OVER THE YEARS AND IF IT IS SO FOUND, THEN THE SAME SHOULD BE DIRECTED TO BE EXCLUDED. THE LEARNED REPRESENTATIVE ALSO SUBMITTED THAT THERE ARE JUSTIFIABLE REASONS FOR SEEKING THE EXCLUSION OF THE SAID CONCERN BEFORE THE TRIBUNAL, WHICH HITHERTO COULD NOT BE RAISED BEFORE THE LOWER AUTHORITIES. 23. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. AT THE OUTSET, WE MAY REFER TO THE TABULATION PLACED AT PAGE 492 O F THE PAPER BOOK REGARDING THE MARGINS OF ACCESS INDIA ADVISORS LTD. , WHICH IS AS UNDER : - 17 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 YEAR OPERATING MARGIN 2005 14.49% 2006 20.50% 2007 16.48% 2008 45.97% 2009 6.62% 2010 - 74.60% THE ABOVE TABULATION ENUMERATES THE OPERATING MARGIN OF ACCESS INDIA ADVISORS LTD. , AND THE TREND CLEARLY SUGGESTS THAT THE MARGIN S FLUCTUATE QUITE WIDELY OVER THE YEARS. FOR INSTANCE, IN THE ASSESSMENT YEAR UNDER CONSIDERATION, THE MARGIN OF THE SAID CONCERN IS REPORTED AT 45.97%, WHICH IS SIGNIFICANTLY IN VARIA NCE WITH THE MARGIN IN THE SUCCEEDING AND PRECEDING ASSESSMENT YEARS. IN FACT, IN THE YEAR 2010, IT HAS REPORTED A NEGATIVE MARGIN. OSTENSIBLY, THE SIGNIFICANT VARIATION IN THE MARGIN S DOES NOT RENDER THE SAID CONCERN TO BE A RELIABLE COMPARABLE UNLESS IT CAN BE MADE OUT THAT THE VARIATION IS ON ACCOUNT OF A NORMAL BUSINESS CONDITION. 24. WE MAY NOW TAKE UP THE ARGUMENT RAISED BY THE LD. CIT - DR TO THE EFFECT THAT THE SAID CONCERN HAS B EEN INCLUDED BY THE ASSESSEE ITSELF AS COMPARABLE . OSTENSIBLY, IN THE TRANSFER PRICING STUDY, THE ASSESSEE HAD CARRIED OUT THE COMPARABILITY ANALYSIS BY ADOPTING MULTIPLE YEAR S DATA OF THE COMPARABLES WHICH WOULD HAVE OFF - SET THE WIDE F LUCTUATIONS. IT I S ONLY IN THE COURSE OF PROCEEDINGS BEFORE THE TPO, THE ADOPTION OF MULTIPLE YEAR S DATA OF THE COMPARABLES WAS NEGATED AND ASSESSEE CARRIED OUT A COMPARABILITY ANALYSIS AFTER ADOPTING SINGLE YEARS DATA OF THE COMPARABLES RELATING TO THE PERIOD UNDER CONS IDERATION. IT HAS ALSO 18 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 BEEN POINTED OUT BEFORE US THAT IN ORDER TO ESTABLISH VOLATILITY IN THE MARGINS OVER THE YEARS, THE DATA OF THE SUBSEQUENT YEARS IS ALSO RELEVANT, WHICH BECAME AVAILABLE TO THE ASSESSEE ONLY SUBSEQUENTLY. IN OUR CONSIDERED OPINION, THE PLEA OF ASSESSEE FOR EXCLUSION OF ACCESS INDIA ADVISORS LTD. FROM THE FINAL SET OF COMPARABLES CANNOT BE DISREGARDED MERELY BECAUSE INITIALLY THE SAID CONCERN HAS BEEN ACCEPTED AS A COMPARABLE BY THE ASSESSEE IN ITS TRANSFER PRICING STUDY. A SIMILAR SITUATION HAS BEEN DEALT WITH BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF Q LOGIC (INDIA) (P.) LTD., [2014] 52 TAXMANN.COM 225 (PUNE - TRIB.) AND THE FOLLOWING DISCUSSION IS RELEVANT : - 17. IN OUR CONSIDERED OPINION, THE PLEA OF THE ASSESSEE FOR EXCLU SION OF BODHTREE CONSULTING LTD. FROM THE FINAL LIST OF COMPARABLES CANNOT BE SHUT OUT MERELY BECAUSE THE SAID COMPARABLE HAS BEEN ADOPTED BY THE ASSESSEE IN ITS TRANSFER PRICING STUDY. SO HOWEVER, THE AFORESAID PROPOSITION IS NOT AN ABSOLUTE PROPOSITION. IN OTHER WORDS, IT WOULD BE IMPERATIVE FOR THE ASSESSEE TO JUSTIFY EXCLUSION OF A CONCERN FROM THE LIST OF COMPARABLES IF IN THE INITIAL TRANSFER PRICING STUDY UNDERTAKEN BY IT, SUCH A CONCERN HAS BEEN ADOPTED AS A COMPARABLE. IN THE PRESENT SITUATION, CA SE HAS BEEN SET UP BY THE ASSESSEE FOR EXCLUSION OF BODHTREE CONSULTING LTD ON THE GROUND THAT THE PROFIT MARGINS OF THE SAID CONCERN ARE FLUCTUATING WIDELY AND ARE ABNORMALLY HIGH FOR THE PERIOD UNDER CONSIDERATION. OSTENSIBLY, THE FINANCIAL DATA OF THE S UCCEEDING YEARS WHICH HAS BEEN PRESSED INTO SERVICE BY THE ASSESSEE TO DEMONSTRATE ABNORMAL PROFIT TRENDS OF THE SAID CONCERN WAS NOT AVAILABLE WITH THE ASSESSEE AT THE TIME OF CARRYING OUT ITS TRANSFER PRICING STUDY. THEREFORE, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, IN OUR VIEW, ASSESSEE HAS JUSTIFIABLY DEMONSTRATED THAT THE CONCERN M/S. BODHTREE CONSULTING LTD. IS LIABLE TO BE EXCLUDED FROM THE FINAL SET OF COMPARABLES, EVEN THOUGH THE SAID CONCERN WAS CONSIDERED AS A COMPARABLE INITIALLY IN ITS TRANSFER PRICING STUDY. THEREFORE, ON THIS ASPECT, WE CONCLUDE BY HOLDING THAT THE CONCERN, M/S. BODHTREE CONSULTING LTD. BE EXCLUDED 19 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 FROM THE FINAL LIST OF COMPARABLES FOR CARRYING OUT THE COMPARABILITY ANALYSIS. WE HOLD S O. 25. AS PER THE PUNE BENCH OF THE TRIBUNAL , THE ONUS IS ON THE ASSESSEE TO JUSTIFY EXCLUSION OF A CONCERN FROM THE FINAL SET OF COMPARABLES , IF INITIALLY THE SAME CONCERN HAS BEEN ADOPTED AS A COMPARABLE BY THE ASSESSEE. I N THE PRESENT CASE, ASSESSEE HAS SOUGHT EXCL USION OF ACCESS INDIA ADVISORS LTD. ON THE GROUND THAT THE PROFIT MARGIN S OF THE SAID CONCERN FLUCTUATE WIDELY AND IN THE INSTANT ASSESSMENT YEAR ITSELF IT IS QUITE HIGH AT 45.97% , WHICH GOES DOWN TO 6.62% IN THE NEXT YEAR AND THEREAFTER THERE IS A NEGATIV E MARGIN OF 74.60%. SIMILARLY, WITH REGARD TO THE EARLIER THREE YEARS, THE MARGIN LEVELS ARE QUITE IN VARIANCE NOT O N L Y IN COMPARISON WITH THE LEVEL OF MARGIN IN THE INSTANT ASSESSMENT YEAR BUT ALSO IN RELATION TO THE SUBSEQUENT TWO YEARS . BE THAT AS IT MAY, THE FINANCIAL DATA OF THE SUCCEEDING YEARS, WHICH IS ESSENTIAL TO EXAMINE ANY ABNORMAL PROFIT TRENDS, WAS NOT AVAILABLE TO THE ASSESSEE AT THE TIME OF CARRYING OUT ITS TRANSFER PRICING STUDY AND, THEREFORE, ONCE SUCH AN INFORMATION IS AVAILABLE IN PUBLIC D OMAIN, IT IS ONLY THEREAFTER THAT THE ASSESSEE CAN FEASIBLY RAISE SUCH A GROUND BASED ON THE ABNORMAL FLUCTUATIONS IN THE MARGINS . NOTABLY, INSOFAR AS THE INSTANT CASE IS CONCERNED, THERE IS OSTENSIBLY A JUSTIFIABLE REASON FOR THE ASSESSEE TO RAISE SUCH A PLEA BEFORE US, WHICH WAS HITHERTO NOT RAISED BEFORE THE LOWER AUTHORITIES. THEREFORE, ON THIS ASPECT, WE ADMIT FOR CONSIDERATION THE PLEA OF ASSESSEE FOR EXCLUSION OF ACCESS INDIA ADVISORS LTD. FROM THE FINAL SET OF COMPARABLES. 20 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 26. INSOFAR AS THE PLEA OF LD. CIT - DR BASED ON THE DECISION OF HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF APP LABS TECHNOLOGIES (P.) LTD. (SUPRA) IS CONCERNED, WE HAVE CAREFULLY PERUSED THE SAID DECISION. THE TRIBUNAL IN THE CASE OF APP LABS TECHNOLOGIES (P.) LTD. (SUPRA) DE NIED THE ASSESSEE TO RAISE A PLEA FOR EXCLUSION OF A CONCERN WHICH HAD BEEN CONSIDERED BY THE ASSESSEE ITSELF AS A COMPARABLE AT AN EARLIER STAGE. THE SAID NEGATION BY THE TRIBUNAL WAS FOUNDED ON THE GROUND THAT ASSESSEE COULD NOT SHOW ANY REASONABLE CAU SE AS TO WHY THE ASSESSEE HAD NOT OBJECTED TO THE INCLUSION OF THE PARTICULAR CONCERN BEFORE THE LOWER AUTHORITIES. QUITE CLEARLY, THE FACT - SITUATION IN THE CASE BEFORE US STANDS ON A DIFFERENT FOOTING INASMUCH AS ON THE BASIS OF OUR AFORESAID DISCUSSION IT IS QUITE CLEAR THAT THERE IS A JUSTIFIABLE REASON PREVAILING WITH THE ASSESSEE, WHICH PREVENTED IT FROM RAISING THE PLEA FOR EXCLUSION OF ACCESS INDIA ADVISORS LTD. BEFORE THE LOWER AUTHORITIES. THEREFORE, THE RATIO OF THE DECISION OF HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF APP LABS TECHNOLOGIES (P.) LTD. (SUPRA) DOES NOT HELP THE REVENUE IN THE PRESENT CASE . 27. HAVING ADMITTED THE PLEA OF ASSESSEE SEEKING EXCLUSION OF ACCESS INDIA ADVI SORS LTD. FROM THE FINAL SET OF COMPARABLES, AND FOR THE REASON THAT SUCH A PLEA WAS HITHERTO NOT BEFORE THE LOWER AUTHORITIES, WE DEEM IT FIT AND PROPER TO REMAND THE MATTER BACK TO THE FILE OF ASSESSING OFFICER/TPO FOR AN APPROPRIATE VERIFICATION. THE A SSESSING OFFICER/TPO SHALL VERIFY THE WORKING OF THE OPERATING MARGIN S OF ACCESS INDIA ADVISORS LTD. FURNISHED BY THE ASSESSEE FOR THE VARIOUS YEARS AND IF IT IS FOUND TO BE VOLATILE WITHOUT REFLECTING ANY NORMAL BUSINESS CONDITION, THEN, THE ASSESSING OFF ICER/TPO SHALL EXCLUDE THE SAME FROM THE FINAL 21 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 SET OF COMPARABLES. NEEDLESS TO SAY, IN CARRYING OUT SUCH VERIFICATION EXERCISE, THE ASSESSING OFFICER/TPO SHALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD AND ONLY THEREAFTER THE ASSESSING OF FICER/TPO SHALL PASS AN APPROPRIATE ORDER AFRESH ON THIS LIMITED ASPECT. 28. ANOTHER PLEA OF THE ASSESSEE WITH REGARD TO THE SEGMENT OF PROVISION OF G ENERAL MANAGEMENT AND SUPPORT SERVICES IS TO SEEK INCLUSION OF EDUCATION AL CONSULTANTS (INDIA) LTD. IN THE FINAL SET OF COMPARABLES. THE EX CLUSION OF THE SAID CONCERN HAS BEEN SOUGHT TO BE JUSTIFIED BY THE LD. CIT - DR BASED ON THE DISCUSSION OF TPO IN POINTS (VIII) AND (IX) OF PART A OF PARA 7. NOTABLY, THE TPO HAS OBSERVED THAT EDUCATIONAL CONSULTANTS (IN DIA) LTD. IS FUNCTIONALLY DISSIMILAR AND, THEREFORE, THE SAME IS LIABLE TO BE EXCLUDED. THE LD. CIT - DR HAS EMPHASISED THE AFORESAID DISCUSSION IN THE ORDER OF TPO TO JUSTIFY THE STAND OF THE REVENUE. 29. THE PLEA OF THE APPELLANT IS THAT THE SAID CONCERN HAS BEEN FOUND TO BE A COMPARABLE IN THE PRECEDING THREE ASSESSMENT YEARS OF 200 5 - 06 TO 2007 - 08. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE ALSO POINTED OUT THAT BETWEEN ASSESSMENT YEAR S 2009 - 10 TO 2013 - 14, THE SAID CONCERN HAS ALSO BEEN ACCEPTED AS A C OMPARABLE AND IN ASSESSMENT YEARS 2010 - 11 AND 2013 - 14, THE ASSESSMENTS WERE COMPLETED U/S 143(3) OF THE ACT. IN SUM AND SUBSTANCE, THE LEARNED REPRESENTATIVE HAS JUSTIFIED THE INCLUSION OF THE SAID CONCERN ON THE BASIS OF PRINCIPLE OF CONSISTENCY. IN THI S CONTEXT, THE LEARNED REPRESENTATIVE HAS REFERRED TO THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF ELI LILLY & 22 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 CO. (INDIA) PVT. LTD., ITA NO. 788/DEL/2015 DATED 24.11.2015 TO POINT OUT THAT THE FUNCTIONS OF THE SAID CONCERN, NAMELY EDUCATIONAL CONSULTANTS (INDIA) LTD. HAVE BEEN FOUND TO BE SAME OVER THE YEARS , INCLUDING FOR THE ASSESSMENT YEAR UNDER CONSIDERATION . THE LEARNED REPRESENTATIVE EXPLAINED THAT THE ASSESSMENT YEAR BEFORE THE DELHI B ENCH OF THE TRIBUNAL WAS 2010 - 11 AND IT WAS CONSIDERING THE PLEA OF ASSESSEE FOR INCLUDING EDUCATIONAL CONSULTANTS (INDIA) LTD. AS A COMPARABLE ; IT WAS NOTED BY THE B ENCH THAT IN THE ASSESSMENT YEAR 2009 - 10 , THE SAID CONCERN WAS DIRECTED TO BE INCLUDED AS A COMPARABLE BY THE TRIBUNAL AFTER NOTIC ING THAT IN THE ASSESSMENT YEAR 2008 - 09, THE SAID CONCERN WAS ACCEPTED AS A COMPARABLE BY THE TPO HIMSELF . IT WAS, THEREFORE, POINTED OUT THAT THE ACTIVITIES OF THE SAID CONCERN WERE SIMILAR OVER THE YEARS AND, THEREFORE, IF IT HAS BEEN ACCEPTED BY THE TP O TO BE A COMPARABLE IN OTHER ASSESSMENT YEARS, IN THE INSTANT ASSESSMENT YEAR ALSO THE SAID CONCERN DESERVES TO BE ACCEPTED AS A COMPARABLE. 30. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. THE PLEA OF ASSESSEE TO INCLUDE EDUCATIONAL CONSULTANTS (INDIA) LTD. (SEG.) IN THE FINAL SET OF COMPARABLES IS PRIMARILY BASED ON THE NEED TO ADOPT A UNIFORM APPROACH IN DIFFERENT YEARS SO LONG AS THE FACT - SITUATION CONTINUES TO REMAIN THE SAME. ON THE BASIS OF THE DISCUSSION IN THE ORDER OF TRIBUNAL IN THE CA SE OF ELI LILLY & CO. (INDIA) PVT. LTD. (SUPRA) , IT IS SOUGHT TO BE ESTABLISHED THAT INSOFAR AS THE ACTIVITIES OF EDUCATIONAL CONSULTANTS (INDIA) LTD. (SEG.) OVER THE YEARS IS CONCERNED, THE SAME ARE SIMILAR. IT IS ALSO FACTUALLY EMERGING THAT IN THE OTHE R ASSESSMENT YEAR S REFERRED TO BY THE APPELLANT, THE SAID CONCERN HAS BEEN ACCEPTED AS A 23 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 COMPARABLE EVEN IN THE ASSESSMENTS FINALISED U/S 143(3) OF THE ACT. BE THAT AS IT MAY, IT IS ALSO CLEARLY EMERGING FROM THE ORDER OF TPO THAT THE SAID CONCERN HAS BEE N EXCLUDED BY MERELY MAKING A BALD ASSERTION ABOUT THE DISSIMILARITY OF FUNCTIONS. NOTABLY, SUCH AN OBSERVATION OF THE TPO IS DEVOID OF ANY FACTUAL SUPPORT AND, IN OUR VIEW, IT WAS IMPERATIVE FOR THE TPO TO BRING OUT THE DISTINGUISHING FEATURES CONSIDERIN G THAT THE SAID CONCERN WAS TAKEN AS A COMPARABLE IN THE PAST YEARS. SUCH A BURDEN HAS CLEARLY NOT BEEN DISCHARGED BY THE TPO AS IS EVIDENT FROM THE DISCUSSION IN THE ORDER AND, THEREFORE, WE FIND NO REASON TO UPHOLD HIS STAND FOR EXCLUDING THE SAID CONCE RN FROM THE FINAL SET OF COMPARABLES. THEREFORE, ON THIS ASPECT ALSO , ASSESSEE SUCCEEDS. 31. APART FROM THE AFORESAID, THE ONLY OTHER GROUND ARGUED BY THE ASSESSEE IN RELATION TO THE GENERAL MANAGEMENT AND SUPPORT SERVICES SEGMENT IS RELATING TO ALLOWING OF SUITABLE ADJUSTMENT FOR RISKS. THE AFORESAID PLEA OF THE ASSESSEE WAS RAISED BEFORE THE DRP, BUT IT WAS DECLINED ON THE GROUND THAT WHERE THE COMPARABILITY ANALYSIS IS BEING CARRIED OUT BY APPLYING TNM METHOD, THERE WAS NO REQUIREMENT FOR ALLOWING ADJ USTMENT FOR RISKS. 32. BEFORE US, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE HAS RELIED UPON THE FOLLOWING DECISIONS FOR ALLOWABILITY OF RISK ADJUSTMENT : - I) INTELLINET TECHNOLOGIES INDIA PVT. LTD. VS ITO, ITA NO. 1237/BANG/2010 II) SCHLUMBERGER GLOBAL SUPPORT CENTRE LTD VS DDIT, (2015) 64 TAXMANN.COM 322 (PUNE) 24 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 33. THE LEARNED REPRESENTATIVE ALSO REFERRED TO PAGE 560 OF THE PAPER BOOK TO POINT OUT THE BASIS FOR WORKING OUT THE RISK ADJUSTMENT AND CONTENDED THAT THE MATTER MAY BE SET - ASIDE TO THE FILE OF TPO/ASSESSING OFFICER FOR APPROPRIATE VERIFICATION . 34. ON THIS ASPECT, THE LD. CIT - DR APPEARING FOR THE REVENUE HAS OPPOSED THE PLEA OF ASSESSEE FOR ALLOWING RISK ADJUSTMENT BY REITERATING TH E STAND OF THE DRP, WHICH WE HAVE ALREADY NOTED EARLIER, AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY . 35. ON THIS ASPECT OF THE MATTER, WE FIND THAT THE PLEA OF ASSESSEE HAS BEEN DECLINED BY THE DRP IN A RATHER CASUAL MANNER. NOTABLY, THE APPELLANT HAD CANVASSED BEFORE THE LOWER AUTHORITIES THAT ADJUSTMENT FOR THE DIFFERENCE BETWEEN THE RISK ASSUMED BY THE ASSESSEE AND THOSE ASSUMED BY THE COMPARABLE CONCERNS WAS REQUIRED TO BE MADE. NOTABLY, THE ASSESSEE HAD ALSO SOUGHT THE BENEFIT OF WORKING CAPI TAL ADJUSTMENT TO ACCOUNT FOR THE DIFFERENCE IN THE LEVEL OF WORKING CAPITAL DEPLOYED BY THE ASSESSEE VIS - A - VIS THE COMPARABLE CONCERNS. THE DRP IN PARA 9.1 OF HIS ORDER HAS DENIED BOTH THE CLAIMS PRIMARILY ON THE GROUND THAT THE COMPARABLES HAVE BEEN CH OSEN WITH DUE REGARD TO THEIR FUNCTIONS, ASSETS AND RISKS . AS PER THE DRP, IN THE TNM METHOD THE CONCERNS ARE TAKEN AS COMPARABLES BASED ON BROAD SIMILARITIES AND THAT TAKING OF THE MEAN OF THE MARGINS OF THE COMPARABLE CONCERNS WOULD EVEN OUT THE MINOR DIFFERENCES IN THE RISK PROFILE OF THE CONCERNS. FOR THE SAID REASONS, THE DRP DECLINED THE CLAIM AND ALSO NOTED THAT THE CLAIM WAS WITHOUT ANY WORKING OR ANY DEFINITE OUTLINING OF THE 25 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 DIFFERENCES IN THE RISK PROFILES OF THE COMPARABLES AND THAT OF THE T ESTED PARTY AND IS DEVOID OF ANY NUMERICAL DETAILS AS TO HOW SUCH ADJUSTMENTS CAN BE CONSIDERED. 36. WE HAVE CONSIDERED THE AFORESAID STAND OF THE DRP AND FIND THAT THE CASE OF ASSESSEE FOR ADJUSTMENT ON ACCOUNT OF DIFFERENCE IN WORKING CAPITAL AND RIS K S ASSUMED HAS BEEN SHUT OUT EVEN BEFORE EXAMINING THE SAME IN SOME DETAIL. BEFORE US, THE LEARNED REPRESENTATIVE HAS FURNISHED THE WORKINGS OF WORKING CAPITAL ADJUSTMENT AND RISK ADJUSTED MARGIN OF THE COMPARABLE CONCERNS TO POINT OUT THAT ON FACTS ALSO, SUCH ADJUSTMENTS ARE JUSTIFIED. EVEN OTHERWISE, WE FIND THAT OUR COORDINATE BENCHES IN THE CASE OF INTELLINET TECHNOLOGIES INDIA PVT. LTD. (SUPRA) AND SCHLUMBERGER GLOBAL SUPPORT CENTRE LTD (SUPRA) HAVE FOUND THAT EVEN IN THE COURSE OF COMPARABILITY ANAL YSIS CARRIED OUT BY APPLYING THE TNM METHOD, SUITABLE RISK ADJUSTMENT S ARE PERMISSIBLE IF THE FACTS OF THE CASE SO WARRANT. OSTENSIBLY, THE WORKINGS REFERRED BY THE ASSESSEE BEFORE US CULLING OUT JUSTIFICATION FOR ALLOWING WORKING CAPITAL AND RISK ADJUSTMENTS HAVE NOT BEEN VERIFIED BY THE LOWER AUTHORITIES. THEREFORE, WHILE WE UPHOLD THE STAND OF THE ASSESSEE IN - PRINCIPLE, SO HOWEVER, IT WOULD BE IMPE RATIVE FOR THE ASSESSEE TO FACTUALLY DEMONSTRATE THE JUSTIFIABILITY OF THE ADJUSTMENTS ON ACCOUNT OF DIFFERENCE IN WORKING CAPITAL AND RISKS ASSUMED VIS - A - VIS THE COMPARABLES BEFORE THE LOWER AUTHORITIES. THEREFORE, THE MATTER IS SET - ASIDE TO THE FILE OF TPO/ASSESSING OFFICER WITH DIRECTIONS TO CONSIDER THE PLEA OF THE ASSESSEE IN ACCORDANCE WITH LAW. THUS, ON THIS ASPECT, ASSESSEE SUCCEEDS FOR STATISTICAL PURPOSES. 26 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 37. INSOFAR AS THE ISSUE RELATING TO THE TRANSFER PRICING ADJUSTMENT IS CONCERNED, NO FUR THER ARGUMENTS HAVE BEEN RAISED BY THE ASSESSEE AND ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO RE - DETERMINE THE ARMS LENGTH PRICE OF INTERNATIONAL TRANSACTIONS ON THE BASIS OF OUR AFORESAID DIRECTIONS. 38. THE NEXT GROUND IS WITH REGARD TO ADDITIO N OF RS. 77,13,648/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NON - RECONCILIATION OF ITS DATA . IN THIS CONTEXT, THE RELEVANT FACTS ARE THAT THE ASSESSING OFFICER PROVIDED ASSESSEE WITH ITS DATA IN TERMS OF WHICH THERE WAS A DIFFERENCE VIS - A - VIS ENTRIES M ADE IN THE ACCOUNT BOOKS OF THE ASSESSEE - COMPANY. BEFORE THE LOWER AUTHORITIES, ASSESSEE POINTED OUT THAT IT HAD DULY REPORTED ITS INCOMES IN THE FINANCIAL STATEMENTS AND THAT THE ITS DETAILS WERE OBTAINED ON THE BASIS OF THE TDS RETURNS FILED BY THE DEDU CTORS AND THAT ASSESSEE HAD NO CONTROL ON SUCH FILINGS . ONE OF THE POINT S MADE OUT BY THE ASSESSEE WAS THAT THE ITS DETAILS PROVIDED BY THE ASSESSING OFFICER WERE INSUFFICIENT TO CARRY OUT EXACT RECONCILIATION INASMUCH AS IT DOES NOT INDICATE THE PAN OF T HE OTHER PARTY, INVOICE NUMBER OR DATE. HOWEVER, THE ASSESSING OFFICER AS WELL AS THE DRP HELD THAT THE TRANSACTIONS APPEARING IN THE ITS DETAILS ARE MAPPED ONLY WITH THE TRANSACTIONS WHICH TAKE PLACE ON THE PAN OF ASSESSEE AND, THEREFORE, THE ONUS WAS ON THE ASSESSEE TO RECONCILE THE DATA. IN THE ABSENCE OF THE RECONCILIATION, THE DIFFERENCE OF RS.77,13,648/ - HAS BEEN SUSTAINED AS ADDITION IN THE FINAL ASSESSMENT ORDER. 39. ON THIS ASPECT, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE TOTAL REVENUES AS PER THE FINANCIAL STATEMENTS OF 27 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 THE ASSESSEE WERE RS.14,80,54,062/ - , WHEREAS THE TOTAL REVENUES FROM THE PARTIES MENTIONED IN THE AIR INFORMATION WAS ONLY RS. 9,09,81,844/ - . IT WAS, THEREFORE, POINTED OUT THAT THE REVENUES APPEARING IN T HE IT S DETAILS WAS MUCH LOWER THAN THE REVENUES ALREADY DECLARED BY THE ASSESSEE IN ITS AUDITED FINANCIAL STATEMENTS AND THAT THE UN - RECONCILED AMOUNT OF RS.77,13,648/ - WAS PRIMARILY ON ACCOUNT OF INSUFFICIENCY OF ITS DETAILS AND NOT FOR ANY REASON FOR ERR ONEOUS ACCOUNTING BY THE ASSESSEE. THE LEARNED REPRESENTATIVE EMPHASISED THAT THE ASSESSEE HAS NOT RECEIVED ANY MONIES IN CASH AND THAT THE UN - RECONCILED AMOUNT AS A PERCENTAGE OF THE TOTAL REVENUES IS VERY NEGLIGIBLE, I.E. 0.64%. IT WAS POINTED OUT THAT IN A SIMILAR SITUATION, THE TRIBUNAL VIDE ITS ORDER IN ITA NO. 527/ MUM/2010 DATED 8.12.2010 HAS HELD THAT NO ADDITION IS PERMISSIBLE , MERELY BASED ON THE INFORMATION OBTAINED FROM THE ITS DATA. 40. ON THE OTHER HAND, THE LD. CIT - DR HAS REITERATED THE STA ND OF THE LOWER AUTHORITIES BY POINTING OUT THAT THE ONUS WAS ON THE ASSESSEE TO RECONCILE THE ITS DETAILS AND, THEREFORE, THE ADDITION IS SUSTAINABLE. 41. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. NO DOUBT, THE ONUS IS ON THE ASSESSEE TO RECON CILE THE DETAILS, SO HOWEVER, THE RECONCILIATION IS TO BE BASED ON AVAILABILITY OF APPROPRIATE DETAILS. AT THE TIME OF HEARING, THE ASSESSEE - COMPANY HAD REFERRED TO A COMMUNICATION DATED 12.12.2011 ADDRESSED TO THE ASSESSING OFFICER WHICH SUCCINCTLY DETAI LS THE REASONS FOR THE DIFFERENCE AND THE REASON FOR WHICH PROPER RECONCILIATION COULD NOT BE MADE. IN THE SAID COMMUNICATION, ASSESSEE HAD EXPLAINED THAT THE ITS DETAILS WAS 28 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 FOUNDED ON THE BASIS OF NAME AND ADDRESS OF THE PARTIES AND THE AMOUNT AND DATE ENTERED BY THE OTHER PARTY IN ITS BOOK OF ACCOUNTS. IT HAS BEEN POINTED OUT THAT IN THE ABSENCE OF PAN OF OTHER PARTY, THE RELEVANT INVOICE NUMBER AND DATE, IT IS DIFFICULT TO EXACTLY MATCH THE ENTRIES APPEARING IN THE ASSESSEES BOOK OF ACCOUNTS. THE RE LEVANCE OF THE AFORESAID HAS ALSO BEEN BROUGHT OUT IN SOME DETAIL BY THE ASSESSEE IN ITS COMMUNICATION TO THE ASSESSING OFFICER. FOR INSTANCE, IT IS POINTED OUT THAT IN SOME CASES NAMES OF CERTAIN INDIVIDUALS ARE MENTIONED IN THE ITS DETAILS WHEREAS ASSES SEE WOULD HAVE RECORDED THE TRANSACTIONS IN THE NAME OF THE PROPRIETARY CONCERN AND NOT IN THE NAME OF THE INDIVIDUAL AND THAT SUCH A SITUATION MAKES IT EXTREMELY DIFFICULT TO RECONCILE THE AMOUNTS ON THE BASIS OF LIMITED INFORMATION AVAILABLE. IN ANY CAS E, IT IS QUITE OBVIOUS THAT THE REVENUES CREDITED BY THE ASSESSEE IN ITS FINANCIAL STATEMENTS ARE MUCH MORE THAN THE DETAILS OBTAINED BY THE ASSESSING OFFICER IN THE ITS DATA . ONE PERTINENT POINT WHICH STANDS OUT IS THE ASSERTION OF THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT WHEREVER IN CASE OF A PARTY THE AMOUNT OF REVENUE RECORDED IN THE PROFIT & LOSS ACCOUNT OF THE ASSESSEE WAS FOUND LOWER THAN THE ITS DETAILS, ASSESSE E EXPLAINED THAT SAME IS MERELY ON ACCOUNT OF TIMING DIFFERENCE INASMUCH AS ASSESSEE WOULD HAVE CREDITED SUCH SUM TO THE PROFIT & LOSS ACCOUNT OF THE OTHER YEAR. ASSESSEE ALSO ASSERTED BEFORE THE ASSESSING OFFICER IN ITS COMMUNICATION DATED 12.12.2011 THA T IN RESPECT OF THE PARTIES MENTIONED IN THE ITS DETAILS, ON AN OVERALL BASIS, THE REVENUES REFLECTED BY THE ASSESSEE IN ITS FINANCIAL STATEMENTS WAS HIGHER THAN THE REVENUES NOTED IN THE ITS DETAILS. THERE IS NO REPUDIATION TO ANY OF THE AFORESAID ASSERT IONS AND, THEREFORE, WE FIND 29 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 THAT NO ADDITION IS WARRANTED ON THIS COUNT. THEREFORE, ON THIS ASPECT, ASSESSEE SUCCEEDS. 42. THE ONLY OTHER ISSUE IN THIS APPEAL IS WITH REGARD TO THE GRANT OF CREDIT FOR TDS AMOUNTING TO RS.2,60,19,233/ - . AT THE TIME OF H EARING, THE LEARNED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT ASSESSEE HAD ALREADY MOVED AN APPLICATION TO THE ASSESSING OFFICER SEEKING CREDIT FOR THE TDS. CONSIDERING THE AFORESAID, WE DIRECT THE ASSESSING OFFICER TO CONSIDER THE APPLICATION OF THE ASSESSEE IN ACCORDANCE WITH LAW. THUS, ON THIS ASPECT, ASSESSEE SUCCEEDS FOR STATISTICAL PURPOSES. 43. INSOFAR AS THE LEVY OF INTEREST U/S 234B & 234C OF THE ACT IS CONCERNED, NO SPECIFIC ARGUMENTS HAVE BEEN RAISED AND THEY BEING CONSEQUENTIAL IN NATURE ARE ACCORDINGLY DISMISSED . 44. RESULTANTLY, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 2 8 T H APRIL, 2017. SD/ - SD/ - ( RAM LAL NEGI ) JUDICIAL MEMBER ( G.S. PANNU ) ACCOUNTANT MEMBER MUMBAI, DATE : 2 8 T H APRIL , 201 7 * SSL * COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 30 THE WALT DISNEY COMPANY (INDIA) PVT. LTD. ITA NO. 7678/MUM/2012 4) THE CIT CONCERNED 5) THE D.R, K BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI