DCIT, Bangalore V. M/s LG Soft India Pvt. Ltd., Bangalore

ITA 97/BANG/2016

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9054 (ITAT-BANGALORE)
• Duration Of Justice: 4 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2020
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 30-07-2020
• Assessment Year: 2011-2012
• Appeal Filed On: 29-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: K R VASUDEVAN
• Assessee Lawyers: PRADEEP KUMAR ITAT BENGALURU
• Keywords: Related party transaction; Transfer pricing; International transaction
• Section: 143(3); 144C; 13; 92CA; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, VICE PRESIDENT AND SHRI B R BASKARAN , ACCOUNTANT MEMBER IT (TP) A NO. 52/BANG/2016 ASSESSMENT YEAR: 2011 - 12 M/S. LG SOFT INDIA PVT. LTD., EMBASSY TECH SQUARE, MARATHAHALLI SARJAPUR OUTER RING ROAD, MARATHAHALLI, BANGALORE 560 103. PAN: AAACL 3009P VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1), BANGALORE. APPELLANT RESPONDENT IT (TP) A NO. 97/BANG/2016 ASSESSMENT YEAR: 2011 - 12 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 4(1)(1), BANGALORE. VS. M/S. LG SOFT INDIA PVT. LTD., BANGALORE 560 103. PAN: AAACL 3009P APPELLANT RESPONDENT APPELLANT BY : SHRI K.R. VASUDEVAN, ADVOCATE RESPONDENT BY : SHRI PRADEEP KUMAR, CIT(DR)(I TAT), BENGALURU. DATE OF HEARING : 30.07 .2020 DATE OF PRONOUNCEMENT : 05 . 08 .2020 IT(TP)A NOS.52 & 97/BANG/2016 PAGE 2 OF 10 O R D E R PER N.V. VASUDEVAN, VICE PRESIDENT IT(TP)A NO.97/BANG/2016 IS AN APPEAL BY THE REVE NUE WHILE IT(TP)A NO.52/BANG/2016 IS AN APPEAL BY THE ASSESSE E. BOTH THESE APPEALS ARE DIRECTED AGAINST THE FINAL ORDER OF ASS ESSMENT DATED 30.11.2015 OF DCIT, CIRCLE 4(1)(1), BENGALURU, PASS ED U/S. 143(3) R.W.S. 144C OF THE INCOME-TAX ACT, 1961 [THE ACT] IN RELAT ION TO ASSESSMENT YEAR 2011-12. 2. THE MAIN ISSUE TO BE DECIDED IN THIS APPEAL IS W ITH REGARD TO THE CORRECTNESS OF THE DETERMINATION OF ARMS LENGTH PR ICE [ALP] IN RESPECT OF INTERNATIONAL TRANSACTION ENTERED INTO BY THE ASSES SEE WITH ITS ASSOCIATE ENTERPRISE [AE]. THE ASSESSEE IS AN INDIAN COMPAN Y AND IS A 100% OWNED SUBSIDIARY OF LG ELECTRONICS, SOUTH KOREA. T HE ASSESSEE PROVIDES SOFTWARE DEVELOPMENT [SWD] SERVICES TO ITS AE. IT WAS NOT IN DISPUTE THAT THE RENDERING OF SWD SERVICES BY THE ASSESSEE TO IT S AE IS AN INTERNATIONAL TRANSACTION AND THAT THE INCOME ARISING FROM THE SA ID INTERNATIONAL TRANSACTION HAS TO BE DETERMINED KEEPING IN VIEW TH E ALP AS IS REQUIRED U/S. 92 OF THE ACT. 3. IT IS NOT IN DISPUTE BETWEEN THE ASSESSEE AND TH E REVENUE THAT THE TRANSACTION NET MARGIN METHOD (TNMM) WAS THE MOST A PPROPRIATE METHOD (MAM) FOR DETERMINATION OF ALP AND THAT THE PROFIT LEVEL INDICATOR TO BE ADOPTED FOR COMPARISON OF THE ASSESSEES PROFIT WIT H THAT OF COMPARABLE COMPANIES WAS OPERATING PROFIT/TOTAL COST (OP/TC). THE OP/TC OF THE ASSESSEE WAS 14.20%. THE ASSESSEE IN ITS TP STUDY SELECTED 13 COMPARABLE COMPANIES WHOSE ARITHMETIC MEAN OF OP/TC WAS ARRIVED AT 13.71%. SINCE THE PROFIT MARGIN OF THE ASSESSEE WA S MORE THAN THE ARITHMETIC MEAN OF OP/TC OF THE 13 COMPARABLES SELE CTED BY THE ASSESSEE, IT WAS CLAIMED BY THE ASSESSEE THAT THE P RICE CHARGED BY IT IN IT(TP)A NOS.52 & 97/BANG/2016 PAGE 3 OF 10 THE INTERNATIONAL TRANSACTION WAS AT ARMS LENGTH. THE TRANSFER PRICING OFFICER (TPO) TO WHOM THE DETERMINATION OF ALP WAS REFERRED BY THE AO, ACCEPTED 2 (ACROPETAL TECHNOLOGIES LTD., AND R.S. S OFTWARE INDIA LTD.) OUT OF THE 13 COMPARABLE COMPANIES SUGGESTED IN THE TP STUDY BY THE ASSESSEE AS COMPARABLE WITH THE ASSESSEE. THE TPO ON HIS OWN SELECTED 11 OTHER COMPANIES AS COMPARABLE COMPANIES WITH THE ASSESSEE. THUS A FINAL SET OF 13 COMPARABLE COMPANIES WAS CHO SEN BY THE TPO AS COMPARABLE COMPANIES. THE ARITHMETIC MEAN OF PROFI T MARGIN OF THESE COMPANIES AFTER AND BEFORE ADJUSTMENT TOWARDS WORKI NG CAPITAL ADJUSTMENT WAS AS FOLLOWS:- SL. NO. NAME OF THE COMPANY MARGIN ON COST (2011) ADJUSTED MARGIN 1. ACROPETAL TECHNOLOGIES LTD. 4.58% 30.32% 2. E-ZEST SOLUTIONS 21.03% 20.96% 3. E-INFOCHIPS LTD. 56.44% 56.68% 4. EVOKE TECHNOLOGIES LTD. 8.11% 10.42% 5. ICRA TECHNO ANALYTICS LTD. 24.83% 24.68% 6. INFOSYS LTD. 43.39% 44.51% 7. LARSEN & TOUBRO INFOTECH LTD 19.83% 21.85% 8. MINDTREE LTD. (SEG) 10.66% 11/62% 9. PERSISTENT SYSTEMS & SOLUTIONS LTD. 22.12% 23.10% 10. PERSISTENT SYSTEMS LTD. 22.84% 23.52% 11. R S SOFTWARE INDIA LTD. 16.37% 18.32% 12. SASKEN COMMUNICATION TECHNOLOGIES LTD. 24.13% 26.31% 13. TATA ELXSI LTD. 20.91% 20.96% ARITHMETIC MEAN 24.82% 25.24% LESS: WORKING CAPITAL ADJUSTMENT - 1.02% ADJUSTED ARITHMETIC MEAN 25.84% 4. BASED ON THE ABOVE, THE TPO DETERMINED THE AVE RAGE ARITHMETIC PROFIT MARGIN OF COMPARABLE COMPANIES TO BE 24.82% AND HENCE PROPOSED THE TRANSFER PRICING ADJUSTMENT OF RS. 23,50,98,339 AS FOLLOWS: IT(TP)A NOS.52 & 97/BANG/2016 PAGE 4 OF 10 COMPUTATION OF ARMS LENGTH PRICE ARMS LENGTH MARGIN 24.82% LESS: WORKING CAPITAL ADJUSTMENT - 1.02% ADJUSTED ARITHMETIC MEAN PLI (A) 25.84% OPERATING COST (B) 2,02,00,61,707 ALP [125.84% OF B] 2,54,20,45,652 PRICE RECEIVED 2,30,69,47,313 SHORTFALL BEING ADJUSTMENT U/S. 92CA 23,50,98,339 5. THE AO INCORPORATED THE ADDITION TO TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF SHORTFALL IN ALP IN HIS DRAFT ASSESSM ENT ORDER. THE ASSESSEE FILED OBJECTIONS BEFORE THE DISPUTES RESOLUTION PAN EL (DRP) AGAINST THE DRAFT ORDER OF ASSESSMENT. 6. THE DRP EXCLUDED 10 OUT OF 13 COMPARABLE COMPANI ES SELECTED BY THE TPO AND RETAINED THREE COMPARABLE COMPANIES VIZ ., PERSISTENT SYSTEMS & SOLUTIONS LTD., SASKEN COMMUNICATION TECH NOLOGIES LTD. & PERSISTENT SYSTEMS LTD. THE AO PASSED FINAL ORDER OF ASSESSMENT IN ACCORDANCE WITH THE DIRECTIONS OF THE DRP. AGGRIEV ED BY THE FINAL ORDER OF ASSESSMENT EXCLUDING 10 COMPARABLE COMPANIES, THE R EVENUE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL AND THE GROUNDS OF APPEAL READS AS FOLLOWS:- 1. THE DIRECTIONS OF THE DISPUTE RESOLUTION PANEL ARE OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE HON'BLE DRP IS CORRECT IN HOLDING THAT M/S A CROPETAL TECHNOLOGIES LTD, E-ZEST SOLUTIONS LTD, E-INFOCHIPS LTD, ICRA TECHNO ANALYTICS, INFOSYS TECHNOLOGIES LTD, LARSEN & TOUBRO INFOTECH LTD, RS SOFTWARE, EVOKE TECHNOLOGIES, MIND TREE LTD, & TATA ELXSI CANNOT BE TAKEN AS COMPARABLES, BEING FUNCTIONALLY DIFFERENT WHEN IT SATISFIES ALL THE QUALITATIVE AND QUANTITATIVE FILTERS APPLIED BY THE TPO. IT(TP)A NOS.52 & 97/BANG/2016 PAGE 5 OF 10 3. THE HON'BLE DRP BANGALORE, INSTEAD OF RELYING ON DECISION OF ITAT, OUGHT TO HAVE DECIDED THE COMPARA BILITY OF THESE COMPANIES ON THE BASIS OF SPECIFIC FACTS BROU GHT ON RECORD BY THE TPO IN THE CASE OF THE ASSESSEE. 4. WHETHER A COMPARABLE MAY BE CONSIDERED AS ENGAGE D IN SOFTWARE PRODUCT BUSINESS MERELY BECAUSE IT HAS DEV ELOPED SOFTWARE PRODUCT BY FOLLOWING SOFTWARE DEVELOPMENT PROCESS WITHOUT HAVING LEGAL OWNERSHIP ON SUCH SOFTWARE PRO DUCT? 5. WHETHER WHILE SEEKING THE EXACT COMPARABILITY AS MENTIONED ABOVE THE DRP WAS RIGHT IN FACT AND IN LA W IN IMPOSING CONDITION BEYOND LAW WHERE THE REQUIREMENT OF LAW IS TO ACKNOWLEDGE ONLY THOSE DIFFERENCES THAT ARE LIKE LY TO MATERIALLY AFFECT THE MARGIN. 6. WHETHER THE DRP WAS RIGHT IN SEEKING EXACT COMPA RABILITY WHILE SEARCHING FOR COMPARABLES COMPANIES OF THE AS SESSEE UNDER TNMM METHOD WHEREAS REQUIREMENT OF LAW AND INTERNAT IONAL JURISPRUDENCE REQUIRE SEEKING SIMILAR COMPARABLE CO MPANIES. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND / OR DELETE ANY OF THE GROUNDS MENTIONED ABOVE. 7. AS FAR AS THE ASSESSEES APPEAL IS CONCERNED, TH E ASSESSEE HAS RAISED AS MANY AS 16 GROUNDS OF APPEAL AGAINST THE ADJUSTMENT ON ACCOUNT OF DETERMINATION OF ALP IN THE FINAL ORDER OF ASSES SMENT. HOWEVER, AT THE TIME OF HEARING OF APPEAL, THE LD. COUNSEL FOR THE ASSESSEE PRESSED FOR ADJUDICATION OF ONLY GROUNDS NO.13 & 15, WHICH READ AS UNDER:- 13. THE LEARNED AO/LEARNED TPO ERRED IN INCLUDING COMPANIES THAT DO NOT SATISFY THE TEST OF COMPARABI LITY. SPECIFICALLY, THE FOLLOWING COMPANY SHOULD HAVE BEE N REJECTED: 1) PERSISTENT SYSTEMS AND SOLUTIONS LIMITED 2) SASKEN COMMUNICATIONS TECHNOLOGIES LIMITED 3) PERSISTENT SYSTEMS LIMITED . IT(TP)A NOS.52 & 97/BANG/2016 PAGE 6 OF 10 15. THE LEARNED AO ERRED IN REJECTING COMPANIES A S PER THE DIRECTIONS OF THE HONBLE DRP WHICH ARE OTHERWISE A CCEPTABLE TO BOTH THE APPELLANT AND THE LEARNED TPO: 1) R S SOFTWARE (INDIA) LIMITED 2) EVOKE TECHNOLOGIES 8. OUT OF 10 COMPARABLES THAT WERE EXCLUDED BY THE DRP, THE ASSESSEE AND THE REVENUE SEEK INCLUSION OF R S SOFT WARE INDIA LTD. AND EVOKE TECHNOLOGIES LTD. IN GR.NO.2 OF THE GROUNDS O F APPEAL BY THE REVENUE AND GROUND NO.15 OF THE GROUNDS OF APPEAL B Y THE ASSESSEE IN ITS APPEAL. THE LD. COUNSEL FOR THE ASSESSEE AND THE R EVENUE HAS NO OBJECTION FOR INCLUSION OF THE AFORESAID TWO COMPANIES AND HE NCE GROUND NO.2 RAISED BY THE REVENUE AND GR.NO.15 RAISED BY THE ASSESSEE IN RESPECT OF THE AFORESAID TWO COMPANIES IS ALLOWED. 9. APART FROM THE ABOVE, THE ASSESSEE ALSO EXPRESSE D NO OBJECTION TO MINDTREE LTD. BEING INCLUDED AS A COMPARABLE AND HE NCE GROUND NO.2 RAISED BY THE REVENUE IN SO FAR AS INCLUSION OF MIN DTREE LTD. IS CONCERNED, IS ALLOWED. 10. WITH REGARD TO THE OTHER 7 COMPARABLE COMPANIES , WHOSE EXCLUSION IS CHALLENGED BY THE REVENUE IN GROUND NO.2 OF ITS APPEAL, WE FIND THAT EXCLUSION OF THESE COMPARABLES FROM THE LIST OF COM PANIES SELECTED BY THE TPO HAD COME UP FOR CONSIDERATION BEFORE THE BANGAL ORE ITAT IN THE CASE OF ELECTRONIC FOR IMAGING (I) PVT. LTD. V. DCIT [2017 ] 85 TAXMANN.COM 124 [BANG. TRIB]. ; SYMANTECH SOFTWARE & SERVICES (I) P VT. LTD. V. DCIT, ITA NO.614/MDS/2016; DCIT V. IKANOS COMMUNICATION PVT. LTD. IN ITA 137/BANG/2015; NESS TECHNOLOGIES (I) PVT. LTD. V. D CIT IN ITA NO.696/MUM/2016 WHICH ARE ALSO DECISIONS RENDERED IN RELATION TO A Y 2011-12 IN THE CASE OF A COMPANIES PROVIDING SWD SE RVICES SUCH AS THE ASSESSEE IN THE PRESENT APPEAL. IT IS ALSO RELEVAN T TO POINT OUT THAT THE VERY SAME COMPARABLE COMPANIES CHOSEN BY THE TPO IN THE PRESENT APPEAL IT(TP)A NOS.52 & 97/BANG/2016 PAGE 7 OF 10 HAD BEEN CHOSEN BY THE TPO AS COMPARABLE COMPANIES IN THE CASE OF ELECTRONIC FOR IMAGING (I) PVT. LTD. (SUPRA) . THE TRIBUNAL IN ITS ORDER DATED 14.7.2017 IN THE AFORESAID CASE DEALT WITH THE COMP ARABILITY OF THESE COMPANIES. 11. AS FAR AS ACROPETAL TECHNOLOGIES LTD. IS CONCERNED, VIDE PARA 8 OF THE ORDER OF TRIBUNAL IN ELECTRONICS FOR IMAGING (I) PVT. LTD. (SUPRA), EXCLUSION OF ACROPETAL WAS UPHELD ON THE GROUND THA T THIS COMPANY WAS INTO DEVELOPMENT OF COMPUTER PRODUCTS. THE TRIBUNA L ALSO HELD THAT L&T INFOTECH LTD. HAD RPT AT 18.66% AND SINCE THE RPT W AS BEYOND THE THRESHOLD LIMIT OF 15%, THIS COMPANY WAS DIRECTED T O BE EXCLUDED FROM THE LIST OF COMPARABLE COMPANIES. THE TRIBUNAL FURTHER EXCLUDED TATA ELXSI LTD. FROM THE LIST OF COMPARABLES ON THE GROUND THAT TH IS COMPANY WAS ENGAGED IN DIVERSIFIED ACTIVITIES AND WAS NOT A PUR E SWD SERVICES PROVIDER SUCH AS THE ASSESSEE. IN PARA 9 OF THE AFORESAID ORDER, THE TRIBUNAL HELD E-INFOCHIPS LTD., WAS EARNING REVENUE BOTH FROM THE SOFTWARE SERVICE S AND SOFTWARE PRODUCTS AND THOUGH THE BREAK-UP OF REVENU E FROM THE TWO SEGMENTS WERE AVAILABLE, BUT THE BREAK-UP OF OPERAT ING COST AND NET OPERATING REVENUE AND SEGMENTAL DETAILS WERE NOT AV AILABLE. 12. AS REGARDS E-ZEST SOLUTIONS LTD. , IN THE CASE OF SYMANTECH SOFTWARE & SERVICES (I) PVT. LTD. V. DCIT, ITA NO.6 14/MDS/2016, THIS COMPANY WAS HELD TO BE ENGAGED IN KNOWLEDGE PROCESS OUTSOURCING (KPO) AND CANNOT BE REGARDED AS A SWD SERVICES COMP ANY. 13. THE TRIBUNAL IN THE CASE OF DCIT V. IKANOS COMMUNICATION PVT. LTD. IN ITA 137/BANG/2015 EXCLUDED THE COMPANY, ICRA TECHNO ANALYTICS LTD., ON THE GROUND THAT IT WAS ENGAGED IN ENGINEERING A ND CONSULTING SERVICES, BESIDES LICENSING AND SUB-LICENSING AND N O SEGMENTAL INFORMATION WAS AVAILABLE TO COMPARE THE MARGINS OF SWD SERVICE S SEGMENT. IT(TP)A NOS.52 & 97/BANG/2016 PAGE 8 OF 10 14. THE MUMBAI TRIBUNAL IN THE CASE OF NESS TECHNOLOGIES (I) PVT. LTD. V. DCIT IN ITA NO.696/MUM/2016 HELD INFOSYS LTD. TO BE NOT COMPARABLE FOR THE REASON THAT THIS COMPANY WAS ENGAGED IN MAN UFACTURING OF SOFTWARE PRODUCTS AND WAS A GIANT COMPANY ASSUMING VARIOUS R ISKS. AS FAR AS LARSEN & TOUBRO INFOTECH LTD., IS CONCERNED, VIDE PARAGRAPH-8 PAGE-16 OF THE ORDER IN THE CASE OF ELECTRONICS FOR IMAGING INDIA PVT. LTD., (SUPRA) THIS TRIBUNAL EXCLUDED THIS COMPANY ON THE GROUND O F PRESENCE OF ONSITE REVENUE OF MORE THAN 50% AND THAT THE RELATED PARTY TRANSACTION WAS MORE THAN 15% (18.66%). 15. RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS, WE UPHOLD THE EXCLUSION OF THE AFORESAID 7 COMPANIES FROM THE LIS T OF COMPARABLE COMPANIES AND GROUND NO.2 RAISED BY THE ASSESSEE TO THIS EXTENT IS DISMISSED. WE MAY ADD THAT THE OTHER GROUNDS RAISE D BY THE REVENUE IN ITS APPEAL ARE PURELY SUPPORTIVE OF GROUND NO.2 AND ARE GENERAL GROUNDS WITH NO SPECIFIC REFERENCE TO INSTANCES OF COMPARABLES E XCLUDED AND HENCE DISMISSED. 16. NOW WE SHALL TAKE UP THE APPEAL OF THE ASSESSEE . THE ASSESSEE IN GROUND NO.13 SEEKS EXCLUSION OF 3 COMPANIES VIZ., P ERSISTENT SYSTEMS & SOLUTIONS LTD., SASKEN COMMUNICATION TECHNOLOGIES L TD. AND PERSISTENT SYSTEMS LTD. EXCLUSION OF THESE 3 COMPANIES WAS CO NSIDERED BY THE TRIBUNAL IN THE CASE OF ELECTRONICS FOR IMAGING (I) PVT. LTD. (SUPRA) . IN PARA 8 OF THE ORDER, THIS TRIBUNAL HELD THAT PERSISTENT SYSTEMS & SOLUTIONS LTD. WAS A COMPANY ENGAGED IN SWD SERVICES AND PRODUCTS WITH NO SEGMENTAL DETAILS AND EXCLUDED IT. SIMILARLY, PERSISTENT SYS TEMS LTD. WAS ALSO EXCLUDED ON THE GROUND THAT IT WAS ENGAGED IN DIVER SE ACTIVITIES WITH NO SEGMENTAL BREAK-UP. AS FAR AS SASKEN COMMUNICATION TECHNOLOGIES LTD. IS CONCERNED, THIS TRIBUNAL IN THE CASE OF SYMANTECH SOFTWARE & SERVICES (I) PVT. LTD. (SUPRA) HAS EXCLUDED THIS COMPANY ON THE GROUND OF FUNCTIO NAL IT(TP)A NOS.52 & 97/BANG/2016 PAGE 9 OF 10 DISSIMILARITY VIZ., DEALING WITH MULTIMEDIA PRODUCT S AND R&D ACTIVITIES WITH NO BREAK-UP OF SEGMENTAL INFORMATION. 17. FOLLOWING THE AFORESAID DECISIONS, WE DIRECT EX CLUSION OF THE AFORESAID 3 COMPARABLE COMPANIES. THE TPO IS DIREC TED TO COMPUTE THE ALP OF THE INTERNATIONAL TRANSACTION IN ACCORDANCE WITH THE DIRECTIONS GIVEN ABOVE IN THIS ORDER, AFTER AFFORDING ASSESSEE OPPOR TUNITY OF BEING HEARD. 18. THE ONLY OTHER GROUND THAT REMAINS FOR CONSIDER ATION IN THE ASSESSEES APPEAL ON CORPORATE ISSUE IS GROUND NO.1 7 WHICH READS AS FOLLOWS:- 17. THE LEARNED AO / LEARNED TPO ERRED IN IGNORI NG THE LIMITED RISK NATURE OF THE CONTRACTUAL SERVICES PRO VIDED BY THE APPELLANT AND IN NOT PROVIDING AN APPROPRIATE ADJUS TMENT TOWARDS THE RISK DIFFERENTIAL, EVEN WHEN FULL-FLEDGED ENTRE PRENEURIAL COMPANIES ARE SELECTED AS COMPARABLE COMPANIES. 19. WE ARE OF THE VIEW THAT THE GRIEVANCE PROJECTED BY THE ASSESSEE IN THE ABOVE GROUND OF APPEAL REQUIRES VERIFICATION BY THE AO. THEREFORE THE AO IS DIRECTED TO VERIFY THE CLAIM OF THE ASSESSEE AS PROJECTED IN GROUND NO.17 AND GIVE CORRECT CREDIT FOR ADVANCE TAXES PAI D. 20. IN THE RESULT, BOTH THE APPEALS BY THE REVENUE AND THE ASSESSEE ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 05 TH DAY OF AUGUST, 2020. SD/- SD/- ( B R BASKARAN ) ( N V VASUDEVAN ) ACCOUNTANT MEMBER VICE PRESIDENT BANGALORE, DATED, THE 05 TH AUGUST, 2020. / DESAI S MURTHY / IT(TP)A NOS.52 & 97/BANG/2016 PAGE 10 OF 10 COPY TO: 1. THE REVENUE 2. THE ASSESSEE 3. CIT 4. CIT(A ) 5. DR, ITAT, BANGALORE. BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE.