DCIT, Circle- 1(1)(1), International Taxation, New Delhi V. AT Kearney Ltd.- India Branch Office, Gurgaon

ITA 7887/DEL/2017

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6153 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2021
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: I1
• Assessment Year: 2009-2010
• Appeal Filed On: 29-12-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY CHOUDHARY
• Assessee Lawyers: ASHISH G
• Keywords: Transfer pricing; Opportunity of being heard; International transaction; Commercial expediency
• Section: 195; 13; 22; 92CA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES I-1 : DELHI [THROUGH VIDEO CONFERENCING] BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA.NOS.7887 & 7888/DEL./2017 ASSESSMENT YEARS 2009-2010 & 2010-2011 THE DCIT, CIRCLE-1(1)(1), INTERNATIONAL TAXATION, NEW DELHI VS. M/S. AT KEARNEY LIMITED, 14 TH FLOOR, TOWER-D, GLOBAL BUSINESS PARK, MEHRAULI GURGAON ROAD, GURGAON 122 002. PAN AADCA0861H ( APPELLANT ) (RESPONDENT) FOR REVENUE : SHRI VIJAY CHOUDHARY, SR. DR FOR ASSESSEE : SHRI VED JAIN, SR. ADVOCATE AND SHRI ASHISH GOEL, C.A. DATE OF HEARING : 14 . 07 .20 21 DATE OF PRONOUNCEMENT : 14 . 0 9 .20 2 1 ORDER PER R.K. PANDA, A.M. THE ABOVE TWO APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE SEPARATE ORDERS DATED 22.09.2017 OF THE LD. CIT(A)-38, NEW DELHI, RELATING TO THE A.YS. 2009- 2010 AND 2010-2011 RESPECTIVELY. FOR THE SAKE OF 2 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA.NO.7887/DEL./2017 A.Y. 2009-2010 [REVENUE] 2. GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN LAW TO DELETE THE ADDITIONS MADE BY THE TPO AND HOLD THAT THE PAYMENT MADE FOR INTRA GROUP SERVICES WAS FOR COMMERCIAL EXPEDIENCY? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN LAW IN HOLDING THAT THE TPO HAS RE-CHARACTERIZED THE INTER GROUP SERVICES TRANSACTION? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN LAW IN NOT APPRECIATING THAT TPO HAS NOT DISALLOWED THE INTRA GROUP SERVICES MERELY ON THE ISSUE OF NON- SUBSTANTIATION OF COMMERCIAL EXPEDIENCY BY THE ASSESSEE BUT ON SEVERAL FACTORS? 3 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN LAW TO EXCLUDE THE REIMBURSEMENT PAYMENT FROM THE OPERATING COST NOT APPRECIATING THE FACT THAT THESE REIMBURSEMENT PAYMENT WOULD ATTRACT WITHHOLDING TAX U/S 195 OF THE INCOME TAX ACT? 5. THE APPELLANT CRAVES TO LEAVE TO ADD, MODIFY, AMEND OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OF, OR BEFORE, THE HEARING OF THE APPEAL. 3. GROUNDS OF APPEAL NUMBERS.1 TO 3 FILED BY THE REVENUE RELATE TO THE ADJUSTMENT ON ACCOUNT OF PAYMENT FOR INTRA GROUP SERVICES TO AE. 4. FACTS OF THE CASE, IN BRIEF, ARE THAT ASSESSEE COMPANY IS A MANAGEMENT CONSULTING SUBSIDIARY OF GLOBAL INFORMATION SERVICES LEADER EDS. IT PROVIDES CONSULTANCY SERVICES IN THE MANUFACTURING INDUSTRY TO A DIVERSE, MULTINATIONAL ENTERPRISE. IT HAS ESTABLISHED A BRANCH OFFICE IN INDIA IN 1997 WHICH IS ENGAGED IN THE BUSINESS OF 4 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. PROVIDING MANAGEMENT CONSULTANCY SERVICES. IT FILED ITS RETURN OF INCOME ON 30.09.2009 DECLARING LOSS OF RS.41,13,206/- THE A.O. MADE A REFERENCE TO THE TPO, WHO VIDE ORDER DATED 28.01.2013 HELD THAT THE ASSESSEE HAS NOT BEEN ABLE TO SHOW AS TO WHAT COST BENEFIT ANALYSIS HAS BEEN DONE BY IT WITH REGARD TO THE PURPORTED RECEIPT OF SERVICE FROM THE AE. ACCORDING TO THE TPO, NO INDEPENDENT PARTY WOULD HAVE MADE A PAYMENT IN UNCONTROLLED CIRCUMSTANCES. THEREFORE, BY APPLYING COMPARABLE UNCONTROLLED PRICE [ CUP ] METHOD, THE TPO PROPOSED UPWARD ADJUSTMENT OF RS.6,66,77,478/-. THE A.O. ACCORDINGLY DETERMINED THE INCOME OF THE ASSESSEE AT NIL AFTER ADJUSTMENT OF BROUGHT FORWARD LOSSES. 4.1. IN APPEAL, THE LD. CIT(A) DIRECTED THE TPO TO GRANT 50% OF THE ADJUSTMENT CLAIMED BY THE ASSESSEE ON ACCOUNT OF INTRA-GROUP SERVICES BY OBSERVING AS UNDER : 5.3. I HAVE CONSIDERED THE ARGUMENTS OF THE AR AND THE ORDER OF TPO. IN LIGHT OF VARIOUS JUDICIAL PRECEDENTS INCLUDING CIT VS EKL 5 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. APPLIANCES LTD., [2012] 345 ITR 241, DRESSER- RAND INDIA PVT. LTD. V. ADDITIONAL COMMISSIONER OF INCOME\TAX, 2012 (13) ITR (TRIB) 422 AND COMMISSIONER OF INCOME TAX-I VS. CUSHMAN AND WAKEFIELD INDIA PVT. LTD. (ITA NO. 475/2012), IT HAS BEEN CLEARLY ESTABLISHED THAT IT IS BEYOND THE POWERS OF THE TRANSFER PRICING OFFICER TO QUESTION THE COMMERCIAL WISDOM OF THE ASSESSEE. THE TPO'S AUTHORITY IS RESTRICTED TO DETERMINING THE ALP FOR INTERNATIONAL TRANSACTIONS REFERRED TO HIM BY THE AO. THE TPO, AFTER A CONSIDERATION OF THE FACTS, CAN STATE THAT THE ALP IS 'NIL' GIVEN THAT AN INDEPENDENT ENTITY IN A COMPARABLE TRANSACTION WOULD NOT PAY ANY AMOUNT. FURTHER, THE DELHI HIGH COURT IN CASE OF BAUSCH AND LOMB EYE CARE PRIVATE LIMITED HAS HELD THAT RE-CHARACTERIZATION OF TRANSACTION AND QUESTIONING COMMERCIAL EXPEDIENCY IS NOT PERMISSIBLE ON THE BASIS OF 6 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. THE JUDGMENT IN EKL APPLIANCES. IN THIS CASE, THE ISSUE RAISED BY THE LEARNED TPO/AO IS WHETHER AN INDEPENDENT ENTITY WOULD HAVE PAID FOR SUCH SERVICES. RELYING ON THE DECISION OF HONBLE DELHI HIGH COURT IN MULTIPLE CASES SUCH AS EKL APPLIANCES AND BAUSCH AND LOMB EYE CARE INDIA PRIVATE LIMITED AND THE SUBMISSIONS OF APPELLANT, I AM OF THE OPINION THAT THERE IS ENOUGH MATERIAL ON RECORD TO CONCLUDE THAT SOME SERVICES WERE AVAILED BY THE COMPANY. HOWEVER, IT IS NOT POSSIBLE LO QUANTIFY THE VALUE OF SERVICES AVAILED BY APPELLANT IN THE ABSENCE OF ANY INDEPENDENT THIRD PARTY DOCUMENTATION. THEREFORE, TPO IS DIRECTED TO GRANT 50% OF THE ADJUSTMENT CLAIMED BY APPELLANT ON ACCOUNT OF INTRA GROUP SERVICES AVAILED BY THE APPELLANT. 5. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A), THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 7 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. 6. THE LD. D.R. HEAVILY RELIED ON THE ORDER OF THE A.O. 7. THE LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT THE A.O. HAS MADE THE ADJUSTMENT OF RS.5,32,51,014/- ON ACCOUNT OF PAYMENT OF INTRA GROUP SERVICES TO A.E. HE SUBMITTED THAT THE LD. CIT(A) DIRECTED THE TPO TO GRANT 50% OF THE ADJUSTMENT ON ACCOUNT OF INTRA GROUP SERVICES AND ACCORDINGLY AN AMOUNT OF RS.2,66,25,507/- WAS SUSTAINED AND BALANCE AMOUNT WAS DELETED. HE SUBMITTED THAT THE ASSESSEE HAD FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A) SUSTAINING THE 50% DISALLOWANCE AND THE TRIBUNAL VIDE ORDER DATED 25.02.2020 IN ITA.NOS.7722 & 7723/DEL./2017 HAS DELETED THE ADDITION OF RS.2,16,66,25,507/- SUSTAINED BY THE LD. CIT(A). HE SUBMITTED THAT SINCE THE TRIBUNAL HAS ALREADY DECIDED THIS ISSUE AND PASSED THE ORDER IN FAVOUR OF THE ASSESSEE IN ASSESSEES APPEAL RELYING UPON THE ORDER OF THE TRIBUNAL FOR THE A.Y. 2008-2009, 8 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. THEREFORE, THE APPEAL FILED BY THE REVENUE SHOULD BE DISMISSED. 8. WE HAVE HEARD THE RIVAL ARGUMENTS OF BOTH THE SIDES, PERUSED THE ORDER OF THE A.O, LD. CIT(A), PAPER BOOK FILED ON BEHALF OF THE ASSESSEE AND GONE THROUGH THE ORDER OF THE TRIBUNAL. WE FIND THE A.O. IN THE INSTANT CASE HAS MADE AN ADJUSTMENT OF RS.5,32,51,014/- ON ACCOUNT OF PAYMENT OF INTRA GROUP SERVICES TO AE. WE FIND THE LD. CIT(A) VIDE ORDER DATED 22.09.2017 DIRECTED THE TPO TO GRANT 50% OF THE ADJUSTMENT ON ACCOUNT OF INTRA GROUP SERVICES AND ACCORDINGLY AN AMOUNT OF RS.2,66,25,507/- WAS SUSTAINED AND BALANCE AMOUNT OF RS.2,66,25,507/- WAS DELETED. WE FIND AGAINST THE ORDER OF THE LD. CIT(A), THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ITA.NOS.7722 & 7723/DEL./2017, ORDER DATED 25.02.2020, FOR THE A.YS. 2009-2010 AND 2010- 2011, DELETED THE ADDITION SUSTAINED BY THE LD. CIT(A) BY OBSERVING AS UNDER : 9 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE VIDE ITA NO.6249/ DEL/2012 FOR A.Y. 2008-09. THE TRIBUNAL, VIDE ORDER DATED 21 ST MAY, 2018 AT PARA 16 TO 18 OF THE ORDER HAS OBSERVED AS UNDER:- 11. AFTER CONSIDERING THE WRITTEN SUBMISSIONS OF THE LD. DR AND THE ORDERS OF THE AUTHORITIES BELOW, IN OUR CONSIDERED OPINION, IN ORDER TO EXAMINE THE ALP OF INTRA GROUP SERVICES RECEIVED BY ONE OF THE ASSOCIATED ENTERPRISES, FOLLOWING ESSENTIAL INFORMATION SHOULD BE AVAILABLE: 1. WHETHER THE AE HAS RECEIVED INTRA GROUP SERVICES? 2. WHAT ARE THE ECONOMIC AND COMMERCIAL BENEFITS DERIVED BY THE RECIPIENT OF INTRA GROUP SERVICES. 3. IN ORDER TO INDENTIFY THE CHARGES RELATING TO SERVICES, THERE SHOULD BE A MECHANISM IN PLACE WHICH CAN IDENTITY (I) THE COST INCURRED BY THE AE IN PROVIDING THE INTRA GROUP SERVICES AND (II) THE BASIS OF ALLOCATION OF COST TO VARIOUS AES. 10 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. 4. WHETHER A COMPARABLE INDEPENDENT ENTERPRISE WOULD HAVE PAID FOR THE SERVICES IN COMPARABLE CIRCUMSTANCES? 12. EXAMINATION OF CONTROLLED TRANSACTION ORDINARILY SHOULD BE BASED ON THE TRANSACTION ACTUALLY UNDERTAKEN BY THE AE AS IT HAS BEEN STRUCTURED BY THEM USING THE METHOD APPLIED BY TAX PAYER IN SO FAR THESE ARE CONSISTENT WITH THE METHODS DESCRIBED UNDER CHAPTER II AND III. ONLY IN EXCEPTIONAL CASES TAX ADMN. SHOULD DISREGARD THE ACTUAL TRANSACTIONS OR SUBSTITUTE OTHER TRANSACTIONS FOR THEM. RESTRUCTURING OF LEGITIMATE BUSINESS TRANSACTIONS WOULD BE A WHOLLY ARBITRARY EXERCISE THE INEQUITY OF WHICH COULD BE COMPOUNDED BY DOUBLE TRANSACTION CREATED WHERE THE OTHER TAX ADMINISTRATION DOES NOT SHARE THE SAME VIEWS AS TO HOW THE TRANSACTION SHOULD BE STRUCTURED. FOR THIS PROPOSITION, WE DRAW SUPPORT FROM THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF EKL APPLIANCES 344 ITR 241. 13. IN THE SAME JUDGMENT, THE HON'BLE HIGH COURT OBSERVED THAT THE CHARACTER OF TRANSACTION MAY DERIVE FROM RELATIONSHIP BETWEEN THE PARTIES RATHER THAN BE DETERMINED BY NORMAL COMMERCIAL CONDITIONS AS MAY 11 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. HAVE BEEN STRUCTURED BY THE TAX PAYER TO AVOID OR MINIMIZE TAX. THE SIGNIFICANCE OF THE AFORESAID GUIDELINES LIES IN THE FACT THAT THEY RECOGNISE THAT BARRING EXCEPTIONAL CASES, THE TAX ADMINISTRATION SHOULD NOT DISREGARD THE ACTUAL TRANSACTION OR SUBSTITUTE OTHER TRANSACTIONS FOR THEM AND THE EXAMINATION OF A CONTROLLED TRANSACTION SHOULD ORDINARILY BE BASED ON THE TRANSACTION AS IT HAS BEEN ACTUALLY UNDERTAKEN AND STRUCTURED BY THE ASSOCIATED ENTERPRISES. IT IS OF FURTHER SIGNIFICANCE THAT THE GUIDELINES DISCOURAGE RE-STRUCTURING OF LEGITIMATE BUSINESS TRANSACTIONS. 14. IT HAS BEEN HELD BY VARIOUS COURTS THAT IT IS NOT FOR THE REVENUE AUTHORITIES TO DICTATE TO THE ASSESSEE AS TO HOW HE SHOULD CONDUCT HIS BUSINESS AND IT IS NOT FOR THEM TO TELL THE ASSESSEE AS TO WHAT EXPENDITURE THE ASSESSEE CAN INCUR. THE QUESTION WHETHER DECISION WAS COMMERCIALLY SOUND OR NOT IS NOT RELEVANT. THE HON'BLE HIGH COURT IN THE JUDGMENT CITED AS EKL APPLIANCES [SUPRA] HAS HELD THAT THE ASSESSEE WAS NOT REQUIRED TO SHOW THAT ANY EXPENDITURE INCURRED BY HIM FOR THE PURPOSE OF BUSINESS CARRIED ON BY HIM HAS ACTUALLY RESULTED IN PROFIT OR INCOME EITHER IN THE SAME YEAR OR IN THE SUBSEQUENT YEARS. 12 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. 15. THE HON'BLE HIGH COURT OF DELHI IN THE CASE OF COTTON NATURALS INDIA [P] LTD 276 CTR 445 AT PARA 17 OF ITS ORDER HAS HELD THAT CHAPTER X AND TRANSFER PRICING RULES DO NOT PERMIT THE REVENUE AUTHORITIES TO STEP INTO THE SHOES OF THE ASSESSEE AND DECIDE WHETHER OR NOT A TRANSACTION SHOULD HAVE BEEN ENTERED. IT IS FOR THE ASSESSEE TO TAKE COMMERCIAL DECISIONS AND DECIDE HOW TO CONDUCT AND CARRY ON ITS BUSINESS. 16. IT IS INCORRECT TO SAY THAT THE ASSESSEE HAS NOT PROVIDED APPROPRIATE/LOGICAL ALLOCATION OF COST TO ATK AFFILIATES FOR MANAGEMENT SUPPORT AND COST ALLOCATED TO ATK INDIA. FOLLOWING CHART SUMMARIZES THE TOTAL GROUP COSTS: 17. BREAK UP OF COST UNDER EACH HEAD IS EXHIBITED SEPARATELY IN THE PAPER BOOK. EACH COST IS SUPPORTED BY EVIDENCES WHICH ARE PLACED AT PAGES 701 TO 1421 OF THE PAPER BOOK. 18. IN SO FAR AS THE ALLEGATION RELATING TO THE PAYMENT FOR DUPLICATE SERVICES IS CONCERNED, IT APPEARS THAT LOWER AUTHORITIES HAVE CONFUSED ATKBO WITH ANOTHER GROUP ENTITY ATK INDIA PVT. LTD WHICH IS A SEPARATE ENTITY WHOSE FINANCIAL/TP STUDY ARE PLACED ON OUR RECORD FOR THE YEAR UNDER CONSIDERATION. DETAILED COST ALLOCATION SHEETS SHOWING DIFFERENT PERSONNEL INVOLVED FOR EACH SERVICE HAS BEEN PLACED ON RECORD SEPARATELY. WE FIND THAT THE 13 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. REVENUE AUTHORITIES HAVE SIMPLY RUBBISHED THE EMAIL EVIDENCES BROUGHT ON RECORD WITHOUT EXAMINING AND POINTING OUT DEFECTS IN THE EVIDENCES. IT IS NOT PROPER FOR THE LOWER AUTHORITIES TO DISREGARD SUCH DIRECT EVIDENCES. 19. IN SO FAR AS THE PAYMENT RELATING TO MANAGEMENT SERVICES PROVIDED BY ATK AUSTRALIA IS CONCERNED, WE FIND THAT THE SAME HAS BEEN DISMISSED BY LOWER AUTHORITIES ON FLIMSY GROUNDS. WE FIND THAT THE ALLOCATION IN RESPECT OF SERVICES PROVIDED BY SHRI JOHN YOSHIMURA REGIONAL HEAD OF OFFICES IS ON THE BASIS OF TIME SPENT BY HIM IN RELATION TO ATKBO. IN OUR CONSIDERED OPINION, THIS ALLOCATION IS LOGICAL AND SOUND ON THE FACTS OF THE CASE. THERE ARE EMAIL EVIDENCES WHEREIN IT HAS BEEN MENTIONED THAT SHRI JOHN YOSHIMURA WAS RESPONSIBLE FOR ADVISING ON VARIOUS PERFORMANCES/REVIEW OF INDIAN PARTNERS. MOREOVER, SPECIFIC DATES OF PHYSICAL PRESENCE OF SHRI JOHN YOSHIMURA IN INDIA ARE EXHIBITED AT PAGES 1417, 1419 AND 1420 OF THE PAPER BOOK. 20. CONSIDERING THE COST ALLOCATION CHART EXHIBITED ELSEWHERE SUPPORTED BY EVIDENCES PLACED AS EXHIBITS IN THE PAPER BOOK, WE DO NOT FIND ANY MERIT IN THE TRANSFER PRICING ADJUSTMENTS MADE BY DRP/TP/ASSESSING OFFICER ON THIS COUNT AND THE SAME IS DIRECTED TO BE DELETED. 14 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. 8. SINCE THE FACTS OF THE IMPUGNED ASSESSMENT YEAR ARE IDENTICAL TO THE FACTS OF THE CASE DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE, THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL, WE DIRECT THE A.O./TPO TO DELETE THE ADDITION. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 8.1. SINCE THE ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE BY DELETING 50% OF DISALLOWANCE SUSTAINED BY THE LD. CIT(A), THEREFORE, IN VIEW OF THE ORDER OF THE TRIBUNAL, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN DELETING THE ADJUSTMENT ON ACCOUNT OF PAYMENT OF INTRA GROUP SERVICE TO A.E. GROUND NOS. 1 TO 3 OF THE APPEAL OF THE REVENUE ARE ACCORDINGLY DISMISSED. 9. GROUND NO.4 OF THE REVENUE RELATES TO THE ORDER OF THE LD. CIT(A) IN EXCLUDING THE REIMBURSEMENT PAYMENT FROM THE OPERATING COST. 15 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. 9.1. FACTS OF THE CASE, IN BRIEF, ARE THAT THE TPO DURING THE TP ASSESSMENT PROCEEDINGS, DID NOT CONCUR WITH THE ANALYSIS UNDERTAKEN IN THE TP DOCUMENTATION IN RELATION TO INTERNATIONAL TRANSACTION RELATING TO PROVISION OF MANAGEMENT CONSULTANCY SERVICES PROVIDED TO AES AND REIMBURSEMENT OF EXPENSES FROM AES. 9.2. THE TPO IN HIS ORDER UNDER SECTION 92CA(3) HAS UNDERTAKEN THE FOLLOWING APPROACH IN RESPECT OF THESE INTERNATIONAL TRANSACTIONS :- A) HE DID NOT AGREE WITH THE MULTIPLE YEAR DATA USED IN THE TP DOCUMENTATION IN RELATION TO COMPARABLE COMPANIES AND WAS OF THE VIEW THAT THE FINANCIAL INFORMATION OF COMPARABLE COMPANIES PERTAINING TO FY 2008-09 SHOULD ONLY BE USED. B) HE APPLIED CERTAIN FILTERS (IN ADDITION TO THOSE APPLIED IN THE TP DOCUMENTATION) TO REJECT/ACCEPT CERTAIN COMPARABLES WHICH ARE AS UNDER:- - REJECTED COMPANIES WHOSE SALES IS LESS THAN RS.5 CRORES; 16 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. - REJECTED COMPANIES HAVING DIMINISHING REVENUES FOR THE LAST THREE YEARS UPTO AND INCLUDING F.Y. 2008- 09; - REJECTED COMPANIES HAVING DIFFERENT ACCOUNTING YEAR OTHER THAN APRIL TO MARCH; AND - REJECTED COMPANIES THAT ARE FUNCTIONALLY DIFFERENT FROM THE ASSESSEE. C) THE ABOVE APPROACH OF THE TPO RESULTED IN EXCLUSION OF FIVE OUT OF SEVEN COMPANIES SELECTED AS COMPARABLE BY THE ASSESSEE. D) THEREAFTER, THE TPO SELECTED FIVE ADDITIONAL COMPANIES BEING COMPARABLE TO THE ASSESSEE BASED ON THE ACCEPT/REJECT MATRIX. E) THE TPO ACCORDINGLY DETERMINED THE ALP OF THE COMPARABLE COMPANIES AT 24.05% ON OPERATING COST AND PROPOSED AN UPWARD ADJUSTMENT OF RS.61,08,740/-. 9.3. THE TPO BY RELYING ON VARIOUS DECISIONS HELD THAT REIMBURSEMENT OF PAYMENT INCURRED FOR RENDERING SERVICES 17 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. WOULD BE PART AND PARCEL IN THE PROCESS OF RENDERING SERVICES AND WOULD FALL WITHIN THE SCOPE OF EXPENDITURE FOR SERVICES. HE, THEREFORE, HELD THAT THE EXPENDITURE INCURRED BY THE ASSESSEE AMOUNTING TO RS.78,90,448/- ARE REQUIRED TO BE CONSIDERED FOR APPLYING MARK-UP AND CONSEQUENTLY FOR THE PURPOSE OF COMPUTING THE ARMS LENGTH PRICE. THE A.O. ACCORDINGLY MADE ADDITION OF RS.61,08,740/- BEING ADJUSTMENT OF THE PRICE SHOWN BY THE TAX-PAYER UNDER SECTION 92CA AS PER THE FOLLOWING CALCULATION : 9.4. IN APPEAL, THE LD. CIT(A) PARTLY DELETED BY ACCEPTING FOUR COMPARABLES OF TPO AND THREE COMPARABLES 18 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. OF THE ASSESSEE AND ACCORDINGLY, ADJUSTMENT OF RS.38,13,886/- WAS DELETED BY THE LD. CIT(A) AND BALANCE ADJUSTMENT OF RS.22,94,854/- WAS CONFIRMED. 9.5. AGGRIEVED WITH SUCH ORDER OF THE LD. CIT(A) IN GIVING PART RELIEF TO THE ASSESSEE, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 9.6. THE LD. D.R. HEAVILY RELIED ON THE ORDER OF THE A.O./TPO. 10. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, SUBMITTED THAT AGAINST THE PART-SUSTENANCE BY THE LD. CIT(A), THE ASSESSEE PREFERRED AN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL PASSED THE ORDER EXCLUDING TWO COMPARABLES SELECTED BY THE TPO WITH A DIRECTION TO THE TPO TO VERIFY THE OTHER COMPARABLES. HE SUBMITTED THAT REVENUE IN ITS APPEAL HAS NOT RAISED ANY ISSUE TO THE COMPARABLES SELECTED BY THE LD. CIT(A) AND THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) IS NOT JUSTIFIED IN REDUCING THE REIMBURSEMENT PAYMENTS FROM THE OPERATING COST. HE 19 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. SUBMITTED THAT THE ASSESSEE HAS RIGHTLY EXPLAINED THE NATURE OF THESE TRANSACTIONS TO PROVE THAT THESE PAYMENTS SHALL NOT BE CONSIDERED AS OPERATING COST. THE LEARNED COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) WHICH READ AS UNDER: 1.3. IN THIS RESPECT, THE APPELLANT RESPECTFULLY SUBMITS BEFORE YOUR HONOUR THAT THE LD. TPO, WHILE ASCERTAINING THE NCP MARGIN OF THE TESTED PARTY (I.E. THE APPELLANT) HAS INCORRECTLY INCLUDED THE THIRD PARTY PASS THROUGH COSTS (WHICH WERE ACTUALLY OUT OF POCKET EXPENSES INCURRED ON BEHALF OF CUSTOMERS AND REIMBURSED BY THIRD PARTY CLIENTS ON A COST TO COST BASIS) AMOUNTING TO RS. 7,890,448 IN ITS COMPUTATIONS. THIS HAS LED TO A REDUCTION IN THE APPELLANTS ACTUAL NCP MARGIN OF 11.19% TO 9.02%. A SNAPSHOT OF THE NCP MARGIN WORKING HAS BEEN PROVIDED BELOW FOR YOUR READY REFERENCE : 20 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. PARTICULARS NCP MARGIN (AS PER APPELLANT) NCP MARGIN (AS COMPUTED BY THE LD. TPO IN THE TP ORDER) INCOME FROM SERVICES 36,422,880 36,422,880 ADD: RECOVERIES - 7,890,448 OPERATING INCOME (A) 36,422,880 44,313,328 TOTAL EXPENDITURE 32,756,120 32,756,120 ADD: RECOVERIES -- 7,890,448 OPERATING EXPENSES (B) 32,756,120 40,646,568 OPERATING PROFIT [ (C) = (A) (B) ] 3,666,760 3,666,760 OP/TC [ (D) = (C)/(B) ] 11.19% 9.02% 1.4. THE APPELLANT SUBMITS THAT THESE COSTS WERE ON ACCOUNT OF CERTAIN OUT-OF-POCKET EXPENSES WHICH WERE INCURRED BY THE APPELLANT ON BEHALF OF ITS OVERSEAS AES FOR ADMINISTRATIVE EXPEDIENCY AND CONVENIENCE, WHICH WERE SUBSEQUENTLY RECOVERED BY THE APPELLANT FROM ITS OVERSEAS AES ON A COST-TO-COST BASIS. 1.5. THESE EXPENSES ARE MAINLY IN THE NATURE OF TRAVEL AND OTHER EMPLOYEE RELATED EXPENSES. IT IS ESSENTIAL TO NOTE THAT WHILE INCURRING THESE OUT-OF-POCKET 21 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. EXPENSES, THERE IS NEITHER AN ELEMENT OF PROVISION OF SERVICES NOR AN INTENTION OF PROVIDING ANY DIRECT OR PROXIMATE BENEFIT TO EITHER OF THE PARTIES. IT IS ALSO IMPERATIVE TO NOTE THAT THE APPELLANT IS NOT IN THE BUSINESS OF PROVIDING THESE KIND OF FACILITY/ ADMINISTRATION SERVICES (SUCH AS ARRANGING FOR TRAVELLING, BOARDING, LODGING, ETC). ACCORDINGLY, NO VALUE ADDING ACTIVITY IS UNDERTAKEN BY THE APPELLANT FOR ITS AES WHILE INCURRING THESE EXPENSES AND THEREFORE ONLY A COST TO COST RECOVERY OF THE SAME IS SOUGHT FROM THE AES. IN OTHER WORDS, A PROFIT MARK-UP IS NOT WARRANTED ON THESE EXPENSES. 1.6. THESE OUT OF POCKET EXPENSES ARE ESSENTIALLY IN THE NATURE OF PASS THROUGH COSTS THAT DO NOT WARRANT A PROFIT MARK-UP. THIS STANCE OF THE APPELLANT IS ALSO SUPPORTED BY THE OECD GUIDELINES WHICH STATE THE FOLLOWING : 1.7. WHEN AN ASSOCIATED ENTERPRISE IS ACTING ONLY AS AN AGENT OR INTERMEDIARY IN THE PROVISION OF 22 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. SERVICES, IT IS IMPORTANT IN APPLYING THE COST PLUS METHOD THAT THE RETURN OR MARK-UP IS APPROPRIATE FOR THE PERFORMANCE OF AN AGENCY FUNCTION RATHER THAN FOR THE PERFORMANCE OF THE SERVICES THEMSELVES. IN SUCH A CASE, IT MAY NOT BE APPROPRIATE TO DETERMINE ARMS LENGTH PRICING AS A MARK-UP ON THE COST OF THE SERVICES BUT RATHER ON THE COSTS OF THE AGENCY FUNCTION ITSELF, OR ALTERNATIVELY, DEPENDING ON THE TYPE OF COMPARABLE DATA BEING USED, THE MARK-UP ON THE COST OF SERVICES SHOULD BE LOWER THAN WOULD BE APPROPRIATE FOR THE PERFORMANCE OF THE SERVICES THEMSELVES. FOR EXAMPLE, AN ASSOCIATED ENTERPRISE MAY INCUR THE COSTS OF RENTING ADVERTISING SPACE ON BEHALF OF GROUP MEMBERS, COSTS THAT THE GROUP MEMBERS WOULD HAVE INCURRED DIRECTLY HAD THEY BEEN INDEPENDENT. IN SUCH A CASE, IT MAY WELL BE APPROPRIATE TO PASS ON THESE COSTS TO THE GROUP RECIPIENTS WITHOUT A MARK-UP, AND TO APPLY A MARK-UP ONLY TO THE COSTS INCURRED BY THE INTERMEDIARY IN PERFORMING ITS AGENCY FUNCTION. 23 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. 1.8. IN CONTEXT OF THE PRESENT CASE, WHAT THE ABOVE GUIDANCE HIGHLIGHTS IS THAT IN APPLYING THE COST PLUS METHOD, IT IS IMPORTANT TO ENSURE THAT THE ARMS LENGTH PROFIT MARK UP IS CHARGED ON THE VALUE ADDING COSTS INCURRED BY THE SENDEE PROVIDER IN RENDERING THE SENDEES AND NOT ON THE OUT OF POCKET / PASS THROUGH COSTS THAT BY THEMSELVES DO NOT ADD ANY VALUE AND DO NOT CONTAIN ANY ELEMENT OF PROVISION OF A SERVICE BUT ARE MERELY INCURRED BY THE SERVICE PROVIDER FOR ADMINISTRATIVE EXPEDIENCY AND CONVENIENCE. 10.1. HE SUBMITTED THAT THE STAND OF THE ASSESSEE IS ALSO SUPPORTED BY THE DECISION OF COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS., CHEIL COMMUNICATIONS INDIA PVT. LTD., ITA.NO.712/DEL./2010 AND VARIOUS OTHER DECISIONS AS MENTIONED IN THE PAPER BOOK. HE SUBMITTED THAT THE LD. CIT(A) HAS GIVEN WELL REASONED FINDING IN HIS ORDER TO ADDRESS THIS ISSUE. THEREFORE, THE SAME BEING IN CONSONANCE WITH LAW, SHOULD BE UPHELD AND THE GROUND RAISED BY THE REVENUE SHOULD BE DISMISSED. 24 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. 11. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDER OF THE A.O. AND THE LD. CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE A.O./TPO IN THE INSTANT CASE MADE ADJUSTMENT OF RS.61,08,740/- ON ACCOUNT OF MANAGEMENT CONSULTANCY SERVICES BY APPLYING TNMM METHOD AND TAKING INTO CONSIDERATION FIVE COMPARABLES SELECTED BY THE ASSESSEE AND FIVE NEW COMPARABLES SELECTED BY THE TPO. WE FIND IN APPEAL, THE LD. CIT(A) PARTLY DELETED THE ADJUSTMENT BY ACCEPTING FOUR COMPARABLES OF TPO AND THREE COMPARABLES OF ASSESSEE AND ACCORDINGLY, ADJUSTMENT OF RS.38,13,886/- WAS DELETED BY THE LD. CIT(A) AND BALANCE ADJUSTMENT OF RS.22,92,854/- WAS CONFIRMED. WE FIND AGAINST THE PART SUSTENANCE BY THE LD. CIT(A) THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE ITA.NO.7722 & 7723/DEL./2017 ORDER DATED 25.02.2020 FOR THE A.YS. 2009-2010 AND 2010-2011 RESTORED THE ISSUE TO THE FILE OF A.O./TPO WITH A DIRECTION TO VERIFY THE ANALYSIS DONE BY THEM IN SUBSEQUENT YEARS AND FIND-OUT AS TO WHETHER THIS 25 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. COMPANY IS FUNCTIONALLY SIMILAR OR DISSIMILAR TO THAT OF THE ASSESSEE COMPANY AND DECIDE THE ISSUE AS PER FACT AND LAW BY OBSERVING AS UNDER : 20.10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE LD. COUNSEL FOR THE ASSESSEE IS BASICALLY CHALLENGING THE INCLUSION OF THE THREE COMPANIES, NAMELY, WAPCOS LTD. (SEG.); ANTRIX CORPORATION LTD.; AND EDSERV SOFTSYSTEMS LTD. FROM THE LIST OF COMPARABLES. SO FAR AS ANTRIX CORPORATION LTD. AND WAPCOS LTD. (SEG.) ARE CONCERNED, BOTH THESE COMPANIES ARE GOVERNMENT OF INDIA UNDERTAKINGS. WHILE ANTRIX CORPORATION LTD., IS UNDER THE ADMINISTRATIVE CONTROL OF THE DEPARTMENT OF SPACE AND IS THE COMMERCIAL ARM OF INDIAN SPACE RESEARCH ORGANISATION AND INVOLVED IN BUILDING SATELLITES, WAPCOS 26 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. LTD. IS A MINI RATNA PUBLIC SECTOR ENTERPRISE UNDER THE AEGIS OF UNION MINISTRY OF WATER RESOURCES AND PROVIDES SERVICES IN ALL FACETS OF WATER RESOURCES, POWER AND INFRASTRUCTURE SECTORS IN INDIA AND ABROAD. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. THYSSEN KRUPP INDUSTRIES INDIA (P) LTD., HAS HELD THAT PUBLIC SECTOR UNDERTAKINGS ARE NOT DRIVEN BY PROFIT MOTIVE ALONE, BUT, SUCH OTHER CONSIDERATIONS ALSO WEIGH SUCH AS DISCHARGE OF SOCIAL OBLIGATIONS, ETC., AND HENCE, THEY CANNOT BE CONSIDERED AS COMPARABLE WITH THE PRIVATE COMPANIES. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE HONBLE BOMBAY HIGH COURT AND OBSERVING THAT WAPCO LTD AND ANTRIX CORPORATION LTD. ARE GOVERNMENT OF INDIA UNDERTAKINGS, WE HOLD THAT THESE TWO COMPANIES CANNOT BE HELD AS COMPARABLE WITH THE ASSESSEE COMPANY AND ARE TO BE REJECTED. SO FAR AS EDSERV SOFTSYSTEMS LTD. 27 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. IS CONCERNED, IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE TPO, IN THE SUCCEEDING YEARS HAS NOT CONSIDERED THIS COMPANY AS A FUNCTIONALLY COMPARABLE COMPANY AND HAS AGREED WITH THE ASSESSEE IN CONSIDERING THE COMPANY AS A FUNCTIONALLY NON-COMPARABLE. WE, THEREFORE, DEEM IT PROPER TO RESTORE THIS ISSUE TO THE FILE OF THE AO/TPO WITH A DIRECTION TO VERIFY THE ANALYSIS DONE BY THEM IN SUBSEQUENT YEARS AND FIND OUT AS TO WHETHER THIS COMPANY IS FUNCTIONALLY SIMILAR OR DISSIMILAR TO THAT OF THE ASSESSEE COMPANY AND DECIDE THE ISSUE AS PER FACT AND LAW. THE GROUND OF APPEAL NO.4 RAISED BY THE ASSESSEE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 11.1. SINCE THE APPEAL FILED BY THE ASSESSEE ON THIS ISSUE IS RESTORED TO THE FILE OF A.O./TPO, THEREFORE, IN ALL FAIRNESS, THIS ISSUE ALSO SHOULD GO BACK TO THE FILE OF A.O./TPO FOR FRESH ADJUDICATION IN ACCORDANCE WITH FACT AND 28 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. LAW AND AFTER GIVING DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. GROUND NO.4 RAISED BY THE REVENUE IS ACCORDINGLY ALLOWED FOR STATISTICAL PURPOSES. 12. GROUND NO.5 BEING GENERAL IN NATURE NEEDS NO ADJUDICATION. THEREFORE, THE SAME IS DISMISSED. 13. IN THE RESULT, ITA.NO.7887/DEL./2017 OF THE REVENUE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA.NO.7888/DEL./2017 A.Y. 2010-2011 [REVENUE] : 14. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN LAW TO DELETE THE ADDITIONS MADE BY THE TPO AND HOLD THAT THE PAYMENT MADE FOR INTRA GROUP SERVICES WAS FOR COMMERCIAL EXPEDIENCY? 29 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN LAW IN HOLDING THAT THE TPO HAS RE-CHARACTERIZED THE INTER GROUP SERVICES TRANSACTION? 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN LAW IN NOT APPRECIATING THAT TPO HAS NOT DISALLOWED THE INTRA GROUP SERVICES MERELY ON THE ISSUE OF NON- SUBSTANTIATION OF COMMERCIAL EXPEDIENCY BY THE ASSESSEE BUT ON SEVERAL FACTORS? 4. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, LD. CIT(A) WAS JUSTIFIED IN LAW TO EXCLUDE THE REIMBURSEMENT PAYMENT FROM THE OPERATING COST NOT APPRECIATING THE FACT THAT THESE REIMBURSEMENT PAYMENT WOULD ATTRACT WITHHOLDING TAX U/S 195 OF THE INCOME TAX ACT? 5. THE APPELLANT CRAVES TO LEAVE TO ADD, MODIFY, AMEND OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OF, OR BEFORE, THE HEARING OF THE APPEAL. 30 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. 14.1. GROUND NOS.1 TO 3 OF THE APPEAL RAISED BY THE REVENUE RELATES TO ADJUSTMENT OF PAYMENT MADE FOR INTRA GROUP SERVICES TO AE. 14.2. AFTER HEARING BOTH THE SIDES, WE FIND GROUND NUMBERS.1 TO 3 ARE IDENTICAL TO THE GROUNDS RAISED IN ITA.NO.7887/DEL./ 2017 FOR THE A.Y. 2009-2010. WE HAVE ALREADY DECIDED THE ISSUE IN THE FOREGOING PARAS AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. FOLLOWING THE SAME REASONS, THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 15. SO FAR AS GROUND NO.4 RAISED BY THE REVENUE IS CONCERNED, IT WAS POINTED-OUT AT THE TIME OF HEARING BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT NO SUCH ADJUSTMENT HAS BEEN MADE BY THE REVENUE ON THIS ISSUE AND THIS GROUND IS TAKEN ON THE BASIS OF THE GROUND TAKEN IN PRECEDING ASSESSMENT YEAR. SINCE, NO ADDITION HAS BEEN MADE FOR THE REIMBURSEMENT OF PAYMENT, THEREFORE, GROUND NO.4 RAISED BY THE REVENUE BEING INFRUCTUOUS IS DISMISSED. 31 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. 16. GROUND NO.5 BEING GENERAL IN NATURE NEEDS NO ADJUDICATION AND THE SAME IS ACCORDINGLY DISMISSED. 17. IN THE RESULT, ITA.NO.7888/DEL./2017 OF THE REVENUE IS DISMISSED. 18. BEFORE PARTING WITH THIS ORDER, IT IS TO BE MENTIONED THAT BOTH THE ASSESSEE AND REVENUE HAD FILED APPEALS BEFORE THE TRIBUNAL AGAINST THE PART RELIEF GRANTED BY THE LD. CIT(A). ALTHOUGH, THE CROSS-APPEALS SHOULD HAVE BEEN HEARD TOGETHER, HOWEVER, AT THE TIME OF HEARING OF THE APPEAL FILED BY THE ASSESSEE NEITHER OF THE PARTIES BROUGHT TO THE NOTICE OF THE BENCH THAT THE REVENUE HAS ALSO FILED AN APPEAL, FOR WHICH, THE APPEALS FILED BY THE REVENUE WERE NOT HEARD ALONG WITH THE APPEAL FILED BY THE ASSESSEE. IT IS DESIRED THAT IN FUTURE, IT SHOULD BE KEPT IN MIND BY BOTH THE SIDES TO POINT-OUT TO THE BENCH IF ANY CROSS- OBJECTIONS/APPEALS ARE FILED. 19. TO SUM-UP, ITA.NO.7887/DEL./2017 OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES AND ITA.NO.7888/DEL./2017 OF THE REVENUE IS DISMISSED. 32 ITA.NOS.7887 & 7888/DEL./2017 M/S. AT KEARNEY LIMITED, GURGAON. ORDER PRONOUNCED IN THE OPEN COURT ON .09.2021. SD/- SD/- (KUL BHARAT) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER DELHI, DATED 14 TH SEPTEMBER, 2021 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT I - 1 BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.