TIBCO Software India Private Limited, Pune V. Deputy Commissioner of Income-tax,

ITA 94/PUN/2014

• Counselvise Citation: 9424514 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 13-01-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SANDEEP GARG
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Business income; Transfer pricing; Opportunity of being heard; Principle of natural justice; International transaction
• Section: 143(3); 92B; 10B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.94/PN/2014 (ASSESSMENT YEAR : 2009-10) TIBCO SOFTWARE (INDIA) PVT. LTD., BINARIUS FLOOR NO.2 & 3, DEEPAK COMPLEX, NATIONAL GAMES ROAD, SHASTRI NAGAR, YERWADA, PUNE 411 006. PAN : AACCT6136F . APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(2), PUNE. . RESPONDENT APPELLANT BY : MR. ASHWANI TANEJA RESPONDENT BY : MR. SANDEEP GARG, CIT DATE OF HEARING : 16-03-2015 DATE OF PRONOUNCEMENT : 10-04-2015 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL HAS BEEN PREFERRED BY THE ASSE SSEE PERTAINING TO THE ASSESSMENT YEAR 2009-10, WHICH IS DIRECTED AGAI NST THE ORDER OF THE DY. COMMISSIONER OF INCOME TAX, CIRCLE 1(2), PUNE ( IN SHORT THE ASSESSING OFFICER) PASSED U/S 143(3) R.W.S. 144C(1) OF THE I NCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 10.12.2013, WHICH IS IN CONFORMITY WITH THE DIRECTIONS GIVEN BY THE DISPUTE RESOLUTION PANEL, PUNE (IN SHO RT THE DRP) DATED 09.12.2013. 2. IN THIS APPEAL, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE READ AS UNDER: - GROUND NO.1: TRANSFER PRICING ADJUSTMENT THE LEARNED ASSESSING OFFICER ('LD.AO) PURSUANT TO THE DIRECTIONS OF THE HON'BLE DISPUTE RESOLUTION PANEL ('DRP) ERRED IN R EJECTING THE BENCHMARKING APPROACH ADOPTED BY THE APPELLANT AND THEREBY MAKIN G A TRANSFER PRICING ITA NO.94/PN/2014 ADJUSTMENT OF RS.3,61,96,655/- TO THE INCOME OF THE APPELLANT BY HOLDING THAT THE INTERNATIONAL TRANSACTION OF PROVISION OF SOFTW ARE DEVELOPMENT SERVICES OF THE APPELLANT DOES NOT SATISFY THE AIM'S LENGTH PRI NCIPLE ENVISAGED UNDER THE INCOME-TAX ACT, 1961 ('THE ACT'). GROUND NO.2: ERRONEOUS TREATMENT OF FOREIGN EXCHANG E GAIN/LOSS THE LD. AO/LD. TRANSFER PRICING OFFICER (LD.TPO ) ERRED IN CONSIDERING FOREIGN EXCHANGE LOSS/GAIN AS OPERATING COST/INCOME WHILE COMPUTING THE OPERATING MARGINS OF THE COMPARABLES FOR COMPUT ATION OF THE ARM'S LENGTH PRICE OF THE TRANSACTION OF PROVISION OF SOF TWARE DEVELOPMENT SERVICE. THE HONBLE DRP ERRED IN INTERPRETING THE APPELLANT S OBJECTION TOWARDS TREATMENT OF FOREIGN EXCHANGE GAIN/LOSS AS OBJECTIO N TO CONSIDER FOREIGN EXCHANGE GAIN/LOSS AS OPERATING, WHEREAS TH E APPELLANT HAD OBJECTED TO THE TREATMENT OF THE SAME AS OPERATING ITEM, AS CONSIDERED BY THE LD.AO/LD. TPO. IN DOING SO, THE HONBLE DRP ERRED IN CONFIRMING THE TRANSFER PRICING ADJUSTMENT, THOUGH IT HAS IN-PRINCIPLE AGREED TO THE OBJECTION OF THE APPELLANT THAT FOREI GN EXCHANGE GAIN/LOSS SHOULD BE CONSIDERED AS NON-OPERATING ITE MS WHILE COMPUTING THE OPERATING MARGINS. GROUND NO.3: ERROR IN NOT GIVING EFFECT TO THE DRP DIRECTIONS IN RESPECT OF CONDUCTING WORKING CAPITAL ADJUSTMENT TO OPERATI NG MARGIN OF GOLDSTONE TECHNOLOGIES LTD. (GOLDSTONE). THE LD. AO ERRED IN COMPUTING THE TRANSFER PRICING ADJUSTMENT WITHOUT GIVING EFFECT TO THE DRP DIRECTIONS WHICH SPECIFICALLY DIR ECTED THE LD.AO/TPO TO RE- ARRIVE AT THE OPERATING MARGIN OF GOLDSTONE AFTER C ONDUCTING WORKING CAPITAL ADJUSTMENT, WHICH WAS ERRONEOUSLY NOT COMPUTED BY T HE LD.TPO, THOUGH THE OPERATING MARGINS OF OTHER COMPARABLES WERE CONSIDE RED AFTER CONDUCTING THE WORKING CAPITAL ADJUSTMENT. GROUND NO.4: ERRONEOUS ADDITION/REJECTION OF CERTAI N COMPARABLES THE HONBLE DRP/LD.AO/LD.TPO ERRED IN MODIFYING THE SET OF COMPARABLE COMPANIES IDENTIFIED BY THE APPELLANT IN ITS TRANSF ER PRICING STUDY REPORT FOR PROVISION OF SOFTWARE DEVELOPMENT SERVICES. IN DOI NG SO, HONBLE DRP/LD.AO/LD.TPO SPECIFICALLY ERRED IN: 4.1. CONSIDERING AND RETAINING THE FUNCTIONALLY INC OMPARABLE FCS SOFTWARE SOLUTIONS LIMITED (FCS) AS COMPARABLE, DESPITE TH E FACT THAT THE APPELLANT HAD DEMONSTRATED THAT FCS IS: ENGAGED IN NON COMPARABLE SERVICE ACTIVITIES, I.E. IT ENABLED SERVICE ACTIVITIES WHEREAS THE TRANSFER PRICING ADJUSTMENT IS TO THE SOFTWARE DEVELOPMENT SERVICES SEGMENT OF THE APPELLANT; AND A COMPANY HAVING HIGH QUANTUM OF BRANCH EXPENSES, WHICH IS A REJECTION CRITERIA APPLIED BY THE LD.TPO HIMSELF WH ILE FINALIZING THAT THE SET OF COMPARABLES FOR SOFTWARE DEVELOPMENT SERVICE S SEGMENT OF THE APPELLANT; 4.2. CONSIDERING RETAINING THE FUNCTIONALLY INCOMPA RABLE APPLICATION SOFTWARE SEGMENT OF KALS INFORMATION SYSTEMS LIMITE D (KALS) AS COMPARABLE, DESPITE THE FACT THAT THE APPELLANT HAD DEMONSTRATED THAT KALS: OWN SOFTWARE PRODUCTS WHICH CANNOT BE CONSIDERED CO MPARABLE TO THE FUNCTIONAL AND ASSET PROFILE OF THE APPELLANT; ITA NO.94/PN/2014 HAS REPORTED ERRONEOUS SEGMENTAL FINANCIAL INFORMAT ION IN ITS ANNUAL REPORT, WHICH WAS CONSIDERED BY THE LD. TPO; AND HAS BEEN REJECTED BY THE JURISDICTIONAL PUNE BENCH OF THE HONBLE ITAT IN THE CASE OF PTC SOFTWARE (INDIA) LTD. [ITA NO.16 05/PN/2011 (AY 2007-08) AND ITA NO.1346/PN/2010 (AY 2006-07)] AND BINDVIEW (INDIA) PVT. LTD. (ITA NO.1386/PN/2010) ON ACCOUNT OF SIMILAR REASONS; 4.3. REJECTING THE FUNCTIONALLY COMPARABLE E-INFOCH IPS LTD., WHICH WAS DULY APPROVED AS A COMPARABLE BY THE HONBLE DRP FOR THE AY 2008-09, ON THE BASIS OF ERRONEOUS REASONING THAT THE YEAR UNDE R CONSIDERATION IS AN EXCEPTIONAL YEAR BASED ON ITS FINANCIAL RESULTS; 4.4. REJECTING THE FUNCTIONALLY COMPARABLE AVANI CI MCON TECHNOLOGIES LTD. (AVANI), BASED ON ERRONEOUS REASON, I.E. UNAVAILA BILITY OF AUDITED ANNUAL ACCOUNTS FOR THE FINANCIAL YEAR (FY) 2008- 09, DESPITE THE FACT THAT THE AVAILABLE AUDITED FINANCIALS FOR FY 2009-0 10 HAD ALL THE FINANCIAL DETAILS PERTAINING TO FY 2008-09; 4.5. REJECTING THE FUNCTIONALLY COMPARABLE SOFTWARE SERVICES SEGMENT OF SASKEN COMMUNICATIONS LTD., ON THE ERRONEOUS BASIS OF BUSINESS RESTRUCTURING OF ITS NON COMPARABLE SEGMENT; 4.6. REJECTING THE FOLLOWING FUNCTIONALLY COMPARABL E COMPANIES BY APPLYING THE TURNOVER FILTER OF RS.2 TO RS.200 CRORES, WITHO UT GIVING ANY OPPORTUNITY TO THE APPELLANT, OF BEING HEARD: PERSISTENT SYSTEMS LTD., IT SERVICES SEGMENT OF MINDTREE LTD., AND LARSEN AND TOUBRO INFOTECH LTD.; 4.7. REJECTING A FUNCTIONALLY COMPARABLE RS SOFTWAR E LTD. BASED ON EARLIER YEARS DISPOSITION BY THE HONBLE DRP, WITHOUT COND UCTING ANY ANALYSIS FOR THE YEAR UNDER CONSIDERATION, DESPITE THE FACT THAT IT WAS ACCEPTED AS A COMPARABLE IN BOTH THE SHOW CAUSE NOTICES (SC NS) ISSUED BY THE LD.TPO DURING THE COURSE OF THE ASSESSMENT PROC EEDINGS; 4.8. REJECTING THE FOLLOWING FUNCTIONALLY COMPARABL E COMPANIES ON ACCOUNT OF THE QUANTUM OF ONSITE REVENUES, HOWEVER SIMPLY I GNORING THE FACT THAT THE APPELLANT IS ALSO REQUIRED TO RENDER SERVI CES ON AN ONSITE BASIS: AKSHAY SOFTWARE TECHNOLOGIES LTD., ZYLOG SYSTEMS LTD., AND THINKSOFT GLOBAL SERVICES LTD.; AND 4.9. REJECTING THE FUNCTIONALLY COMPARABLE HELIOS A ND MATHESON LTD. ON THE ERRONEOUS BASIS THAT THE ANNUAL ACCOUNTS COVER THE PERIOD OF 18 MONTHS WHEREAS THE COMPARABLE DATA SHOULD BE FOR 12 MONTHS FOR RELIABLE COMPARABILITY. GROUND NO.5: ERRONEOUS REJECTION OF ECONOMIC ADJUST MENT FOR DIFFERENCE IN LEVELS OF RISKS HONBLE DRP/LD.AO ERRED IN NOT ALLOWING AN ADJUSTME NT FOR THE DIFFERENCE BETWEEN THE LEVEL OF RISK BORNE BY THE COMPARABLE A ND THE APPELLANT, DESPITE THE FACT THAT THE APPELLANT HAS DEMONSTRATED THESE DIFFERENCES BY SUBMITTING A DETAILED ANALYSIS OF FUNCTIONS PERFORMED, ASSETS EM PLOYED AND RISKS ASSUMED (FAR ANALYSIS) BEFORE THE HONBLE DRP. I N DOING SO, HONBLE DRP/LD.AO ERRED IN: ITA NO.94/PN/2014 FAILING TO APPRECIATE THAT THE APPELLANT IS A ROUTI NE CAPTIVE SERVICE PROVIDER AS AGAINST THE SELECTED COMPARABLE COMPANI ES, WHICH INCLUDE ENTREPRENEURIAL COMPANIES AND HENCE AN ADJUSTMENT I S NECESSARY; AND DISREGARDING THE PROVISIONS OF RULE 10B(1)(E)(III), 10B(2) AND 10B(3) READ WITH RULE 10C OF THE INCOME-TAX RULES, 1962 ( THE RULES). GROUND NO.6: NOT ALLOWING THE USE OF MULTIPLE YEAR DATA HONBLE DRP/LD.AO ERRED IN NOT ALLOWING THE USE OF MULTIPLE YEAR DATA AS PRESCRIBED UNDER RULE 10B(4) OF THE RULES AND DETER MINING THE ARM'S LENGTH PRICE ON THE BASIS OF FINANCIAL INFORMATION OF THE COMPARABLES FOR THE PREVIOUS YEAR 2007-08 WHICH WAS AVAILABLE IN THE PUBLIC DOMA IN AT THE TIME OF ASSESSMENT PROCEEDINGS BUT NOT AT THE TIME WHEN THE APPELLANT CONDUCTED ITS ANALYSIS TO COMPLY WITH THE PROVISIONS OF RULES 10B (4) AND 10D(4) OF THE RULES. GROUND NO.7: IGNORING THE FACT THAT THE APPELLANT I S ENTITLED TO TAX HOLIDAY UNDER SECTION 10A OF THE ACT HONBLE DRP/LD.AO ERRED IN IGNORING THE FACT THAT T HE APPELLANT IS ENTITLED TO TAX HOLIDAY UNDER SECTION 10A OF THE ACT ON ITS PRO FITS DERIVED FROM THE SOFTWARE DEVELOPMENT SERVICES AND THEREFORE WOULD N OT HAVE ANY UNTOWARD MOTIVE OF DERIVING A TAX ADVANTAGE BY MANIPULATING TRANSFER PRICES OF ITS INTERNATIONAL TRANSACTIONS. THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTH ER. YOUR APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, M ODIFY AND/OR SUBSTITUTE, AND TO WITHDRAW THE ABOVE GROUNDS OF APPEAL. 3. IN THIS APPEAL, ASSESSEE HAS RAISED MULTIPLE GRO UNDS OF APPEAL AS AFORESTATED BUT THE SUM AND SUBSTANCE OF THE DISPUT E ARISES FROM AN ADDITION OF RS.3,61,96,655/- MADE TO THE RETURNED INCOME ON ACCOUNT OF DETERMINATION OF THE ARM'S LENGTH PRICE OF ASSESSEES INTERNATION AL TRANSACTIONS ENTERED WITH ITS ASSOCIATED ENTERPRISES. 4. THE APPELLANT IS A COMPANY INCORPORATED UNDER TH E PROVISIONS OF THE COMPANIES ACT, 1956 AND IS A WHOLLY OWNED SUBSIDIAR Y OF TIBCO US. THE ASSESSEE COMPANY IS PRIMARILY ENGAGED IN PROVIDING SOFTWARE RESEARCH AND DEVELOPMENT SERVICES TO TIBCO US AS PER THE DESIGN, PRODUCTION ORDERS, PLANS, PROCESS SPECIFICATION AND PRODUCTION SCHEDUL ES PROVIDED BY THE TIBCO US. THE UNIT OF THE ASSESSEE IS REGISTERED AS A 10 0% EXPORT ORIENTED UNIT (EOU) UNDER THE SOFTWARE TECHNOLOGY PARK OF INDIA ( STPI) SCHEME AND THE PROFITS THEREFROM ARE ELIGIBLE FOR THE BENEFITS OF SECTION 10A OF THE ACT. THE ITA NO.94/PN/2014 ASSESSEE COMPANY WAS FOUND TO HAVE ENTERED INTO THR EE TYPES OF INTERNATIONAL TRANSACTIONS WITH ITS ASSOCIATED ENTERPRISES WITHIN THE MEANING OF SECTION 92B OF THE ACT. SUCH INTERNATIONAL TRANSACTIONS WERE PROVISION OF SOFTWARE DESIGN AND DEVELOPMENT SERVICES; PROVISION OF SALES AND CU STOMER SUPPORT SERVICES; AND, PAYMENT OF INTEREST ON EXTERNAL COMMERCIAL BOR ROWINGS FOR CONSIDERATION OF RS.37,77,70,214/-; RS.6,70,63,155/-; AND, RS.22, 73,832/- RESPECTIVELY. THE ASSESSING OFFICER NOTED THAT ASSESSEE HAD FURNISHED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2009-10 DECLARING AN INCOME OF RS.8 5,91,335/- WHICH, INTER- ALIA, CONTAINED THE AFORESTATED INTERNATIONAL TRANS ACTIONS ENTERED WITH ASSOCIATED ENTERPRISES I.E. TIBCO US. THE ASSESSIN G OFFICER MADE A REFERENCE TO THE TRANSFER PRICING OFFICER (TPO) U/S 92CA(1) OF THE ACT FOR DETERMINING THE ARM'S LENGTH PRICE OF THE INTERNATI ONAL TRANSACTIONS FOR THE PURPOSES OF COMPUTING INCOME FROM SUCH TRANSACTIONS IN TERMS OF SECTION 92(1) OF THE ACT. THE TPO HAS PASSED AN ORDER U/A 92CA(3) OF THE ACT DATED 29.01.2013 IN TERMS OF WHICH HE HAD COMPUTED AN ADJ USTMENT OF RS.3,61,96,665/- TO THE STATED VALUE OF THE INTERNA TIONAL TRANSACTIONS RELATING TO THE PROVISION OF SOFTWARE DESIGN AND DEVELOPMENT SE RVICES IN ORDER TO DETERMINE ITS ARM'S LENGTH PRICE, WHICH IS THE SUBJ ECT-MATTER OF DISPUTE IN THE PRESENT APPEAL. IN SO FAR AS THE OTHER TWO KINDS O F INTERNATIONAL TRANSACTIONS ENTERED BY THE ASSESSEE WITH ITS ASSOCIATED ENTERPR ISES ON ACCOUNT OF (I) PROVISION OF SALES AND CUSTOMER SUPPORT SERVICES; A ND, (II) PAYMENT OF INTEREST ON EXTERNAL COMMERCIAL BORROWINGS ARE CONCERNED, TH E TPO HAS ACCEPTED THE STAND OF THE ASSESSEE THAT THE STATED VALUES OF SUC H TRANSACTIONS ARE AT AN ARM'S LENGTH PRICE. ON THE BASIS OF THE ARM'S LENG TH PRICE DETERMINED BY THE TPO, ASSESSING OFFICER HAS PASSED AN ORDER U/S 143( 3) R.W.S 144C(1) OF THE ACT DATED 10.12.2013 DETERMINING THE TOTAL INCOME O F THE ASSESSEE IN CONFORMITY WITH THE ARM'S LENGTH PRICE SO DETERMINE D BY THE TPO AS MANDATED BY SECTION 92CA(4) OF THE ACT. IT IS ALSO TO BE NO TED THAT THE ASSESSING OFFICER PASSED HIS ORDER DATED 10.12.2013 (SUPRA) AFTER CON SIDERING THE DIRECTIONS OF ITA NO.94/PN/2014 THE DISPUTE RESOLUTION PANEL (IN SHORT THE DRP) D ATED 09.12.2013 WHICH WERE RENDERED IN RESPONSE TO ASSESSEE RAISING OBJEC TIONS TO THE DRAFT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER DA TED 19.03.2013 WHICH WAS ALSO IN LINE WITH THE ORDER OF THE TPO DATED 29 .01.2013 (SUPRA). IN THIS BACKGROUND, THE RIVAL COUNSELS HAVE BEEN HEARD WITH RESPECT TO THE ADDITION OF RS.3,61,96,655/- MADE TO THE RETURNED INCOME ON ACC OUNT OF THE DETERMINATION OF ARM'S LENGTH PRICE. 5. AT THE TIME OF HEARING, IT WAS A COMMON POINT BE TWEEN THE PARTIES THAT THE SUBSTANTIVE ISSUES IN THIS YEAR, WHICH ARISE FR OM THE ORDER OF THE TPO DATED 29.01.2013 (SUPRA) ARE PRIMARILY SIMILAR TO T HOSE CONSIDERED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE IMMEDIA TELY PRECEDING ASSESSMENT YEAR 2008-09 VIDE ITA NO.2536/PN/2012 DA TED 11.02.2015. BEFORE WE PROCEED TO ADJUDICATE THE SPECIFIC DISPUT E RAISED BEFORE US, IT WOULD BE APPROPRIATE TO OBSERVE THAT IN ITS TRANSFER PRIC ING STUDY ASSESSEE HAD BENCHMARKED ITS INTERNATIONAL TRANSACTIONS RELATING TO THE PROVISION OF SOFTWARE DESIGN AND DEVELOPMENT SERVICES ENTERED WITH ITS AS SOCIATED ENTERPRISES BY ADOPTING THE TRANSACTIONAL NET MARGIN (TNM) METHOD. THE ASSESSEE HAD USED OPERATING PROFITS/OPERATING COST (OP/OC) AS TH E PROFIT LEVEL INDICATOR (PLI). THE ASSESSEE COMPARED ITS PLI OF 18.72% WIT H THE ARITHMETIC MEAN OF THE MARGINS OF THE COMPARABLE CASES SELECTED AT 11. 73%; AND, AS ASSESSEES PLI WAS FOUND TO BE HIGHER THAN THE ARITHMETIC MEAN OF THE MARGINS OF THE COMPARABLE CASES, IT WAS CANVASSED BY THE ASSESSEE THAT THE STATED VALUE OF THE INTERNATIONAL TRANSACTIONS OF PROVISION OF SOFT WARE DESIGN AND DEVELOPMENT SERVICES WAS AT AN ARM'S LENGTH PRICE. THE TPO HAS NOT DISPUTED THE ADOPTION OF TNM METHOD AS THE MOST APPROPRIATE METHOD AND HE HAS ALSO NOT DIFFERED WITH THE ADOPTION OF OP/OC AS THE PLI FOR THE PURPO SES OF COMPARABILITY ANALYSIS. SIMILAR WAS THE SITUATION IN THE IMMEDIA TELY PRECEDING ASSESSMENT YEAR 2008-09. FURTHER, THE TPO DISAGREED WITH THE ASSESSEE REGARDING THE ITA NO.94/PN/2014 ADOPTION OF THE PLI OF THE COMPARABLE CASES ON THE BASIS OF THE FINANCIAL DATA OF MULTIPLE YEARS WHICH ACCORDING TO HIM WERE NOT R ELEVANT TO THE PERIOD FOR WHICH ASSESSEES INTERNATIONAL TRANSACTIONS WERE BE ING TESTED. AS PER THE TPO, IT WAS MORE APPROPRIATE TO ADOPT THE FINANCIAL DATA OF THE COMPARABLE CONCERNS FOR THE CONTEMPORANEOUS PERIOD I.E. FOR TH E FINANCIAL YEAR ENDING ON 31.03.2009 FOR THE PURPOSES OF THE COMPARABILITY AN ALYSIS. THOUGH ASSESSEE HAS CONTESTED THE AFORESAID ACTION OF THE TPO BY WA Y OF ABOVESTATED GROUND OF APPEAL NO.6 BUT AT THE TIME OF HEARING THE SAID GROUND OF APPEAL HAS NOT PRESSED AND IS ACCORDINGLY DISMISSED. 6. NEVERTHELESS IN THE COURSE OF TRANSFER PRICING P ROCEEDINGS, ASSESSEE WAS SHOW-CAUSED ON THIS ASPECT AND ON THE BASIS OF THE REVISED SEARCH ASSESSEE SUGGESTED CERTAIN INCLUSIONS AND EXCLUSION S IN THE LIST OF COMPARABLE CONCERNS. THE TPO, AFTER CONSIDERING THE FINANCIAL DATA OF THE COMPARABLE CASES PERTAINING TO THE FINANCIAL YEAR UNDER CONSID ERATION, HAS SELECTED THE FOLLOWING FINAL SET OF COMPARABLES :- SR.NO. COMPANY NAME CORRECTED OP/OC OP/OC AFTER W.C. ADJUSTMENT 1. BODHTREE CONSULTING LTD. 62.29 60.55 2. F C S SOFTWARE SOLUTIONS LTD. 34.63 30.66 3. KALS INFORMATION SYSTEMS LTD. (APPLICATION SOFTWARE SEGMENT) 41.91 40.46 4. L G S GLOBAL LTD. 20.50 14.76 5. GOLDSTONE 3.94 3.94 30.07 7. ON THE BASIS OF THE ABOVE, THE TPO ADOPTED THE A RITHMETIC MEAN OF THE PLI OF THE COMPARABLES AT 31.21% (I.E. AFTER WORKIN G CAPITAL ADJUSTMENT) AND COMPARED IT WITH ASSESSEES PLI OF 18.72% AND ACCOR DINGLY AN ADJUSTMENT OF RS.3,61,96,655/- HAS BEEN MADE TO THE STATED VALUE OF THE INTERNATIONAL TRANSACTIONS IN ORDER TO DETERMINE THE ARM'S LENGTH PRICE. ITA NO.94/PN/2014 8. THE AFORESAID APPROACH OF THE TPO IS QUITE PARI- MATERIA TO THE APPROACH ADOPTED BY HIM IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 (SUPRA). 9. AT THE TIME OF HEARING, IN SO FAR AS THE GROUND OF APPEAL NO.1 IS CONCERNED, NO SPECIFIC ARGUMENTS WERE ADVANCED AS I T IS GENERAL IN NATURE. 10. WITH REGARD TO THE ISSUES RAISED IN GROUND OF A PPEAL NOS.2 AND 3, IT WAS STATED THAT ON BEING APPROACHED BY THE ASSESSEE BY WAY OF A RECTIFICATION APPLICATION, THE DRP HAS PASSED A RECTIFICATION ORD ER AND ISSUED FURTHER DIRECTIONS ON 06.03.2014 AND FOR THE PRESENT THE SA ID GROUNDS OF APPEAL DO NOT REQUIRE ANY ADJUDICATION. IN THIS BACKGROUND, IN SO FAR AS THE GROUND OF APPEAL NOS.2 AND 3 ARE CONCERNED, THEY ARE DISMISSE D AS INFRUCTUOUS. 11. THE SPECIFIC ARGUMENTS PUT-FORTH BEFORE US AT T HE TIME OF HEARING ARE MANIFESTED BY THE GROUND OF APPEAL NO.4 WHICH RELAT ES TO ASSESSEES STAND THAT THE INCOME-TAX AUTHORITIES HAVE ERRED IN ACCEP TING CERTAIN COMPARABLES AND/OR IN REJECTING CERTAIN COMPARABLES WHILE BENCH MARKING THE INTERNATIONAL TRANSACTIONS RELATING TO THE PROVISION OF SOFTWARE DESIGN AND DEVELOPMENT SERVICES TO THE ASSOCIATED ENTERPRISES. AT THE TIM E OF HEARING, ASSESSEE HAD FURNISHED VOLUMINOUS PAPER BOOKS. THE MATERIAL REF ERRED AND RELIED UPON BY THE LD. REPRESENTATIVE FOR THE ASSESSEE HAS BEEN DU LY CONSIDERED BY US WHILE DISPOSING OF THE PRESENT APPEAL. THE LD. CIT-DR AP PEARING FOR THE REVENUE RELIED UPON THE STAND OF THE LOWER AUTHORITIES IN S UPPORT OF THE CASE OF THE DEPARTMENT. 12. BY WAY OF GROUND OF APPEAL NO.4.1, THE PLEA OF THE ASSESSEE IS FOR EXCLUDING FCS SOFTWARE SOLUTIONS LTD. FROM THE FINA L SET OF COMPARABLES. ON THIS ASPECT, THE POINT MADE OUT BY THE ASSESSEE IS THAT THE SAID CONCERN IS ITA NO.94/PN/2014 FUNCTIONALLY DIFFERENT FROM THE ASSESSEE INASMUCH A S THE MAJORITY OF SERVICES RENDERED BY IT ARE IN THE CATEGORY OF IT ENABLED SE RVICES AND THEREFORE IT IS NOT TO COMPARABLE TO ASSESSEES ACTIVITY OF PROVIDING S OFTWARE DESIGN AND DEVELOPMENT SERVICES TO THE ASSOCIATED ENTERPRISES. THE LD. REPRESENTATIVE FOR THE ASSESSEE HAS REFERRED TO PARA 11(XV) OF THE ORDER OF THE TPO TO POINT OUT THAT THE TPO INCLUDED THE SAID CONCERN AS COMPA RABLE PRIMARILY ON THE GROUND THAT THE SAME WAS ALSO INCLUDED BY HIM IN TH E TRANSFER PRICING ASSESSMENT FOR THE PRECEDING ASSESSMENT YEAR 2008-0 9. IN THIS CONTEXT, THE LD. REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT BEFORE THE LOWER AUTHORITIES, ASSESSEE HAD POINTED OUT THAT THE REVE NUE EARNED BY THE SAID CONCERN FROM SOFTWARE DEVELOPMENT ACTIVITIES WAS LE SS THAN 75% OF THE TOTAL REVENUE AND THEREFORE IT WAS EXCLUDIBLE FROM THE LI ST OF COMPARABLES. THE LD. REPRESENTATIVE POINTED OUT THAT THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 VIDE ITS ORDER DATED 11.02. 2015 (SUPRA) HAS EXCLUDED THE SAID CONCERN FROM THE FINAL SET OF COM PARABLES. IT HAS ALSO BEEN POINTED OUT THAT FOR ASSESSMENT YEAR 2010-11 IN ASS ESSEES OWN CASE THE SAID CONCERN HAS BEEN EXCLUDED FROM THE FINAL SET OF COM PARABLES AS PER THE ORDER OF THE DRP, A COPY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK AT PAGES 1674 TO 1738. 13. THE LD. CIT-DR APPEARING FOR THE REVENUE HAS NO T CONTESTED THE ASSERTIONS OF THE ASSESSEE THAT UNDER SIMILAR CIRCU MSTANCES, THE SAID CONCERN HAS BEEN DIRECTED TO BE EXCLUDED FROM THE FINAL SET OF COMPARABLES BY THE TRIBUNAL IN THE ASSESSEES OWN CASE VIDE ORDER DATE D 11.02.2015 (SUPRA). 14. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN THIS CONTEXT, WE HAVE PERUSED THE ORDER OF THE TRIBUNAL IN THE ASSES SEES OWN CASE DATED 11.02.2015 (SUPRA) WHEREIN THE FOLLOWING DISCUSSION IS RELEVANT :- ITA NO.94/PN/2014 23. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS. IN FACT, THE TPO HAS REPRODUCED IN PARA 15.7 THE WRITTEN SUBMISSIONS OF THE ASSESSEE ON THIS ASPECT. THE FIRST PLEA RAISED BY THE ASSESSEE WAS T HAT INCOME EARNED BY THE SAID CONCERN FROM RENDERING OF APPLICATION SUPPORT SERVICES AND INFRASTRUCTURE MANAGEMENT SERVICES, WHICH CONSTITUTE 11% AND 15% R ESPECTIVELY OF THE TOTAL REVENUE, ARE IN THE NATURE OF IT ENABLED SERVICES A ND NOT LINKED TO THE SOFTWARE DEVELOPMENT SERVICES. ON THIS BASIS, IT W AS SOUGHT TO BE POINTED OUT THAT IF THE AFORESAID INCOME STREAMS ARE EXCLUDED F ROM THE SEGMENT OF SOFTWARE DEVELOPMENT SERVICES, THEN THE INCOME FROM SOFTWARE DEVELOPMENT SERVICES SEGMENT FALLS BELOW 75% OF THE TOTAL INCOM E. THE TPO HAD APPLIED A FILTER TO EXCLUDE SUCH CONCERNS FROM THE LIST OF CO MPARABLES, WHEREIN THE INCOME FROM SOFTWARE DEVELOPMENT SERVICES WAS LESS THAN 75% OF THE TOTAL INCOME. IN FACT, IN THE DISCUSSION MADE BY THE TPO IN RESPONSE TO ASSESSEES AFORESAID ASSERTIONS, THERE IS NO DENIAL TO THE SAM E. THOUGH THE TPO GOES ON TO RELY ON THE CBDTS CIRCULAR DATED 26.09.2000 (SU PRA), BUT THAT IS IN RELATION TO THE ACTIVITY OF E-LEARNING AND DIGITAL CONSULTIN G BEING CARRIED OUT BY THE ASSESSEE. THE SEGMENT OF E-LEARNING AND DIGITAL CO NSULTING IS A DIFFERENT SEGMENT. IN ANY CASE, ASSESSEES PLEA BASED ON THE NATURE OF SERVICES ON ACCOUNT OF APPLICATION SUPPORT SERVICES SEGMENT AND INFRASTRUCTURE MANAGEMENT SERVICES SEGMENT HAVE NOT BEEN REBUTTED BY THE TPO. THEREFORE, WE ARE INCLINED TO HOLD THAT THE APPLICA TION SUPPORT SERVICES AND INFRASTRUCTURE MANAGEMENT SERVICES, WHICH CONSTITUT E 11% AND 15% RESPECTIVELY OF THE TOTAL INCOME, ARE IT ENABLED SE RVICES AND NOT LINKED TO THE SOFTWARE DEVELOPMENT SERVICES. 24. MOREOVER, THE ASSESSEE HAD REFERRED TO THE FOLL OWING EXTRACT FROM THE ANNUAL REPORT OF THE SAID CONCERN IN RELATION TO TH E E-LEARNING AND DIGITAL CONSULTING BEFORE THE TPO TO SAY THAT IT IS IN THE NATURE OF IT ENABLED SERVICES:- E-LEARNING AND DIGITAL CONSULTING SERVICES: US CORPORATIONS LOOK AT E-LEARNING OF WEB / CD BASE D TRAINING PROGRAMS AS ONE OF THE WAYS TO ACHIEVE ORGANIZATION AL GROWTH AND IMPROVED BUSINESS PERFORMANCE. E-LEARNING HELPS EM PLOYEES, VENDORS, AND DEALERS OF A COMPANY TO BETTER THEIR P ERFORMANCE AND DEAL WITH FAST-CHANGING ENVIRONMENTS. E-LEARNING M AKES TRAINING HIGHLY EFFICIENT, BY MAKING IT AVAILABLE ANYTIME, A NYWHERE AND REDUCES TOTAL COST OF TRAINING. E-LEARNING IS USED TO TRAI N EMPLOYEES, CUSTOMERS AND SERVICE TECHNICIANS ON PRODUCT KNOWLEDGE, CONCE PTS, STRATEGIES, RISK AND FINANCE, COMPLIANCE AND TECHNOLOGY. 25. OSTENSIBLY, THE AFORESAID SERVICES INVOLVE SETT ING UP OF SUPPORT CENTRES AND REMOTE MAINTENANCE, WHICH HAVE BEEN DULY CATEGO RIZED AS ITES BY THE CBDTS CIRCULAR DATED 26.09.2000 ITSELF, WHICH HAS BEEN REPRODUCED BY THE TPO IN THE IMPUGNED ORDER. THEREFORE, EVEN THE SAI D SEGMENT IS NOT TO BE INCLUDED AS PART OF THE SOFTWARE DEVELOPMENT SERVIC ES, AS ASSERTED BY THE ASSESSEE. ONCE THE SEGMENT OF APPLICATION SUPPORT AND INFRASTRUCTURE MANAGEMENT SERVICES ARE REMOVED ALONG WITH THE EXCL USION OF E-LEARNING AND DIGITAL CONSULTING SEGMENT, THEN THE INCOME OF THE SAID CONCERN FROM SOFTWARE DEVELOPMENT SERVICES FALLS BELOW 75% OF ITS TOTAL I NCOME AND THEREFORE, IT DESERVES TO BE EXCLUDED EVEN ON THE BASIS OF THE FI LTER APPLIED BY THE TPO. THUS, ON THIS ASPECT, ASSESSEE SUCCEEDS. ITA NO.94/PN/2014 15. OSTENSIBLY, THE TRIBUNAL HAS EXCLUDED THE SAID CONCERN ON THE GROUND THAT ITS INCOME FROM SOFTWARE DEVELOPMENT SERVICES WAS BELOW 75% OF THE TOTAL INCOME. THE FACT-SITUATION NOTED BY THE TRIB UNAL IN ITS ORDER DATED 11.02.2015 (SUPRA) CONTINUES TO HOLD IN THE PRESENT YEAR ALSO. FOR THIS, THE LD. REPRESENTATIVE FOR THE ASSESSEE HAS REFERRED TO THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES BASED ON THE RELEVANT EXTRACT OF THE ANNUAL REPORT OF THE SAID CONCERN PLACED AT PAGES 1739 TO 1742 OF THE PA PER BOOK. IN TERMS OF THE AFORESAID, IT IS NOTICED THAT THE PROPORTIONATE INC OME OF THE SAID CONCERN IN VARIOUS SEGMENTS IS AS UNDER :- IT CONSULTING - 48%; INFRASTRUCTURE MANAGEMENT SERVICES - 17%; AND, E-LEARNING AND DIGITAL CONSULTING - 35%. 16. ON THE BASIS OF THE AFORESAID, IT QUITE CLEAR T HAT THE ACTIVITIES ON ACCOUNT OF THE INFRASTRUCTURE MANAGEMENT SERVICES AND E-LEA RNING AND DIGITAL CONSULTING WHICH CONSTITUTE 17% AND 35% RESPECTIVEL Y OF THE TOTAL REVENUE ARE OBVIOUSLY IT ENABLED SERVICES AND ARE NOT AKIN TO T HE SOFTWARE DESIGN AND DEVELOPMENT SERVICES BEING RENDERED BY THE ASSESSEE . ON SIMILAR CONSIDERATIONS, THE SAID CONCERN WAS FOUND TO BE IN COMPARABLE TO ASSESSEES SEGMENT OF PROVISION OF SOFTWARE DESIGN AND DEVELOP MENT SERVICES IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2008-09 (SUPR A) BY THE TRIBUNAL. FOLLOWING THE AFORESAID PRECEDENT, WHICH CONTINUES TO HOLD THE FIELD, IN THIS YEAR ALSO ON ACCOUNT OF SIMILARITY IN CIRCUMSTANCES , WE THEREFORE UPHOLD ASSESSEES PLEA FOR EXCLUSION OF FCS SOFTWARE SOLUT IONS LTD. FROM THE FINAL SET OF COMPARABLES. THIS ON GROUND OF APPEAL NO.4.1 AS SESSEE SUCCEEDS. 17. BY WAY OF GROUND OF APPEAL NO.4.2, THE PLEA OF THE ASSESSEE IS FOR EXCLUSION OF M/S KALS INFORMATION SYSTEMS LTD. (APP LICATION SOFTWARE SEGMENT) FROM THE FINAL SET OF COMPARABLES. ON THI S ASPECT, THE PRIMARY PLEA OF THE ASSESSEE IS THAT THE SAID CONCERN IS FUNCTIO NALLY DIFFERENT FROM THE ITA NO.94/PN/2014 ACTIVITIES UNDERTAKEN BY THE ASSESSEE IN ITS SEGMEN T OF PROVISION OF SOFTWARE DESIGN AND DEVELOPMENT SERVICES INASMUCH AS THE SAI D CONCERN IS ENGAGED IN DEVELOPMENT AND SALE OF SOFTWARE PRODUCTS AND SUCH ACTIVITY IS QUITE DIFFERENT FROM THAT OF THE ASSESSEE. WE FIND THAT THE AFORES AID PLEA OF THE ASSESSEE HAS BEEN CONSISTENTLY RAISED BEFORE THE LOWER AUTHORITI ES. THE TPO HAS INCLUDED THE SAID CONCERN IN THE FINAL SET OF COMPARABLES PR IMARILY ON THE GROUND THAT THE SAID CONCERN WAS INCLUDED BY HIM IN THE FINAL S ET OF COMPARABLES IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR 2008-09. 18. IT WAS A COMMON POINT BETWEEN THE PARTIES THAT SO FAR AS THE KALS INFORMATION SYSTEMS LTD. (APPLICATION SOFTWARE SEGM ENT) IS CONCERNED, THE SAID CONCERN WAS FOUND TO BE INCOMPARABLE BY THE TR IBUNAL IN ITS ORDER DATED 11.02.2015 (SUPRA) IN ASSESSEES OWN CASE FOR ASSES SMENT YEAR 2008-09 ON THE GROUND THAT IT WAS FUNCTIONALLY DIFFERENT. IT WAS ALSO A COMMON POINT BETWEEN THE PARTIES THAT THE FACTS AND CIRCUMSTANCE S IN THIS YEAR REMAIN THE SAME AND THEREFORE IN VIEW OF THE PRECEDENT IN THE ASSESSEES OWN CASE, THE SAID CONCERN IS LIABLE TO BE EXCLUDED. 19. APART FROM THE AFORESAID, IN THE COURSE OF HEAR ING, THE LD. REPRESENTATIVE ALSO POINTED OUT THAT FOR THE VERY S AME ASSESSMENT YEAR 2009- 10, THE SAID CONCERN HAS BEEN FOUND TO BE INCOMPARA BLE TO A CONCERN RENDERING SOFTWARE DEVELOPMENT SERVICES IN THE CASE OF PTC SOFTWARE (INDIA) PVT. LTD. VS. DCIT VIDE ITA NO.336/PN/2014 DATED 31 .10.2014. 20. IN THIS CONTEXT, THE FOLLOWING DISCUSSION IN TH E ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 DATED 11.02.2015 (SUPRA) IS RELEVANT :- 10. THE FIRST PLEA OF THE ASSESSEE IS WITH RESPECT TO M/S KALS INFORMATION SYSTEM, (APPLICATIONS SOFTWARE SEGMENT), A CONCERN WHICH HAS BEEN INCLUDED ITA NO.94/PN/2014 AS A COMPARABLE BY THE TPO FOR THE PURPOSES OF COMP ARABILITY ANALYSIS. ACCORDING TO THE ASSESSEE, THE INCLUSION OF SAID CO NCERN AS A COMPARABLE IS WRONG BECAUSE THE SAID CONCERN IS FUNCTIONALLY DIFF ERENT FROM THE ACTIVITIES UNDERTAKEN BY THE ASSESSEE IN ITS SEGMENT OF PROVIS ION OF SOFTWARE DEVELOPMENT AND DESIGN SERVICES. AS PER THE ASSESS EE, THE SAID CONCERN IS ENGAGED IN DEVELOPMENT AND SALE OF SOFTWARE PRODUCT S AND SUCH ACTIVITY IS QUITE DIFFERENT FROM THAT OF THE ASSESSEE WHICH REL ATES TO RENDERING OF SOFTWARE DEVELOPMENT SERVICES FOR ITS CUSTOMERS. BEFORE THE TPO, ASSESSEE REFERRED TO AN EXTRACT FROM THE ANNUAL REPORT OF THE SAID CO NCERN FOR THE FINANCIAL YEAR 2007-08 TO POINT OUT THAT THE SOFTWARE DEVELOPMENT EXPENDITURE WAS REPORTED BY THE SAID CONCERN AS AN ELEMENT OF INVENTORY, WHI CH ACCORDING TO THE ASSESSEE DEMONSTRATED THAT THE SAID CONCERN WAS A P RODUCT COMPANY AND NOT A SOFTWARE SERVICES COMPANY. IT WAS ALSO POINTED O UT ON THE BASIS OF THE WEBSITE OF THE SAID CONCERN THAT IT WAS OWNING SOFT WARE PRODUCTS LIKE VIRTUAL INSURE, IA VISION, CMSS, DOCUFLO (DOCUMENT MANAGEME NT SYSTEM) TO SUPPORT ITS PLEA THAT THE SAID CONCERN WAS INTO DEVELOPMENT AND SALE OF SOFTWARE PRODUCTS. IT WAS ALSO POINTED OUT BEFORE THE TPO T HAT THE SAID CONCERN WAS ALSO ENGAGED IN RENDERING TRAINING SERVICES AND ALT HOUGH THE TPO HAD USED THE SEGMENTAL INFORMATION OF APPLICATION SOFTWARE O NLY BUT THE SEGMENTAL DATA PUBLISHED BY THE SAID CONCERN WAS ERRONEOUS AND ACC ORDINGLY IT WAS UNRELIABLE. THE TPO HOWEVER DID NOT FIND ANY WEIGH T IN THE ARGUMENTS OF THE ASSESSEE AND NOTED THAT THERE WAS NO MATERIAL TO SA Y THAT THE SAID CONCERN WAS ACTUAL EARNING REVENUES FROM THE SALE OF ANY PR OPRIETARY PRODUCTS AND ACCORDING TO HIM IT IS NOT UNCOMMON FOR EVEN A SOFT WARE DEVELOPMENT SERVICE PROVIDER TO CALL THEIR SERVICES AS PRODUCT, THU S SUCH COMPANIES CONTINUE TO BE SERVICE PROVIDERS. THE DRP HAS ALSO AFFIRMED TH E STAND OF THE TPO, AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE US. 11. ON THIS ASPECT, THE LEARNED COUNSEL FOR THE ASS ESSEE HAS REITERATED THE SUBMISSIONS PUT-FORTH BEFORE THE LOWER AUTHORITIES BY POINTING OUT THAT THE APPLICATIONS SOFTWARE SEGMENT OF THE SAID CONCERN W AS INTO DEVELOPMENT AND SALE OF SOFTWARE PRODUCTS, WHICH IS AN ACTIVITY DIS TINCT FROM PROVIDING SOFTWARE DEVELOPMENT SERVICES UNDERTAKEN BY THE ASSESSEE. O UR ATTENTION HAS BEEN DRAWN TO PAGES 1086 AND 1087 AND PAGES 1092 TO 1096 OF THE PAPER BOOK WHEREIN ARE PLACED RELEVANT EXTRACTS OF THE ANNUAL REPORT OF THE SAID CONCERN FOR FINANCIAL YEAR 2007-08 AND THE WEBSITE EXTRACT RESPECTIVELY TO SUPPORT THE PLEAS RAISED BEFORE THE LOWER AUTHORITIES. IT HAS ALSO BEEN POINTED OUT THAT THE ACTIVITIES OF SAID CONCERN WERE CONSIDERED BY THE P UNE BENCH OF THE TRIBUNAL IN THE CASE OF BINDVIEW INDIA P. LTD. VIDE ITA NO.1 386/PN/2010 ORDER DATED 30.11.2011, WHEREIN IT HAS BEEN HELD THAT THE SAID CONCERN WAS FUNCTIONALLY DIFFERENT FROM A SOFTWARE DEVELOPMENT SERVICE PROVI DER. A REFERENCE HAS ALSO BEEN MADE TO THE DECISION OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF TRILOGY E-BUSINESS SOFTWARE INDIA PVT. LTD. VIDE ITA NO.1054/BANG/2011 ORDER DATED 23.11.2012, WHEREIN ALSO SAID CONCERN W AS HELD TO BE NOT COMPARABLE TO A SOFTWARE DEVELOPMENT SERVICE PROVID ER. 12. ON THE OTHER HAND, THE LEARNED CIT-DR HAS REITE RATED THE STAND OF THE LOWER AUTHORITIES BY POINTING OUT THAT MERE OWNERSH IP OF SOFTWARE PRODUCTS WOULD NOT MAKE A CONCERN FUNCTIONALLY NON-COMPARABL E TO A SOFTWARE DEVELOPMENT SERVICE PROVIDER, WHO DID NOT OWN ANY S OFTWARE PRODUCT. ACCORDING TO HIM, SUCH DIFFERENCE IS NOT A MATERIAL DIFFERENCE CONTEMPLATED UNDER THE TNM METHOD FOR THE PURPOSES OF COMPARABIL ITY ANALYSIS. APART THEREFROM, IT HAS BEEN POINTED OUT THAT THE SAID CO NCERN VIDE A COMMUNICATION DATED 13.01.2009 ADDRESSED TO THE ADDL.CIT (TP), HY DERABAD CONFIRMED THAT ITS CORE BUSINESS WAS THAT OF SOFTWARE DEVELOPMENT SERVICE PROVIDER. FURTHER, ACCORDING TO THE LEARNED CIT-DR EVEN THE ERROR IN T HE SEGMENTAL REPORTING BY ITA NO.94/PN/2014 THE SAID CONCERN WOULD NOT ALTER THE BIGGER PICTURE THAT IT WAS DERIVING INCOME MAINLY FROM SOFTWARE DEVELOPMENT SERVICE. ACCORDIN GLY, INCLUSION OF THE SAID CONCERN IN THE FINAL SET OF COMPARABLES IS SOUGHT T O BE DEFENDED. 13. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE PERTINENT POINT RAISED BY THE ASSESSEE IS THAT THE SAID CONCE RN IS FUNCTIONALLY NOT COMPARABLE TO THE ACTIVITIES UNDERTAKEN BY THE ASSE SSEE ON ACCOUNT PROVISION OF SOFTWARE DEVELOPMENT SERVICES. THE SERVICES REN DERED BY THE ASSESSEE TO ITS ASSOCIATED ENTERPRISE UNDER THE HEADING PROVIS ION OF SOFTWARE DEVELOPMENT SERVICES INCLUDE DEVELOPMENT OF SOFTWA RE IN ACCORDANCE WITH THE DESIGNS, PRODUCTION ORDERS, PLANS, PROCESS SPEC IFICATIONS, AND PRODUCTION SCHEDULES, ETC. SUPPLIED BY THE ASSOCIATED ENTERPRI SE. ASSESSEE IS REMUNERATED ON A COST PLUS MARKUP (15%) BASIS FOR T HE SERVICES PROVIDED TO THE ASSOCIATED ENTERPRISE. NOTABLY, THE OWNERSHIP OF THE PRODUCT DEVELOPED LIES WITH THE ASSOCIATED ENTERPRISE. THE OWNERSHIP OF ANY DOCUMENTATION OR KNOW-HOW AND ANY OTHER PROPRIETARY INFORMATION RECE IVED FROM THE ASSOCIATED ENTERPRISE FOR THE PURPOSE OF RENDERING OF SERVICES TO THE ASSOCIATED ENTERPRISE ARE ALSO THE PROPERTY OF THE ASSOCIATED ENTERPRISE. EVEN ANY IMPROVEMENTS MADE BY THE ASSESSEE TO EITHER OF THE AFORESAID ITE MS DURING THE COURSE OF PROVIDING SERVICES ARE ALSO TO BE SOLELY OWNED BY T HE ASSOCIATED ENTERPRISE. THUS, THE ASSESSEE HAS BEEN CORRECTLY UNDERSTOOD TO BE A MERE SOFTWARE DEVELOPMENT SERVICE PROVIDER. 14. WITH RESPECT TO KALS INFORMATION SYSTEM LTD. (A PPLICATIONS SOFTWARE SEGMENT), THE POINT RAISED BY THE ASSESSEE IS THAT THIS CONCERN IS ENGAGED IN DEVELOPMENT OF SOFTWARE PRODUCTS AND NOT PURELY/MAI NLY IN SOFTWARE DEVELOPMENT SERVICES. IN THIS CONNECTION, THE BANG ALORE BENCH OF THE TRIBUNAL IN THE CASE OF TRILOGY E-BUSINESS SOFTWARE INDIA P. LTD. (SUPRA) HELD THAT THE SAID COMPANY WAS DEVELOPING SOFTWARE PRODU CTS AND WAS NOT PURELY/ MAINLY A SOFTWARE DEVELOPMENT SERVICE PROVIDER. AC CORDINGLY, THE BANGALORE BENCH OF THE TRIBUNAL HELD THAT THE SAID CONCERN WA S NOT COMPARABLE TO THE ASSESSEE BEFORE THEM, WHICH WAS UNDERTAKING ACTIVIT IES SIMILAR TO THE CASE BEFORE US, NAMELY, SOFTWARE DEVELOPMENT SERVICES. IN-FACT, THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF BINDVIEW INDIA P. LTD. (SUPRA) ALSO CONSIDERED A SOMEWHAT SIMILAR SITUATION AND, FOUND M/S KALS INFO RMATION SYSTEM LTD. (APPLICATIONS SOFTWARE SEGMENT) TO BE INCOMPARABLE TO A CONCERN WHICH WAS PROVIDING SOFTWARE DEVELOPMENT SERVICES, AS IS THE CASE OF THE ASSESSEE BEFORE US. MOREOVER, THE MATERIAL RELIED UPON BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES, COPIES OF WHICH HAVE ALSO BEEN P LACED IN THE PAPER BOOK FILED BEFORE US, SUPPORTS THE ASSERTIONS OF THE ASS ESSEE THAT THE SAID CONCERN IS ENGAGED IN DEVELOPMENT AND SALE OF SOFTWARE PROD UCT, ETC., WHICH IS DISTINCT FROM THE SOFTWARE DEVELOPMENT SERVICES RENDERED BY THE ASSESSEE TO ITS ASSOCIATED ENTERPRISE. THUS, WE ARE INCLINED TO UP HOLD THE PLEA OF THE ASSESSEE THAT THE M/S KALS INFORMATION SYSTEM LTD. (APPLICATIONS SOFTWARE SEGMENT) IS FUNCTIONALLY INCOMPARABLE TO THE ASSESS EE. 15. THE ATTEMPT BY THE LEARNED CIT-DR TO SUPPORT TH E STAND OF THE TPO ON THE BASIS OF A COMMUNICATION RECEIVED BY ADDL.CIT ( TP), HYDERABAD REGARDING KALS INFORMATION SYSTEM LTD., IN OUR VIEW, IS UNTEN ABLE. OSTENSIBLY, SUCH AN INFORMATION WAS NOT AVAILABLE IN PUBLIC DOMAIN AND THEREFORE IT COULD NOT HAVE BEEN IN THE REALM OF CONSIDERATION BY THE TPO AND M OREOVER, WE FIND THAT THE SAID ASSERTION IS QUITE CONTRARY TO THE INFORMATION AVAILABLE IN PUBLIC DOMAIN, NAMELY, THE ANNUAL REPORT, AND THE WEBSITE EXTRACT OF THE SAID CONCERN, WHICH HAVE BEEN PERTINENTLY REFERRED TO BY THE ASSESSEE. ITA NO.94/PN/2014 16. FOR THE AFORESAID REASONS, WE UPHOLD THE PLEA O F THE ASSESSEE FOR EXCLUSION OF M/S KALS INFORMATION SYSTEM LTD. (APPL ICATIONS SOFTWARE SEGMENT) FROM THE FINAL SET OF COMPARABLES FOR THE PURPOSES OF COMPARABILITY ANALYSIS. 21. FOLLOWING THE AFORESAID PRECEDENT, WE DIRECT TH E INCOME-TAX AUTHORITIES TO EXCLUDE M/S KALS INFORMATION SYSTEMS LTD. (APPLI CATION SOFTWARE SEGMENT) FROM THE FINAL SET OF COMPARABLES. THUS, ON GROUND OF APPEAL NO.4.2 ASSESSEE SUCCEEDS. 22. NOW, WE MAY CONSIDER THE GROUND OF APPEAL NO.4. 3 WHEREBY ASSESSEE HAS ASSAILED THE ACTION OF THE TPO IN EXCLUDING E-I NFOCHIPS LTD. FROM THE FINAL SET OF COMPARABLES. IN TERMS OF PARA 11(XIII) OF T HE ORDER OF THE TPO, IT IS REVEALED THAT THE SAID CONCERN WAS EXCLUDED BY HIM FROM THE FINAL SET OF COMPARABLES ON THE GROUND THAT THE INSTANT ASSESSME NT YEAR IS AN EXCEPTIONAL YEAR OF BUSINESS . IN SUPPORT, THE TPO HAS RELIED UPON THE FOLLOWING TABULATION :- SR.NO. FINANCIAL YEAR TOTAL SALES TOTAL EXPENDITURE PBIT PBIT/COST % 1 2006-07 30.45 18.28 12.17 66.58% 2 2007-08 24.03 17.10 6.93 40.52% 3 2008-09 14.87 14.18 0.69 4.87% 4 2009-10 13.29 9.13 4.16 45.56% 5 2010-11 26.04 15 11.04 73.60% 23. ON THIS ASPECT, THE LD. REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE SAID CONCERN HAS BEEN EXCLUDED ON AN ERRONEOUS REASONING THAT THE YEAR UNDER CONSIDERATION WAS AN EXCEPTIONAL YEAR. IN TH IS CONTEXT, IT WAS POINTED OUT THAT IN ASSESSMENT YEAR 2008-09, THE SAID CONCE RN HAS BEEN ACCEPTED AS A GOOD COMPARABLE BY THE TPO HIMSELF. THE LD. REPR ESENTATIVE FOR THE ASSESSEE SUBMITTED THAT ONLY REASON ADVANCED BY THE TPO IS THAT THE PBIT/COST RATIO IN THE CURRENT ASSESSMENT YEAR IS O NLY 4.87% WHICH IS QUITE LOW IN COMPARISON TO THE PRECEDING AND SUCCEEDING YEARS . THE LD. REPRESENTATIVE POINTED OUT THAT THE TPO HAS NOT SUB STANTIATED ON THE BASIS OF ITA NO.94/PN/2014 THE ANNUAL REPORT OF THE SAID CONCERN AS TO HOW THE YEAR UNDER CONSIDERATION WAS EXCEPTIONAL. THEREFORE IT COULD NOT BE SAID TH AT THE MARGIN DECLARED FOR THE YEAR UNDER CONSIDERATION WAS NOT COMPARABLE. I N THIS CONTEXT, THE LD. REPRESENTATIVE HAS REFERRED TO PAGES 554 TO 564 OF THE PAPER BOOK WHEREIN IS PLACED A COPY OF THE ANNUAL REPORT OF THE SAID CONC ERN TO POINT OUT THAT THE ONLY REASON ATTRIBUTED FOR THE DECLINE IN THE MARGI N IS PURPORTED TO BE THE SLOW- DOWN IN THE US ECONOMY. THE LD. REPRESENTATIVE POI NTED OUT THAT THE SAID REASON IS APPLICABLE ALL ACROSS AND THE SAME APPLIE S EVEN TO THE OPERATIONS OF THE ASSESSEE, WHICH IS RENDERING COMPARABLE SERVICE S TO ITS ASSOCIATED ENTERPRISES IN THE USA. THEREFORE, IT IS SOUGHT TO BE CONTENDED THAT THE SAID CONCERN IS NOT A CONSISTENT LOSS MAKER AND RATHER T HE LOWER PROFITABILITY IN THIS YEAR IS ON ACCOUNT OF A NORMAL BUSINESS CYCLE AND A CCORDINGLY THE SAID CONCERN CANNOT BE EXCLUDED FROM THE FINAL SET OF CO MPARABLES. 24. ON THE OTHER HAND, THE LD. CIT-DR APPEARING FOR THE REVENUE HAS POINTED OUT THAT THE INSTANT ASSESSMENT YEAR WAS AN EXCEPTIONAL YEAR INASMUCH AS THE SAID CONCERN HAS WITNESSED A SUBSTA NTIAL DROP IN ITS TURNOVER IN THIS YEAR TO RS.13,30,60,610/- FROM RS.21,03,37, 967/- IN THE IMMEDIATELY PRECEDING YEAR. IT HAS ALSO BEEN POINTED OUT THAT IN THIS YEAR THE SAID CONCERN HAS EARNED AN EXCEPTIONAL INCOME BY WAY OF SALE OF UNITS OF RS.2,90,57,578/- AS AGAINST A MEAGER INCOME OF RS.93,31,270/- ON THI S COUNT IN THE IMMEDIATELY PRECEDING YEAR. IT WAS THEREFORE CONTENDED THAT BA SED ON THE FINANCIAL RESULTS OF THE SAID CONCERN FOR THE INSTANT ASSESSMENT YEAR , THE SAID CONCERN HAS NOT CARRIED OUT ITS BUSINESS IN NORMAL CIRCUMSTANCES, A ND ITS EXCLUSION FROM THE LIST OF COMPARABLES IS JUSTIFIED. 25. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN THE CONTEXT OF THE CONTROVERSY RELATING TO EXCLUSION OF A CONCERN ON ACCOUNT OF EXCEPTIONAL YEAR, IT IS TO BE UNDERSTOOD THAT THE QUESTION IS D EPENDENT ON THE FACTS AND ITA NO.94/PN/2014 CIRCUMSTANCES OF EACH CASE. QUITE CLEARLY, IN THE PRESENT CASE THE TABULATION MADE BY THE TPO REGARDING THE FINANCIAL RESULTS OF E-INFOCHIPS LTD. FOR THE PRECEDING AND SUCCEEDING ASSESSMENT YEARS SHOW THAT IN THE PRESENT YEAR THE PBIT/COST HAS DROPPED TO 4.87% WHICH IS QUITE LOW I N COMPARISON TO THE OTHER YEARS. NEVERTHELESS, THE FACTUM OF LOWER MARGIN IN THIS YEAR BY ITSELF CANNOT BE A GROUND TO DECIDE WHETHER SUCH CONCERN IS TO BE EXCLUDED OR INCLUDED IN THE FINAL SET OF COMPARABLES. THE AFORESAID ASPECT SHOULD ONLY BE A TRIGGER WHICH WOULD JUSTIFY FURTHER INVESTIGATION TO ESTABL ISH WHETHER THE SAID CONCERN IS TO BE TAKEN AS A COMPARABLE WAS NOT. THE INVEST IGATIONS ARE REQUIRED TO ASCERTAIN AS TO WHETHER THE RESULTANT MARGIN IN THE CURRENT YEAR IS REFLECTION OF A NORMAL BUSINESS CONDITION OR THAT IT IS A RESULT OF CERTAIN EXCEPTIONAL/ABNORMAL BUSINESS CONDITIONS. IN SO FA R AS THE SIMILARITY OF FUNCTIONS ARE CONCERNED THERE IS NO DISPUTE THAT TH E ACTIVITIES CARRIED OUT BY THE SAID CONCERN ARE COMPARABLE TO THE ACTIVITIES B EING RENDERED BY THE ASSESSEE. SO HOWEVER, IF IT IS FOUND ON INVESTIGAT ION THAT THE LOW MARGIN OF THE SAID CONCERN DOES NOT MEET THE COMPARABILITY ANALYS IS OR THAT IT IS NOT A NORMAL BUSINESS CONDITION THEN WE ARE OF THE VIEW THAT THE SAID CONCERN SHOULD NOT BE INCLUDED IN THE LIST OF COMPARABLES FOR THE PURPOSE S OF DETERMINING THE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS. OT HERWISE, THE ENTITY WHICH SATISFIES THE COMPARABILITY ANALYSIS EVEN IF IT HAS A LOW MARGIN WHICH IS REFLECTIVE OF A NORMAL BUSINESS CONDITION, SHOULD N OT BE REJECTED SOLELY ON THE BASIS OF THAT THERE IS A DIP IN THE PROFIT MARGIN I N COMPARISON TO OTHER YEARS. IN THE INSTANT CASE, HAVING REGARD TO THE DISCUSSION I N THE ORDER OF THE TPO IN PARA 11(XIII), NO CAUSE HAS BEEN IDENTIFIED FOR THE DECLINE IN MARGIN TO 4.87% AS COMPARED TO THE OTHER ASSESSMENT YEARS, EXCEPT F OR THE PURPORTED MENTION IN THE ANNUAL REPORT OF THE SLOW-DOWN IN THE US ECO NOMY. IN OUR CONSIDERED OPINION, THE SAID REASON ALONE CANNOT BE A GROUND T O SAY THAT THE SAID CONCERN IS TO BE EXCLUDED BECAUSE SUCH A REASON WOULD BE AP PLICABLE TO ALL THE CONCERNS OPERATING IN SUCH ENVIRONMENT, AND IS NOT SPECIFIC TO E-INFOCHIPS LTD.. ITA NO.94/PN/2014 THEREFORE, IN OUR VIEW, THE TPO HAS NOT DEMONSTRATE D THAT THE LOWER PROFIT MARGIN OF THE SAID CONCERN IN THIS YEAR IS ATTRIBUT ABLE TO ANY ABNORMAL BUSINESS CONDITION WHICH IS FAR REMOVED FROM THE NORMAL BUSI NESS CONDITIONS SO AS TO JUSTIFY ITS EXCLUSION ON THE BASIS OF EXCEPTIONAL YEAR. IN-FACT, THE FALL IN PROFIT MARGIN IS ATTRIBUTABLE TO A GENERIC REASON, WHICH I S APPLICABLE TO ALL THE INDUSTRY PLAYERS AND IS NOT SPECIFIC TO THE SAID CO NCERN. IN ANY CASE, THERE IS NO CASE MADE OUT BY THE TPO THAT THE SAID CONCERN I S FUNCTIONALLY DISTINCT FROM THE ACTIVITIES BEING CARRIED OUT BY THE ASSESSEE. IT HAS ALSO BEEN ASSERTED BEFORE US, WITHOUT CONTROVERSION FROM THE SIDE OF T HE REVENUE, THAT THE SAID CONCERN HAS BEEN ACCEPTED BY THE DRP IN THE ASSESSE ES OWN CASE FOR ASSESSMENT YEAR 2008-09 TO BE FUNCTIONALLY COMPARAB LE. IN THE COURSE OF HEARING, THE LD. REPRESENTATIVE ALSO ASSERTED THAT THERE HAS BEEN NO CHANGE IN THE BUSINESS OF THE PROFILE OF THE SAID CONCERN DURING THE YEAR IN COMPARISON TO PRECEDING ASSESSMENT YEAR EXCEPT FALL IN PROFIT MARGIN. 26. IN SO FAR AS THE PLEA RAISED BY THE LD. CIT-DR BASED ON THE ANNUAL REPORT IS CONCERNED, IN OUR VIEW, IT WOULD NOT BE A PPROPRIATE TO COMPARE EACH AND EVERY SINGLE ITEM OF INCOME AND EXPENSE IN THE FINANCIAL STATEMENTS IN ORDER TO MEASURE ITS COMPARABILITY. MOREOVER, WE F IND THAT FOR ASSESSMENT YEAR 2010-11 ALSO, THE SAID CONCERN HAS BEEN FOUND TO A GOOD COMPARABLE BY THE DRP IN TERMS OF ORDER DATED 29.12.2014 PLACED A T PAGES 1674 TO 1738 OF THE PAPER BOOK. CONSIDERED IN THE AFORESAID LIGHT, IN OUR VIEW, THE SAID CONCERN IS LIABLE TO BE INCLUDED IN THE FINAL SET O F COMPARABLES. WE HOLD SO AND ACCORDINGLY ASSESSEE SUCCEEDS ON GROUND OF APPE AL NO.4.3. 27. IN SO FAR AS THE GROUND OF APPEAL NO.4.4 RELATI NG TO THE EXCLUSION OF AVANI CIMCON TECHNOLOGIES LTD. IS CONCERNED, THE SA ME HAS NOT BEEN PRESSED BY THE ASSESSEE AT THE TIME OF HEARING AND ACCORDINGLY IT IS DISMISSED. ITA NO.94/PN/2014 28. IN SO FAR AS THE GROUND OF APPEAL NO.4.6 IS CON CERNED, THE SAME RELATES TO THE PLEA OF THE ASSESSEE FOR INCLUDING T HE FOLLOWING CONCERNS IN THE FINAL SET OF COMPARABLES : (I) PERSISTENT SYSTEMS L TD.; (II) IT SERVICES SEGMENT OF MINDTREE LTD.; AND, (III) LARSEN AND TOUBRO INFO TECH LTD., WHICH HAVE BEEN EXCLUDED BY THE TPO ON THE BASIS OF TURNOVER FILTER . ON THIS ASPECT, THE PERTINENT PLEA RAISED BY THE ASSESSEE IS THAT THE T PO APPLIED A TURNOVER FILTER OF EXCLUDING CONCERNS WITH TURNOVER EXCEEDING RS.20 0 CRORES AND ACCORDINGLY REJECTED THE SAID CONCERNS FROM THE FINAL SET OF CO MPARABLES, WHEREAS ASSESSEE WAS NOT SHOW-CAUSED ON THIS ASPECT IN THE COURSE OF THE PROCEEDINGS. THE LD. REPRESENTATIVE POINTED OUT TH E INCONSISTENCY ON THE PART OF THE TPO, WHEREBY THE SAME FILTER HAS NOT BE EN APPLIED IN THE SUBSEQUENT ASSESSMENT YEAR 2010-11, AND THE ABOVE C ONCERNS HAVE BEEN ACCEPTED IN THE FINAL SET OF COMPARABLES. NEVERTHE LESS, THE LD. REPRESENTATIVE POINTED OUT THAT A SIMILAR SITUATION HAD ARISEN IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2008-09 WHEREIN ALSO T HE TPO HAD NOT SHOW- CAUSED THE ASSESSEE BEFORE APPLYING THE TURNOVER FI LTER OF RS.200 CRORES AND EXCLUDING CERTAIN CONCERNS FROM THE FINAL SET OF CO MPARABLES; AND, THE TRIBUNAL IN ITS ORDER DATED 11.02.2015 (SUPRA) HAS SET-ASIDE THE IMPUGNED MATTER BACK TO THE FILE OF THE ASSESSING OFFICER/TPO FOR CONSID ERATION AFRESH. IT WAS THEREFORE CONTENDED THAT THE ASSESSEE WOULD BE SATI SFIED IF THE MATTER IS RESTORED BACK TO FILE OF THE LOWER AUTHORITIES FOR CONSIDERATION AFRESH. 29. ON THE OTHER HAND, THE LD. CIT-DR APPEARING FOR THE REVENUE HAS NOT SERIOUSLY CONTESTED THE PLEA OF THE ASSESSEE FOR RE MANDING THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER/TPO FOR GIVING AN OPPORTUNITY OF BEING HEARD BEFORE APPLICATION OF THE TURNOVER FILTER. 30. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE ORDER OF THE TPO AS WELL AS THE SHOW-CAUSE NOTICE ISSUED BY HIM IN THE COURSE OF TRANSFER ITA NO.94/PN/2014 PRICING PROCEEDINGS SHOW THAT NO OPPORTUNITY WAS AL LOWED TO THE ASSESSEE BEFORE APPLYING THE TURNOVER FILTER. SIMILAR SITUA TION HAS BEEN DEALT WITH BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSM ENT YEAR 2008-09 VIDE ORDER DATED 11.02.2015 (SUPRA) IN THE FOLLOWING MAN NER :- 46. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISS IONS ON THE ABOVE ASPECT. IT IS QUITE EVIDENT THAT AT THE LEVEL OF T PO, NO OPPORTUNITY WAS ALLOWED TO THE ASSESSEE BEFORE EXCLUDING THE AFORESAID FOUR CONCERNS FROM THE LIST OF COMPARABLES BY APPLYING A TURNOVER LIMIT OF RS.200 CRORES. IN-FACT, THE SHOW- CAUSE NOTICE ISSUED BY THE TPO DATED 05.10.2011 DID NOT CONTAIN ANY ISSUE REGARDING EXCLUSION OF THE AFORESAID FOUR COMPARABL ES AND/OR APPLICATION OF TURNOVER FILTER OF RS.200 CRORES. IN-FACT, IT IS A LSO EVIDENT FROM THE ORDER OF THE TPO THAT NO REASON HAS BEEN ASSIGNED TO ADOPT THE T URNOVER FILTER OF RS.200 CRORES, ESPECIALLY WHEN NO SUCH FILTER HAS BEEN APP LIED BY THE TPO HIMSELF IN ASSESSMENT YEAR 2010-11, AS ASSERTED BY THE ASSESSE E BEFORE US. IN OUR CONSIDERED OPINION, SUCH AN APPROACH IMPINGES ON TH E PRINCIPLES OF NATURAL JUSTICE AND THE ASSESSEE IS RIGHTFULLY AGGRIEVED. IN SO FAR AS THE OPPORTUNITY OF RAISING OBJECTIONS BEFORE THE DRP IS CONCERNED, IN OUR VIEW, THE SAME CANNOT TAKE THE PLACE OF AN OPPORTUNITY THAT WAS REQUIRED TO BE ALLOWED BEFORE THE TPO; THAT THE ASSESSEE HAD AN OPPORTUNITY BEFORE TH E DRP IS OF NO CONSEQUENCE FOR IT IS THE FAIRNESS AND REASONABLENE SS OF FURNISHING OF AN EXPLANATION BEFORE THE TPO WHICH IS THE ISSUE. IN-F ACT, IN A SOMEWHAT SIMILAR SITUATION THE HONBLE SUPREME COURT IN THE CASE OF TIN BOX COMPANY VS. CIT (2001) 249 ITR 216 (SC) HELD THAT ONCE IT IS ESTABL ISHED THAT THE ASSESSING OFFICER HAD NOT GIVEN TO THE ASSESSEE AN APPROPRIAT E OPPORTUNITY OF BEING HEARD, THAT THE ASSESSEE HAD AN OPPORTUNITY BEFORE THE HIGHER APPELLATE AUTHORITIES WAS REALLY OF NO CONSEQUENCE, FOR IT WA S THE ASSESSMENT ORDER THAT COUNTED INASMUCH AS THE ASSESSMENT ORDER WAS REQUIR ED TO BE MADE ONLY AFTER THE ASSESSEE HAD BEEN ALLOWED A REASONABLE OP PORTUNITY OF BEING HEARD. CONSIDERED IN THE AFORESAID LIGHT, IN THE PRESENT C ASE IT IS AXIOMATIC THAT SO FAR AS THE ISSUE OF THE ADOPTION OF TURNOVER FILTER OF RS.200 CRORES TO EXCLUDE THE AFORESAID FOUR CONCERNS IN CONCERNED, THE SAME HAS BEEN ADOPTED BY THE TPO WITHOUT GIVING THE ASSESSEE ANY OPPORTUNITY OF BEING HEARD AND THEREFORE IN OUR VIEW THE MATTER OUGHT TO BE REMANDED BACK TO THE AO/TPO FOR CONSIDERATION AFRESH. WE HOLD SO. THUS, ON THIS A SPECT ALSO ASSESSEE SUCCEEDS FOR STATISTICAL PURPOSES. 31. FOLLOWING THE AFORESAID PRECEDENT, WE THEREFORE REMAND THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER/TPO FOR C ONSIDERATION AFRESH IN THE LIGHT OF OUR DISCUSSION IN THE ORDER OF THE TRIBUNA L DATED 11.02.2015 (SUPRA). THUS, ON THIS ASPECT ASSESSEE SUCCEEDS FOR STATISTI CAL PURPOSES. 32. BY WAY OF GROUND OF APPEAL NO.4.5, THE APPELLAN T HAS ASSAILED THE ACTION OF THE TPO IN EXCLUDING SASKEN COMMUNICATION S TECHNOLOGIES LTD. ITA NO.94/PN/2014 FROM THE FINAL SET OF COMPARABLES. AS PER THE DISC USSION IN PARA 11(VIII) OF THE ORDER OF THE TPO, IT IS NOTICED THAT THE SAID CONCE RN HAS BEEN EXCLUDED ON THE GROUND THAT DURING THE YEAR UNDER CONSIDERATION IT HAS UNDERTAKEN BUSINESS RESTRUCTURING. THE LD. REPRESENTATIVE ALSO POINTED OUT THAT IN THE SHOW-CAUSE NOTICE DATED 31.10.2012 ISSUED BY THE TPO ANOTHER R EASON HAS BEEN ADVANCED WHICH IS TO THE EFFECT THAT THE SAID CONCE RN FAILS THE EXPORT TURNOVER FILTER OF 75% OF THE TOTAL TURNOVER. 33. THE LD. REPRESENTATIVE HAS ASSAILED BOTH THE RE ASONS ADVANCED BY THE TPO TO REJECT THE SAID CONCERN FROM THE FINAL SET O F COMPARABLES. THE LD. REPRESENTATIVE HAS REFERRED TO AN EXTRACT FROM THE ANNUAL REPORT OF THE SAID CONCERN PLACED IN THE PAPER BOOK AT PAGE 1742 TO PO INT OUT THAT THE SAID CONCERN HAS THE FOLLOWING BUSINESS SEGMENTS (I) T ELECOM SOFTWARE SERVICES; (II) TELECOM SOFTWARE PRODUCTS; (III) NET WORK ENGINEERING SERVICES; AND, (IV) AUTOMOTIVE, UTILITIES AND INDUSTRIAL. TH E LD. REPRESENTATIVE POINTED OUT THAT IT IS ONLY THE TELECOM SOFTWARE SERVICES S EGMENT OF THE SAID CONCERN WHICH IS COMPARABLE TO THE PROVISION OF SOFTWARE DE SIGN AND DEVELOPMENT SERVICES BEING UNDERTAKEN BY THE ASSESSEE FOR ITS A SSOCIATED ENTERPRISES. IT WAS POINTED OUT THAT SO FAR AS THE BUSINESS RESTRUC TURING REFERRED BY THE TPO IS CONCERNED, IT RELATES TO THE SEGMENT AT ITEM (II ) I.E. TELECOM SOFTWARE PRODUCTS WHEREAS THE SEGMENT COMPARABLE TO THE ASSE SSEES TESTED ACTIVITY IS ITEM (I) I.E. TELECOM SOFTWARE SERVICES WHICH HAS N OT UNDERGONE ANY BUSINESS RESTRUCTURING. ON THIS BASIS, THE POINT MADE OUT B Y THE APPELLANT IS THAT THE TPO IS MISPLACED IN OBSERVING THAT THE SAID CONCERN IS TO BE IGNORED ON ACCOUNT OF BUSINESS RESTRUCTURING. THE LD. REPRESE NTATIVE POINTED OUT THAT IN SO FAR AS THE FUNCTIONAL COMPARABILITY OF THE SAID CONCERNS, TELECOM SOFTWARE SERVICES SEGMENT WITH ASSESSEES ACTIVITY IS CONCER NED, THERE IS NO DISPUTE. WITH REGARD TO THE EXPORT TURNOVER FILTER OF THE 75 % OF THE TOTAL TURNOVER THE LD. REPRESENTATIVE POINTED OUT THAT BEFORE THE TPO ASSE SSEE HAD DEMONSTRATED ITA NO.94/PN/2014 THAT THE EXPORT EARNINGS OF THE SAID CONCERN WERE O THERWISE 95% OF THE TOTAL TURNOVER. 34. ON THE OTHER HAND, THE LD. CIT-DR APPEARING FOR THE REVENUE HAS NOT CONTESTED THE FACTUAL MATRIX BROUGHT OUT BY THE LD. REPRESENTATIVE FOR THE ASSESSEE BUT HAS RELIED UPON THE DISCUSSION IN THE ORDER OF THE TPO, WHICH WE HAVE ALREADY ADVERTED TO IN EARLIER PART OF THIS OR DER. 35. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. THE SUBMISSIONS PUT-FORTH BY THE ASSESSEE, BASED ON THE ANNUAL REPO RT OF THE SAID CONCERN, DOES NOT JUSTIFY THE ASSERTIONS OF THE TPO THAT ON ACCOUNT OF BUSINESS RESTRUCTURING THE SAID CONCERNS TELECOM SOFTWARE S ERVICES SEGMENT IS TO BE EXCLUDED FROM THE LIST OF COMPARABLES. IN-FACT, TH E BUSINESS RESTRUCTURING UNDERTAKEN BY THE SAID CONCERN DOES NOT EFFECT THE SEGMENT OF TELECOM SOFTWARE SERVICES WHICH ALONE IS STATED TO BE COMPA RABLE TO ASSESSEES ACTIVITY OF PROVISION OF SOFTWARE DESIGN AND DEVELO PMENT SERVICES TO ASSOCIATED ENTERPRISES. THEREFORE, IN OUR VIEW, TH E REASON ADVANCED BY THE TPO TO EXCLUDE THE SAID CONCERN IS NOT SUSTAINABLE. 36. ON THIS ASPECT, ASSESSEE SUBMITTED THAT THE TUR NOVER OF TELECOM SOFTWARE SEGMENT OF THE SAID CONCERN IS IN EXCESS O F RS.200 CRORES AND THEREFORE IF THE CRITERIA ADOPTED BY THE TPO IS TO BE APPLIED, THE SAID CONCERN WOULD BE EXCLUDIBLE. ON THE APPLICATION OF THE TUR NOVER FILTER, WE HAVE ALREADY SET-ASIDE THE MATTER BACK TO THE FILE OF THE TPO WH ILE CONSIDERING THE GROUND OF APPEAL NO.4.6 OF THE ASSESSEE IN THE EARLIER PAR AS. THEREFORE, THE AFORESAID ASPECT OF THE MATTER SHALL BE RE-VISITED BY THE TPO /ASSESSING OFFICER IN THE LIGHT OF OUR DECISION IN GROUND OF APPEAL NO.4.6. AS A CONSEQUENCE, THE SAID DISPUTE IS ALSO REMANDED BACK TO THE FILE OF THE AS SESSING OFFICER/TPO TO BE DECIDED IN THE LIGHT OF THE DECISION CONSEQUENT TO OUR DIRECTION IN GROUND OF ITA NO.94/PN/2014 APPEAL NO.4.6. THUS, ON THIS ASPECT ALSO ASSESSEE SUCCEEDS FOR STATISTICAL PURPOSES. 37. BY WAY OF GROUND OF APPEAL NO.4.7, THE PLEA OF THE ASSESSEE IS FOR INCLUSION OF RS SOFTWARE INDIA LTD. IN THE FINAL SE T OF COMPARABLES. THE TPO HAS EXCLUDED THE SAID CONCERN FROM THE FINAL SET OF COMPARABLES ON THE BASIS OF THE STAND OF THE DRP IN THE ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEAR 2008-09. 38. ON THIS ASPECT, IT WAS A COMMON POINT BETWEEN T HE PARTIES THAT IN ASSESSMENT YEAR 2008-09 (SUPRA), THE TRIBUNAL HAS U PHELD THE STAND OF THE TPO IN EXCLUDING M/S RS SOFTWARE INDIA LTD. FROM TH E FINAL SET OF COMPARABLES. THE LD. REPRESENTATIVE FOR THE ASSESS EE QUITE FAIRLY SUBMITTED THAT FOLLOWING THE PRECEDENT IN THE ASSESSEES OWN CASE, THE EXCLUSION OF THE SAID CONCERN FROM THE FINAL SET OF COMPARABLES IS L IABLE TO BE AFFIRMED. IN VIEW OF THE DECISION OF THE TRIBUNAL DATED 11.02.2015 (S UPRA) IN THE ASSESSEES OWN CASE, WE HEREBY AFFIRM THE ACTION OF THE TPO IN EXC LUDING RS SOFTWARE INDIA LTD. FROM THE FINAL SET OF COMPARABLES. THUS, ON T HIS ASPECT ASSESSEE FAILS. 39. BY WAY OF GROUND OF APPEAL NO.4.8, THE PLEA OF THE ASSESSEE IS AGAINST THE ACTION OF THE TPO IN EXCLUDING (I) AKSHAY SOFTW ARE TECHNOLOGIES LTD.; (II) THINKSOFT GLOBAL SERVICES LTD.; AND, (III) ZYLOG SY STEMS LIMITED FROM THE FINAL SET OF COMPARABLES ON THE GROUND THAT THE SAID CONC ERNS WERE PREDOMINANTLY ENGAGED IN PROVIDING ONSITE SERVICES WHEREAS ASSESS EE WAS PROVIDING SERVICES TO HIS CLIENTS AS AN OFFSITE SERVICE PROVI DER. ACCORDING TO THE TPO, THE BUSINESS MODEL OF THE SAID CONCERN IS NOT COMPARABL E TO THE ASSESSEE. 40. ON THIS DISPUTE, IT WAS A COMMON GROUND BETWEEN THE PARTIES THAT IN ASSESSMENT YEAR 2008-09 (SUPRA) IN THE ASSESSEES O WN CASE, THE TRIBUNAL ITA NO.94/PN/2014 VIDE ITS ORDER DATED 11.02.2015 (SUPRA) HAS HELD TH E ISSUE AGAINST THE ASSESSEE WHEREIN THE FOLLOWING DISCUSSION IS RELEVA NT : 37. THE NEXT PLEA OF THE ASSESSEE IS AGAINST THE A CTION OF TPO IN EXCLUDING AKSHY SOFTWARE TECHNOLOGIES LIMITED FROM THE FINAL SET OF COMPARABLES. THE TPO HAS DISCUSSED THE ASPECT OF E XCLUSION OF AKSHY SOFTWARE TECHNOLOGIES LIMITED FROM THE FINAL SET OF COMPARABLES IN PARA 15.1 OF HIS ORDER. AS PER THE TPO, AKSHY SOFTWARE TECHN OLOGIES LIMITED IS PREDOMINANTLY AN ON-SITE SERVICE PROVIDER WHEREBY T HE SAID CONCERN RENDERS SERVICES AT THE CLIENTS SITE WHICH IS OUTSIDE INDIA , WHEREAS, THE ASSESSEE IS RENDERING SERVICES TO THE CLIENTS AS AN OFF-SHORE S ERVICE PROVIDER. ACCORDING TO THE TPO, THE MARGINS IN THE ON-SITE SERVICE MODE L AND THE OFF-SHORE BUSINESS MODEL ARE NOT COMPARABLE. 38. THE STAND OF THE ASSESSEE BEFORE THE LOWER AUTH ORITIES AS WELL AS BEFORE US IS THAT IT IS A CONTRACT SERVICE PROVIDER ENGAGED IN PROVIDING SOFTWARE DEVELOPMENT SERVICES AND REGARDLESS OF THE LOCATION , IT IS BEING COMPENSATED ON THE BASIS OF COST PLUS MARK-UP AND THEREFORE, IT COULD NOT BE A GROUND FOR REJECTION OF THE SAID CONCERN FROM THE LIST OF COMP ARABLES. BEFORE US, IT IS SUBMITTED THAT THE MIX OF ON-SITE AND OFF-SITE ACTI VITIES ARE BUSINESS EXIGENCIES AND THAT SUCH A FACTOR CANNOT BE CONSIDERED AS A FI LTER FOR EVALUATING EXCLUSION OR INCLUSION OF A COMPARABLE CONCERN. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE WRITTEN SUBMISSIONS MADE B EFORE THE DRP, WHEREIN IT WAS CONTENDED THAT ASSESSEES AGREEMENT WITH ASSOCI ATED ENTERPRISE, DOES NOT RESTRICT PROVISION OF ON-SITE SERVICES AND THAT EVEN IF ASSESSEE WOULD HAVE PROVIDED ON-SITE SERVICES TO ITS ASSOCIATED ENTERPR ISE, THEN ALSO IT WOULD HAVE BEEN REMUNERATED ON SAME BASIS, I.E. COST PLUS FIXE D MARK-UP BY THE ASSOCIATED ENTERPRISE. IN SUM AND SUBSTANCE, THE S TAND OF THE ASSESSEE IS THAT SUCH A FILTER CANNOT BE APPLIED TO HOLD AKSHY SOFTWARE TECHNOLOGIES LIMITED AS FUNCTIONALLY INCOMPARABLE. 39. THE LEARNED CIT-DR HAS REITERATED THE STAND OF THE TPO AS WELL THE DRP AND POINTED OUT THAT THE BUSINESS MODEL OF PROV IDING ON-SITE SERVICES AT THE PLACE OF THE CLIENTS, IS NOT COMPARABLE WITH OF F-SHORE RENDERING OF SERVICES. 40. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. FACTUALLY SPEAKING, AKSHY SOFTWARE TECHNOLOGIES LIMITED WAS F OUND BY THE TPO TO BE PREDOMINANTLY ENGAGED IN RENDERING SERVICES TO ITS CLIENTS ON ON-SITE BASIS. AS PER THE TPO, AKSHY SOFTWARE TECHNOLOGIES LIMITED RENDERED SERVICES AT CLIENTS SITE UNLIKE THE SERVICES BEING PROVIDED BY THE ASSESSEE THROUGH OFF- SHORE SITES. THE DIFFERENCE IN OPERATING MECHANISM OF TWO BUSINESS MODELS IS STARKLY EVIDENT. WHILE UNDER THE ON-SITE BUSINESS MODEL, THE SERVICE PROVIDER POSITIONS ITS PERSONNEL ON THE CLIENTS SITE AND ON THE OTHER HAND, IN THE OFF- SHORE BUSINESS MODEL, THE SERVICE PROVIDER POSITION S ITS PERSONNEL ON ITS OWN SITE I.E. AWAY FROM THE SITE OF THE CLIENTS. THE T PO IN TERMS OF HIS DISCUSSION IN THE ORDER HAS ATTEMPTED TO DEDUCE THAT THE MARGI NS FROM ON-SITE CONSULTANCY ARE LOWER WHEN COMPARED WITH MARGINS FR OM OFF-SHORE DEVELOPMENT WORK. HE HAS ALSO REFERRED TO AN EXTRA CT FROM MCKINSEYS RESEARCH ON INDIAN SOFTWARE INDUSTRY COMPETITIVENES S TO SAY THAT BECAUSE OF THE DIFFERENCES IN COSTS BETWEEN A DEVELOPED COUNTR Y AND INDIA, IT ACTS AS MOTIVATOR FOR THE COMPANIES LOCATED IN DEVELOPED CO UNTRIES TO INCREASE ITS OFF- SHORE SOURCING OF SERVICES. IN OUR CONSIDERED OPIN ION, WHETHER ON-SITE BUSINESS MODEL PROVIDES HIGHER OR LOWER MARGINS IN COMPARISON WITH OFF-SHORE DEVELOPMENT WORK, IS NOT THE ISSUE OF CONSIDERATION . THE IMPORTANT POINT IS ITA NO.94/PN/2014 THAT THE BUSINESS MODELS ARE QUITE DIFFERENT. OSTE NSIBLY, THE LOGISTICS AND OTHER ASPECTS OF THE TWO BUSINESS MODELS CANNOT BE TREATED ON PAR AND CERTAINLY IT WOULD IMPACT THE RELATIVE MARGINS OF T HE TWO BUSINESS MODELS. THEREFORE, IN OUR CONSIDERED OPINION, THE BUSINESS MODEL OF THE ASSESSEE I.E. PROVISION OF OFF-SHORE SERVICES TO ITS ASSOCIATED E NTERPRISE STANDS ON A DIFFERENT FOOTING THAN THE ON-SITE SERVICES BEING R ENDERED BY AKSHY SOFTWARE TECHNOLOGIES LIMITED. THE ASSERTIONS OF THE ASSESS EE THAT ITS ARRANGEMENT WITH ASSOCIATED ENTERPRISE DOES NOT RULE OUT PROVIS ION OF ON-SITE SERVICES DOES NOT DISTRACT FROM THE FACT THAT THE TESTED TRANSACT IONS UNDERTAKEN BY THE ASSESSEE INVOLVE OFF-SHORE RENDERING OF SERVICES, W HICH IS INCOMPARABLE TO THE ON-SITE SERVICES BEING RENDERED BY AKSHY SOFTWARE T ECHNOLOGIES LIMITED TO ITS CLIENTS ABROAD. 41. BEFORE PARTING ON THIS ISSUE, WE MAY ALSO MAKE A REFERENCE TO THE DECISION OF HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. M/S. HELLOSOFT INDIA PVT. LTD. (ITA NO.645/HYD/2009, FOR ASSESSMENT YEAR 2005-06, DATED 15.01.2013) RELIED UPON BY THE ASSESSEE BEFOR E US, AND THE FOLLOWING DISCUSSION HAS BEEN REFERRED TO:- 12. IN VIEW OF THE AFORESAID, WE UPHOLD THE DECISI ON OF THE CIT(A) IN EXCLUDING COMPANIES WHOSE TURNOVER IS MORE THAN RS. 100 CRORES. SIMILARLY THE CIT(A) IS EQUALLY CORRECT IN NOT SUST AINING THE REJECTION OF COMPARABLES SELECTED BY THE ASSESSEE BY APPLYING E MPLOYEE COST TO SALE FILTER AS RELEVANT DATA / INFORMATION FOR THI S FILTER ARE NOT AVAILABLE. MOREOVER, IT IS ALSO A FACT THAT PART OF THE EMPLOY EE COST IS INCLUDED BY MANY COMPANIES UNDER DIFFERENT OTHER HEADS. SELECT ION OF COMPARABLES APPLYING THE ONSITE INCOME FILTER ALS O STANDS ON THE SAME FOOTING AS RELEVANT DATA / INFORMATION ARE NOT AVAILABLE IN RESPECT OF ALL THE COMPANIES IN THE DATABASE. IT IS ALSO A FACT THAT THOUGH THE TPO HAS HIMSELF NOT APPLIED THIS FILTER BY OBSERVIN G THAT THE COMPANIES HAVING ONSITE INCOME OR MORE THAN 75% CANNOT BE TRE ATED AS COMPARABLES BUT TWO OF THE COMPANIES I.E. M/S. FOUR SOFT LIMITED AND SANKYA INFOTECH LIMITED SELECTED AS COMPARABLES BY THE TPO WERE HAVING ONSITE INCOME / EXPENSES OF MORE THAN 75%. IN THIS VIEW OF THE MATTER, THE CIT(A) WAS CORRECT IN HOLDING THAT REJE CTION OF COMPARABLES SELECTED BY THE ASSESSEE BY APPLYING THIS FILTER IS NOT CORRECT. WE ALSO FULLY SUBSCRIBE TO THE VIEW OF THE CIT(A) THAT LOSS MAKING COMPANIES AND COMPANIES HAVING SUPER NORMAL PROFITS CANNOT BE CONSIDERED AS COMPARABLES IN VIEW OF THE RATIO LAID DOWN IN CASE OF MENTOR GRAPHICS (INDIA) PVT. LTD. VS. DCIT (109 ITD 101) AND PHILIP S SOFTWARE (119 TTJ 721). IN AFORESAID VIEW OF THE MATTER, THE COMPANI ES SELECTED BY THE CIT(A) AS COMPARABLES IS RATIONAL AND APPROPRIATE I N THE FACTS OF THE PRESENT CASE. WE THEREFORE UPHOLD THE ORDER OF THE CIT(A) IN DIRECTING THE ASSESSING OFFICER TO COMPUTE THE ARITHMETIC MEA N OF 11 COMPARABLES SELECTED BY HIM AND DETERMINE THE ALP A FTER COMPUTING THE ADJUSTED AVERAGE PLI. AS RESULT, GROUNDS NOS.1 ,2 AND 3 ARE DISMISSED. [UNDERLINED FOR EMPHASIS BY US] 42. THE AFORESAID DECISION WAS RELIED FOR THE PROPO SITION THAT ON-SITE INCOME FILTER COULD NOT BE APPLIED TO REJECT CERTAI N COMPANIES FROM BEING CONSIDERED AS COMPARABLES. IN THIS CONTEXT, A PERU SAL OF DECISION OF THE HYDERABAD BENCH OF THE TRIBUNAL DATED 15.01.2013 (S UPRA) REVEALS THAT THE APPLICATION OF SUCH FILTER WAS SET-ASIDE BY THE CIT (A) ON THE GROUND THAT THE ITA NO.94/PN/2014 RELATIVE DATA / INFORMATION WAS NOT AVAILABLE IN RE SPECT OF THE COMPARABLES IN QUESTION. THE AFORESAID DECISION OF THE CIT(A) WAS AFFIRMED BY THE TRIBUNAL AND IT IS QUITE CLEAR THAT THERE IS NO DISCUSSION A S TO WHETHER OR NOT SUCH A FILTER IS A RELEVANT CRITERIA TO UNDERTAKE COMPARABILITY A NALYSIS. IN THE PRESENT CASE BEFORE US, IT IS NOT THE CASE OF THE ASSESSEE THAT THE APPLICATION OF ON-SITE INCOME CRITERIA APPLIED BY THE TPO CAN BE DEFEATED ON THE GROUND THAT THE RELEVANT INFORMATION IS NOT AVAILABLE. THEREFORE, IN THE PRESENT CASE, WE HAVE DECIDED THE ISSUE ON ITS OWN MERITS AND THE DECISIO N OF THE HYDERABAD BENCH OF THE TRIBUNAL STANDS ON A DIFFERENT FOOTING. WE ARE ONLY TRYING TO POINT OUT THE AFORESAID TO SAY THAT THE DECISION IN THE CASE OF AKSHY SOFTWARE TECHNOLOGIES LIMITED (SUPRA), NO WAY CONTRADICTS OU R CONCLUSION ON THIS ASPECT IN THE EARLIER PARAS. THEREFORE, IN OUR VIE W, THE TPO WAS JUSTIFIED IN EXCLUDING AKSHY SOFTWARE TECHNOLOGIES LIMITED FROM THE FINAL SET OF COMPARABLES. THUS, ON THIS ASPECT, THE ASSESSEE HA S TO FAIL. 41. FOLLOWING THE AFORESAID PRECEDENT IN THE ASSESS EES OWN CASE FOR ASSESSMENT YEAR 2008-09 (SUPRA), WE HEREBY AFFIRM T HE ACTION OF THE TPO IN EXCLUDING (I) AKSHAY SOFTWARE TECHNOLOGIES LTD.; (I I) THINKSOFT GLOBAL SERVICES LTD.; AND, (III) ZYLOG SYSTEMS LIMITED FROM THE FIN AL SET OF COMPARABLES. THUS, ON THIS ASPECT ASSESSEE FAILS. 42. BY WAY OF GROUND OF APPEAL NO.4.9, ASSESSEE HAS ASSAILED THE ACTION OF THE TPO IN EXCLUDING HELIOS AND MATHESON LTD. FR OM THE FINAL SET OF COMPARABLES. THE TPO HAS EXCLUDED THE SAID CONCERN FROM THE FINAL SET OF COMPARABLES ON THE GROUND THAT THE ANNUAL ACCOUNTS OF THE SAID CONCERN COVERED A PERIOD OF 18 MONTHS WHEREAS THE COMPARABL E DATA SHOULD BE FOR 12 MONTHS FOR RELIABLE COMPARABILITY. 43. IN THIS CONTEXT, THE FACTUAL MATRIX IS THAT ASS ESSEES FINANCIAL YEAR UNDER CONSIDERATION IS FOR THE PERIOD 01.04.2008 TO 31.03 .2009 WHEREAS THE DATA OF THE SAID CONCERN AVAILABLE IN PUBLIC DOMAIN IS OF A DIFFERENT FINANCIAL YEAR I.E. FROM 01.04.2008 TO 30.09.2009, WHICH COMPRISES OF A PERIOD OF 18 MONTHS. IN THIS FACTUAL BACKGROUND, WE FIND NO ERROR IN THE AP PROACH OF THE TPO IN EXCLUDING THE SAID CONCERN FROM THE LIST OF COMPARA BLES BECAUSE THE FINANCIAL DATA OF THE SAID CONCERN AVAILABLE IN PUBLIC DOMAIN DOES NOT CORRESPOND TO THE FINANCIAL YEAR OF THE ASSESSEE UNDER CONSIDERATION. OSTENSIBLY, RULE 10B(4) OF ITA NO.94/PN/2014 THE INCOME TAX RULES, 1962 (IN SHORT THE RULES) P ROVIDE THAT THE DATA TO BE USED IN ANALYZING THE COMPARABILITY OF AN UNCONTROL LED TRANSACTION WITH THE INTERNATIONAL TRANSACTION SHALL BE THE DATA RELATIN G TO THE FINANCIAL YEAR IN WHICH THE INTERNATIONAL TRANSACTIONS HAVE BEEN ENTERED IN TO. QUITE CLEARLY, IN THE PRESENT SITUATION, THE FINANCIAL DATA OF HELIOS AND MATHESON LTD. AVAILABLE IN PUBLIC DOMAIN DOES NOT CONFORM TO THE FINANCIAL YEA R IN WHICH THE INTERNATIONAL TRANSACTIONS IN QUESTION HAVE BEEN CARRIED OUT BY T HE ASSESSEE. THEREFORE, THE TPO JUSTIFIABLY EXCLUDED THE SAID CONCERN FROM THE FINAL SET OF COMPARABLES, WHICH WE HEREBY AFFIRM. THUS, ASSESSE E FAILS ON GROUND OF APPEAL NO.4.9. 44. BEFORE PARTING, WE MAY ALSO DEAL WITH AN ADDITI ONAL PLEA RAISED BY THE ASSESSEE SEEKING EXCLUSION OF BODHTREE CONSULTING L TD. FROM THE FINAL SET OF COMPARABLES. ACCORDING TO THE LD. REPRESENTATIVE F OR THE ASSESSEE, THE SAID CONCERN IS LIABLE TO BE EXCLUDED AS IT HAS ABNORMAL TRENDS IN ITS PROFITABILITY FOR THE YEAR UNDER CONSIDERATION. ACCORDING TO THE LD. REPRESENTATIVE FOR THE ASSESSEE, THE SAID CONCERN IS AN ABNORMALLY HIGH PR OFIT MAKING CONCERN AND ITS MARGIN FOR THE YEAR UNDER CONSIDERATION IS 62.2 9%. IT IS CONTENDED THAT ABNORMAL HIGH PROFIT-MAKING CONCERNS OUGHT TO BE EX CLUDED FROM THE FINAL SET OF COMPARABLES AS IT WOULD SKEW THE RESULTS OF THE COMPARABILITY ANALYSIS. IT WAS POINTED OUT THAT ASSESSEE IS A CAPTIVE SERVICE PROVIDER AND HAS TRANSACTED ONLY WITH ASSOCIATED ENTERPRISES AND IS BEING COMPENSATED ON COST PLUS AGREED MARKUP IN RESPECT OF THE SOFTWARE SERVI CES RENDERED. THE ASSESSEE ALSO DOES NOT BEAR THE SIGNIFICANT RISKS A S COMPARED TO COMPARABLES WHICH ARE FULL RISK BEARING ENTITIES. THEREFORE, A CONCERN WHICH HAS ABNORMALLY HIGH LEVEL OF PROFITS OR WHICH WITNESSES WIDE FLUCT UATIONS IN PROFIT MARGINS OVER A PERIOD OF TIME SHOULD BE EXCLUDED FROM THE FINAL SET OF COMPARABLES. IN- PARTICULAR, RELIANCE HAS BEEN PLACED ON THE DECISIO N OF THE BANGALORE BENCH OF THE TRIBUNAL IN THE CASE OF M/S MINDTECK (INDIA) LT D. VS. DCIT VIDE IT(TP)A ITA NO.94/PN/2014 NO.70/BANG/2014 DATED 21.08.2014 WHEREIN, UNDER SIM ILAR CIRCUMSTANCES, M/S BODHTREE CONSULTING LTD. HAS BEEN HELD TO BE EXCLUD IBLE FROM THE FINAL SET OF COMPARABLES ON ACCOUNT OF WIDE FLUCTUATIONS IN ITS MARGINS OVER THE YEARS. RELIANCE HAS ALSO BEEN PLACED ON THE DECISION OF TH E SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MAERSK GLOBAL CENTRES (INDI A) PVT. LTD. VS. ACIT VIDE ITA NO.7466/MUM/2012 DATED 07.03.2014 IN THIS CONTE XT. THE LD. REPRESENTATIVE ALSO POINTED OUT THAT UNDER IDENTICA L CIRCUMSTANCES M/S BODHTREE CONSULTING LTD. HAS BEEN FOUND TO BE EXCLU DIBLE BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF Q LOGIC (INDIA) PVT. LTD. VS. DCIT VIDE ITA NO.227/PN/2014 DATED 21.10.2014 AND ALSO IN THE CAS E OF PTC SOFTWARE (INDIA) PVT. LTD. VS. DCIT VIDE ITA NO.336/PN/2014 DATED 31.10.2014. 45. THE LD. CIT-DR APPEARING FOR THE REVENUE VEHEME NTLY POINTED OUT THAT THE SAID CONCERN HAS BEEN CONSIDERED AS A COMPARABL E BY THE ASSESSEE IN THE TRANSFER PRICING STUDY ITSELF AND THEREFORE THERE W AS NO JUSTIFICATION FOR THE ASSESSEE TO SEEK ITS EXCLUSION AT THIS STAGE. 46. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. OSTENSIBLY, THE CONTROVERSY AS TO WHETHER ABNORMAL PROFIT-MAKING CO NCERNS OUGHT TO BE EXCLUDED FROM THE LIST OF COMPARABLES OR NOT, HAS B EEN A SUBJECT MATTER OF CONSIDERATION BY THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF MAERSK GLOBAL CENTRES (INDIA) PRIVATE LTD. VS. ACIT VIDE I TA NO.7466/MUM/2012 DATED 07.03.2014. THE RELEVANT OBSERVATIONS OF THE SPECIAL BENCH ARE AS UNDER :- IN GENERALITY, WE ARE OF THE VIEW THAT THE ANSWER TO THIS QUESTION WILL DEPEND ON THE FACTS AND CIRCUMSTANCES OF EACH CASE INASMUC H AS POTENTIAL COMPARABLE EARNING ABNORMALLY HIGH PROFIT MARGIN SH OULD TRIGGER FURTHER INVESTIGATION IN ORDER TO ESTABLISH WHETHER IT CAN BE TAKEN AS COMPARABLE OR NOT. SUCH INVESTIGATION SHOULD BE TO ASCERTAIN AS T O WHETHER EARNING OF HIGH PROFIT REFLECTS A NORMAL BUSINESS CONDITION OR WHET HER IT IS THE RESULT OF SOME ABNORMAL CONDITIONS PREVAILING IN THE RELEVANT YEAR . THE PROFIT MARGIN EARNED BY SUCH ENTITY IN THE IMMEDIATELY PRECEDING YEAR/S MAY ALSO BE TAKEN INTO CONSIDERATION TO FIND OUT WHETHER THE HIGH PROFIT M ARGIN REPRESENTS THE NORMAL ITA NO.94/PN/2014 BUSINESS TREND. THE FAR ANALYSIS IN SUCH CASE MAY B E REVIEWED TO ENSURE THAT THE POTENTIAL COMPARABLE EARNING HIGH PROFIT S ATISFIES THE COMPARABILITY CONDITIONS. IF IT IS FOUND ON SUCH INVESTIGATION TH AT THE HIGH MARGIN PROFIT MAKING COMPANY DOES NOT SATISFY THE COMPARABILITY A NALYSIS AND OR THE HIGH PROFIT MARGIN EARNED BY IT DOES NOT REFLECT THE NOR MAL BUSINESS CONDITION, WE ARE OF THE VIEW THAT THE HIGH PROFIT MARGIN MAKING ENTITY SHOULD NOT BE INCLUDED IN THE LIST OF COMPARABLE FOR THE PURPOSE OF DETERM INING THE ARM'S LENGTH PRICE OF AN INTERNATIONAL TRANSACTION. OTHERWISE, THE ENT ITY SATISFYING THE COMPARABILITY ANALYSIS WITH ITS HIGH PROFIT MARGIN REFLECTING NORMAL BUSINESS CONDITION SHOULD NOT BE REJECTED SOLELY ON THE BASI S OF SUCH ABNORMAL HIGH PROFIT MARGIN.' 47. IN TERMS OF THE AFORESAID DISCUSSION BY THE SPE CIAL BENCH, IT IS CLEAR THAT A CONCERN WHICH HAS EARNED ABNORMALLY HIGH PRO FIT MARGIN CANNOT BE EXCLUDED STRAIGHTAWAY BUT IT WOULD REQUIRE FURTHER INVESTIGATIONS TO ASCERTAIN THE REASONS FOR THE HIGH PROFIT MARGIN. IT WOULD B E NECESSARY TO ASCERTAIN AS TO WHETHER THE HIGH PROFIT MARGINS REFLECT A NORMAL BU SINESS PHENOMENON OR WHETHER IT IS A RESULT OF CERTAIN ABNORMAL CONDITIO NS PREVAILING IN A PARTICULAR YEAR. IN ORDER TO DO SO, THE PROFIT MARGINS EARNED BY SUCH A CONCERN IN THE PROXIMATE PRECEDING AND SUCCEEDING YEARS WOULD BE R EQUIRED TO BE CONSIDERED. IN THIS BACKGROUND OF THE MATTER, ASSE SSEE HAS FURNISHED BEFORE US THE OPERATING MARGIN TRENDS OF THE SAID CONCERN OVER SIX FINANCIAL YEARS I.E. FOR THREE PRECEDING YEARS, CURRENT YEAR AND THE TWO SUCCEEDING FINANCIAL YEARS. ON THE BASIS OF AFORESAID TABULATION, IT IS SOUGHT TO BE POINTED OUT THAT THERE EXISTS WIDE FLUCTUATION IN PROFIT MARGINS WHICH OST ENSIBLY DOES NOT REFLECT A NORMAL BUSINESS PHENOMENON. WE FIND THAT THE BANGA LORE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. MINDTECK (INDIA) LTD. (SUPRA) CONSIDERED A SIMILAR PLEA WITH RESPECT TO THE EXCLUSION OF BODHTREE CONS ULTING LTD. ON THE GROUND OF IT BEING A ABNORMALLY HIGH PROFIT MAKING CONCERN. THE ASSESSMENT YEAR BEFORE THE BANGALORE BENCH WAS 2009-10, WHICH IS ALSO THE YEAR BEFORE US. THE OPERATIVE PART OF THE ORDER OF THE BANGALORE BENCH READS AS UNDER :- 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE SPECIAL BENCH OF THE ITAT IN THE CASE OF MAERSK GLOBAL CENTRES (SUPRA) H AD AN OCCASION TO DEAL WITH THE QUESTION AS TO WHETHER HIGH PROFIT MARGIN MAKING COMPANIES SHOULD BE EXCLUDED AS A COMPARABLE. THE SPECIAL BENCH AFT ER CONSIDERING SEVERAL ASPECTS HELD IN PARA 88 OF ITS ORDER THAT THE POTEN TIAL COMPARABLE COMPANIES CANNOT BE EXCLUDED MERELY ON THE GROUND THAT THEIR PROFIT IS ABNORMALLY HIGH. ITA NO.94/PN/2014 THE SPECIAL BENCH HELD THAT IN SUCH CASES IT WOULD REQUIRE FURTHER INVESTIGATION TO ASCERTAIN THE REASONS FOR UNUSUALL Y HIGH PROFIT AND IN ORDER TO ESTABLISH WHETHER THE ENTITIES WITH SUCH HIGH PROFI TS CAN BE TAKEN AS COMPARABLE OR NOT. IN THE LIGHT OF THE AFORESAID D ECISION OF THE SPECIAL BENCH AND IN VIEW OF THE ADMITTED POSITION THAT THE ASSES SEE FOLLOWS FIXED PRICE PROJECT MODEL WHERE REVENUES FROM SOFTWARE DEVELOPM ENT IS RECOGNIZED BASED ON SOFTWARE DEVELOPED AND BILLED TO CLIENTS, THERE IS A POSSIBILITY OF THE EXPENDITURE IN RELATION TO THE REVENUE BEING BOOKED IN THE EARLIER YEAR. THE RESULTS OF BODHTREE FROM FY 2003 TO 2008 EXCLUDING FY 2007 AS GIVEN BY THE LEARNED COUNSEL FOR THE ASSESSEE WERE ALSO PERUSED. PERUSAL OF THE SAME SHOWS, THAT THERE HAS BEEN A CONSISTENT CHANGE IN T HE OPERATING MARGINS. THE CHART FILED BY THE ASSESSEE IN THIS REGARD IS G IVEN AS AN ANNEXURE TO THIS ORDER. IT APPEARS TO US THAT THE REVENUE RECOGNITI ON METHOD FOLLOWED BY THE ASSESSEE IS THE REASON FOR THE DRASTIC VARIATION IN THE PROFIT MARGINS OF THIS COMPANY. IN THE GIVEN CIRCUMSTANCES, WE ARE OF THE VIEW THAT IT WOULD BE SAFE TO EXCLUDE BODHTREE CONSULTING FROM THE FINAL LIST OF COMPARABLES CHOSEN BY THE ASSESSEE. WE HOLD AND DIRECT ACCORDINGLY. 48. THE AFORESAID DISCUSSION OF THE BANGALORE BENCH OF THE TRIBUNAL SHOWS THAT THE ASSESSEE IS JUSTIFIED IN ASCERTAINING THAT MARGINS OF THE SAID CONCERN FOR THE YEAR UNDER CONSIDERATION DOES NOT REFLECT A NORMAL BUSINESS TREND AND THEREFORE THE INCLUSION OF THE SAID CONCERN IN THE FINAL SET OF COMPARABLES WOULD NOT LEND CREDIBILITY TO THE COMPARABILITY ANA LYSIS. THE BANGALORE BENCH IN THE CASE OF MINDTECK (INDIA) LTD. (SUPRA) NOTED THAT THE REVENUE RECOGNITION METHOD FOLLOWED BY THE SAID CONCERN WAS, THE REASON FOR THE DRASTIC VARIATION IN PROFIT MARGINS OF BOTDTREE CONSULTING LTD., AND THUS UPHELD ITS EXCLUSION FROM THE FINAL SET OF COMPARABLES. 49. HOWEVER, THE PLEA RAISED BY THE LD. CIT-DR IS T HAT THE SAID CONCERN WAS INITIALLY INCLUDED BY THE ASSESSEE IN ITS TRANS FER PRICING STUDY AS A COMPARABLE AND THEREFORE ASSESSEE CANNOT SEEK ITS E XCLUSION AT THIS STAGE. THIS ASPECT OF THE CONTROVERSY HAS BEEN CONSIDERED BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF Q LOGIC (INDIA) PVT. LTD. ( SUPRA) IN THE FOLLOWING WORDS :- 16. IN SO FAR AS THE PLEA RAISED BY THE LEARNED CI T-DR TO THE EFFECT THAT THE SAID CONCERN WAS INITIALLY INCLUDED BY THE ASSE SSEE IN ITS TRANSFER PRICING STUDY AS A COMPARABLE IS CONCERNED, THE APPELLANTS REPRESENTATIVE POINTED OUT THAT IN THE TRANSFER PRICING STUDY, ASSESSEE HA D CARRIED OUT THE COMPARABILITY ANALYSIS BY ADOPTING MULTIPLE YEARS DATA OF THE COMPARABLES WHICH HAD OFF-SET THE WIDE FLUCTUATIONS. HOWEVER, THE TPO HAS DIS-AGREED WITH THE ASSESSEE ON THE ADOPTION OF MULTIPLE YEAR S FINANCIAL DATA OF THE COMPARABLES AND INSTEAD, HE HAS CARRIED OUT THE COM PARABILITY ANALYSIS AFTER ADOPTING SINGLE YEAR DATA OF THE COMPARABLES RELATA BLE TO THE PERIOD UNDER ITA NO.94/PN/2014 CONSIDERATION. IT HAS ALSO BEEN SUBMITTED THAT THE CHANDIGARH SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. QUARK SYSTE MS PRIVATE LTD. (ITA NO.100, 105/CHD/2009) (CHD) HAS HELD THAT IF SOME I NCONSISTENCY IN A COMPARABLE EXISTS, THEN IT SHOULD BE REMOVED FROM T HE FINAL LIST OF COMPARABLES NOTWITHSTANDING THE FACT THAT ASSESSEE HAD INITIALLY CONSIDERED IT AS A COMPARABLE. 17. IN OUR CONSIDERED OPINION, THE PLEA OF THE ASSE SSEE FOR EXCLUSION OF BODHTREE CONSULTING LTD. FROM THE FINAL LIST OF COM PARABLES 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 CON CERN HAS BEEN ADOPTED AS A COMPARABLE. IN THE PRESENT SITUATION, CASE HAS B EEN SET UP BY THE ASSESSEE FOR EXCLUSION OF BODHTREE CONSULTING LTD ON THE GRO UND THAT THE PROFIT MARGINS OF THE SAID CONCERN ARE FLUCTUATING WIDELY AND ARE ABNORMALLY HIGH FOR THE PERIOD UNDER CONSIDERATION. OSTENSIBLY, THE FINANC IAL DATA OF THE SUCCEEDING YEARS WHICH HAS BEEN PRESSED INTO SERVICE BY THE AS SESSEE TO DEMONSTRATE ABNORMAL PROFIT TRENDS OF THE SAID CONCERN WAS NOT AVAILABLE WITH THE ASSESSEE AT THE TIME OF CARRYING OUT ITS TRANSFER PRICING ST UDY. THEREFORE, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE, IN OUR VIEW, ASSESSEE HAS JUSTIFIABLY DEMONSTRATED THAT THE CONCERN M/S. BODH TREE CONSULTING LTD. IS LIABLE TO BE EXCLUDED FROM THE FINAL SET OF COMPARA BLES, EVEN THOUGH THE SAID CONCERN WAS CONSIDERED AS A COMPARABLE INITIALLY IN ITS TRANSFER PRICING STUDY. THEREFORE, ON THIS ASPECT, WE CONCLUDE BY HOLDING T HAT THE CONCERN, M/S. BODHTREE CONSULTING LTD. BE EXCLUDED FROM THE FINAL LIST OF COMPARABLES FOR CARRYING OUT THE COMPARABILITY ANALYSIS. WE HOLD S O. 50. FOLLOWING THE AFORESAID PRECEDENT, WE THEREFORE UPHOLD ASSESSEES PLEA FOR EXCLUSION OF BODHTREE CONSULTING LTD. FROM THE FINAL SET OF COMPARABLES, EVEN THOUGH THE SAID CONCERN WAS CONSIDERED AS A CO MPARABLE INITIALLY BY THE ASSESSEE IN ITS TRANSFER PRICING STUDY. THUS, ON T HIS ASPECT ASSESSEE SUCCEEDS. 51. IN THE RESULT, WE CONCLUDE BY DIRECTING THE ASS ESSING OFFICER/TPO TO RE- COMPUTE THE ARM'S LENGTH PRICE OF THE INTERNATIONAL TRANSACTIONS AFTER CONSIDERING OUR AFORESAID DECISION ON VARIOUS ASPEC TS OF THE MATTER. NEEDLESS TO SAY, THE ASSESSING OFFICER/TPO SHALL ALLOW THE A SSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD BEFORE DETERMINING THE A RM'S LENGTH PRICE IN RELATION TO THE INTERNATIONAL TRANSACTIONS OF PROVISION OF S OFTWARE DEVELOPMENT SERVICES ITA NO.94/PN/2014 AS PER LAW AND KEEPING IN VIEW OUR AFORESAID DIRECT IONS. THUS, ASSESSEE PARTLY SUCCEEDS IN THIS APPEAL. 52. IN SO FAR AS THE GROUND OF APPEAL NOS.5, 6 AND 7 ARE CONCERNED, THE SAME HAVE NOT PRESSED AT THE TIME OF HEARING AND AC CORDING THE SAME ARE DISMISSED AS NOT PRESSED. 53. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED ON 10 TH APRIL, 2015. SD/- SD /- (SUSHMA CHOWLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 10 TH APRIL, 2015. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE DRP, PUNE; 4) THE DIT (INTERNATIONAL TAXATION), PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE