Kumaran Systems Pvt. Ltd., Kancheepuram V. DCIT Corporate Circle 4(2), CHENNAI

ITTPA 95/CHNY/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8545 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 7 month(s) 19 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 09-08-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 19-04-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 21-12-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: G SRINIVASA RAO
• Assessee Lawyers: K R VASUDEVAN
• Keywords: Transfer pricing; International transaction; Corroborative evidences; Capital expenditure; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , . , BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ IT(P)A NO.:95/CHNY/2018 / ASSESSMENT YEAR: 2014-15 M/S. KUMARAN SYSTEMS PVT. LTD., PLOT NO.28/A-41, III MAIN ROAD, 6 TH CROSS, SIPCOT IT PARK, SIRUSERI, KANCHIPURAM 603 103. PAN: AABCK 3992P V. THE D CIT, CENTRAL CIRCLE 4(2), CHENNAI 34. ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI K.R. VASUDEVAN, ADVOCATE /RESPONDENT BY : SHRI G. SRINIVASA RAO, CIT /DATE OF HEARING : 05.07.2021 /DATE OF PRONOUNCEMENT : 09.08.2021 / O R D E R PER G MANJUNATHA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE FINAL ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S.143(3) R.W.S. 144C(13) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) DATED 11.10.2018, IN TURN WHICH HAS ARISEN OUT OF DIRECTIONS OF THE DISPUTE RESOLUTION PANEL (DRP)-2, BENGALURU ISSUED U/S.144C(5) OF THE ACT DATED 03.09.2018 AND PERTAINS TO ASSESSMENT 2014-15. 2 I.T.(TP) A. NO.95/CHNY/2018 2. THE ASSESSEE ALTHOUGH HAS RAISED VARIOUS GROUNDS CHALLENGING TP ADJUSTMENT COMPUTED BY THE AO BUT, RESTRICTED ITS ARGUMENTS IN RESPECT OF GROUND NO.3 ON UPPER TURNOVER FILTER NOT CONSIDERED BY THE TPO AND ERRONEOUS EXCLUSION OF CERTAIN COMPARABLES SELECTED BY THE ASSESSEE. THEREFORE, WE PROCEED TO DECIDE THE ISSUE WITHOUT REPRODUCING LENGTHY GROUNDS TAKEN BY THE ASSESSEE ON THE ISSUE OF APPLICATION OF TURNOVER FILTER AS TAKEN BY THE ASSESSEE THROUGH ITS GROUND NO.3 OF GROUNDS OF APPEAL. 3. THE BRIEF FACTS OF THE CASE ARE THAT M/S. KUMARAN SYSTEMS PVT. LTD., IS A GLOBAL IT SOLUTIONS PROVIDER, OFFERING MULTIPLE SERVICES RANGING FROM APPLICATION DEVELOPMENT AND MAINTENANCE, APPLICATION TESTING AND OUTSOURCED SOFTWARE DEVELOPMENT. IT SERVES CLIENTS IN THE BANKING, EDUCATION, HEALTHCARE, INSURANCE, RETAIL, SHIPPING AND TELECOM VERTICALS GLOBALLY THROUGH ITS MARKETING SUBSIDIARY M/S. KUMARAN SYSTEMS, USA AND M/S. KUMARAN SYSTEMS, CANADA. THE ASSESSEE HAS ENTERED INTO FOLLOWING INTERNATIONAL TRANSACTIONS WITH ITS AES. SL.NO. NATURE OF TRANSACTION NAME OF THE AE AMOUNT (IN INR) METHOD ADOPTED 1 PROVISION OF SOFTWARE DEVELOPMENT SERVICES KUMARAN USA 21,05,78,399 TNMM KUMARAN CANADA 12,19,02,733 TNMM TOTAL 33,24,81,132 3 I.T.(TP) A. NO.95/CHNY/2018 THE ASSESSEE HAS BENCHMARKED ITS INTERNATIONAL TRANSACTIONS WITH AES BY ADOPTING TNMM AS MOST APPROPRIATE METHOD. THE ASSESSEE HAS SELECTED SIX COMPARABLES WITH AN ARITHMETIC MEAN MARGIN OF 5.4% AND THEN COMPARED TO ITS MARGIN AT 5.39% AND CLAIMED THAT ITS TRANSACTIONS WITH AES ARE AT ARMS LENGTH PRICE (ALP). DURING TRANSFER PRICING PROCEEDINGS, THE TPO HAS ACCEPTED MARGIN COMPUTED BY THE ASSESSEE, HOWEVER, REJECTED COMPARABLES SELECTED BY THE ASSESSEE AND INCLUDED FRESH COMPARABLES AND DETERMINED ARITHMETIC MEAN MARGIN AT 21.32% AND THEN COMPARED WITH ASSESSEES MARGIN AND THUS, SUGGESTED TP ADJUSTMENT OF RS.5,02,20,993/-. 4. PURSUANT TO TRANSFER PRICING ADJUSTMENT, AS SUGGESTED BY THE TPO, THE AO HAS PASSED DRAFT ASSESSMENT ORDER U/S.143(3) R.W.S. 144C(1) OF THE ACT ON 22.12.2017 AND MADE TP ADJUSTMENT OF RS.5,02,20,993/- TO INTERNATIONAL TRANSACTIONS OF THE ASSESSEE WITH ITS AES. THE AO HAS MADE FURTHER DISALLOWANCES OF SUM OF RS.15,62,000/- TOWARDS REPAIR AND MAINTENANCE EXPENSES ON THE GROUND THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE EXPENSES WITH SUPPORTING EVIDENCES. SIMILARLY, THE AO HAS DISALLOWED A SUM OF RS.18,67,696/- TOWARDS CREDIT CARD EXPENSES ON THE GROUND THAT NO SUPPORTING EVIDENCES HAS BEEN FURNISHED TO PROVE THE NEXUS 4 I.T.(TP) A. NO.95/CHNY/2018 BETWEEN EXPENSES INCURRED THROUGH CREDIT CARD AND BUSINESS OF THE ASSESSEE. 5. AGAINST THE DRAFT ASSESSMENT ORDER, THE ASSESSEE HAS FILED ITS OBJECTIONS BEFORE THE LD.DRP AND CHALLENGED TP ADJUSTMENT PROPOSED BY THE AO IN RESPECT OF INTERNATIONAL TRANSACTIONS OF THE ASSESSEE WITH ITS AES ON THE GROUND THAT THE AO HAS NOT APPLIED TURNOVER FILTER TO EXCLUDE HIGH TURNOVER COMPANIES FROM THE LIST OF COMPARABLES. THE ASSESSEE HAS ALSO CHALLENGED DISALLOWANCE OF CREDIT CARD EXPENSES AND REPAIRS & MAINTENANCE EXPENSES ON THE GROUND THAT CREDIT CARD EXPENSES HAS BEEN INCURRED BY THE DIRECTORS OF THE COMPANY FOR THE PURPOSE OF MEETING OUT BUSINESS OBLIGATIONS AND FURTHER REPAIRS AND MAINTENANCE EXPENSES ARE IN THE NATURE OF CURRENT REPAIRS FOR REPLACEMENT OF A/C DUCT, PROJECTOR AND INTERIOR WORKS. THE LD.DRP VIDE ITS ORDER DATED 03.09.2018 HAS REJECTED OBJECTIONS FILED BY THE ASSESSEE, CHALLENGING TP ADJUSTMENT MADE BY THE AO AND FOR ADOPTION OF TURNOVER FILTER BY HOLDING THAT WHEN THE ASSESSEE HAS NOT MADE OUT A CASE AS HOW THE HIGH AND LOW TURNOVER HAS INFLUENCED OPERATING MARGIN AND ON THE CONTRARY, THERE IS NO DIRECT RELATION BETWEEN TURNOVER AND THUS COMPARABLES CANNOT BE REJECTED SOLELY ON THE BASIS OF HIGH TURNOVER. THE DRP FURTHER NOTED THAT LARGER TURNOVER AND SIZE OF THE ENTITY MAY HAVE AN IMPACT OF 5 I.T.(TP) A. NO.95/CHNY/2018 ECONOMICAL COST OF PRODUCTION IN THE MANUFACTURING INDUSTRY DUE TO HUGE COST OF FIXED ASSET BUT NOT IN SERVICE SECTOR AND HENCE, REJECTED OBJECTIONS FILED BY THE ASSESSEE. THE DRP HAS ALSO REJECTED OBJECTIONS FILED BY THE ASSESSEE REGARDING DISALLOWANCE OF CREDIT CARD EXPENSES ON THE GROUND THAT IN THE ABSENCE OF BIFURCATION OF EXPENSES INCURRED THROUGH CREDIT CARD AS PERSONAL IN NATURE AND FOR BUSINESS PURPOSES, THE AO HAS DISALLOWED A SUM OF RS.18,67,696/- OUT OF TOTAL SUM OF RS.38,50,101/- WHICH IS HIGHLY REASONABLE. SIMILARLY, THE DRP HAS REJECTED OBJECTION FILED BY THE ASSESSEE TOWARDS DISALLOWANCE OF REPAIRS & MAINTENANCE ON THE GROUND THAT THE ASSESSEE HAS INCURRED VARIOUS EXPENDITURE FOR RENOVATION OF PREMISES WHICH ARE IN THE NATURE OF CAPITAL EXPENDITURE WHICH GIVES ENDURING BENEFIT TO THE ASSESSEE. AGGRIEVED BY THE DRP DIRECTION, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERATION IS TP ADJUSTMENT MADE BY THE AO TO INTERNATIONAL TRANSACTIONS OF THE ASSESSEE WITH ITS AES BY RE-CHARACTERIZATION OF TP STUDY AND INCLUSION OF CERTAIN NEW COMPARABLES. THE LD.AR FOR THE ASSESSEE AT THE TIME OF HEARING SUBMITTED THAT ALTHOUGH THE ASSESSEE HAS TAKEN VARIOUS GROUNDS CHALLENGING ERRONEOUS REJECTION OF TRANSFER PRICING STUDY OF THE ASSESSEE AND CONDUCTING NEW SUCH PROCESS AND ALSO 6 I.T.(TP) A. NO.95/CHNY/2018 INCLUSION OF NEW COMPARABLES, BUT RESTRICTED ITS ARGUMENTS ONLY ON GROUND NO.3, WHICH AGITATES NOT APPLYING UPPER TURNOVER FILTER FOR SELECTION OF COMPARABLES, ON THE PLEADING THAT, IF ASSESSEES CLAIM IS ACCEPTED THEN GROUNDS TAKEN BY THE ASSESSEE CHALLENGING INCLUSION OF NEW COMPARABLES BECOME INFRUCTUOUS, BECAUSE THE ASSESSEE MARGIN FALLS WITHIN THE RANGE AND HENCE, ADDITIONS MADE BY THE AO WOULD BECOME NIL. HE, FURTHER SUBMITTED THAT THE ISSUE OF APPLICATION OF TURNOVER FILTERS IS COVERED BY THE DECISION OF THE HONBLE JURISDICTIONAL MADRAS HIGH COURT IN THE CASE OF CIT VS. M/S. VISUAL GRAPHICS INDIA COMPUTING SERVICES INDIA PVT. LTD., (2021) 318 CTR 586, WHERE THE HONBLE HIGH COURT HELD THAT THE APPELLATE TRIBUNAL HAS RIGHTLY REJECTED THE COMPARABLE BASED ON TURNOVER FILTER CRITERIA. THE LD.AR FURTHER SUBMITTED THAT DUN AND BRADSTREETS ANALYSIS CLASSIFIED THE SOFTWARE COMPANIES INTO THREE CATEGORIES BASED ON SIZE, AS PER WHICH, SMALL SIZE FIRMS ARE CATEGORIZED BASED ON THE TURNOVER OF RS.2,000 MINIMUM UPTO RS.200 CRORE. ADMITTEDLY, TURNOVER OF THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR IS RS.33.24 CRORES, WHEREAS THE AO HAS INCLUDED 4 NEW COMPARABLES WHOSE TURNOVER IS ABOVE RS.200 CRORES. THEREFORE, THOSE COMPANIES WILL GO IF TURNOVER FILTER IS APPLIED FOR SELECTION OF COMPARABLES. IN THIS REGARD, HE HAS RELIED UPON THE DECISION OF THE ITAT, BANGALORE IN THE CASE OF M/S.AUTODESK (I) P. LTD., VS. DCIT, 7 I.T.(TP) A. NO.95/CHNY/2018 [2018] 96 TAXMANN.COM 263 AND ARGUED THAT THERE ARE DIVERGENT VIEWS ON THE ISSUE OF APPLICATION OF TURNOVER FILTER BUT, THE BANGALORE BENCH OF THE TRIBUNAL IN THE LATEST JUDGMENT HAD CONSIDERED ALL PREVIOUS JUDGMENTS AND HELD THAT HIGH TURNOVER COMPANIES CANNOT BE COMPARED WITH LOW TURNOVER COMPANIES AND HENCE, THE AO HAS TO APPLY TURNOVER FILTER BASED ON DUN AND BRADSTREETS ANALYSIS FOR SELECTION OF COMPARABLES. IF TURNOVER FILTER IS APPLIED, THEN 4 NEW COMPANIES SELECTED BY THE AO WILL GO OUT OF THE LIST OF COMPARABLES AND THUS, THE MARGIN OF THE ASSESSEE IS WITHIN THE RANGE OF COMPARABLES SELECTED BY THE AO AND CONSEQUENTLY ADDITION MADE TOWARDS TP ADJUSTMENT WOULD ALSO GOES. 7. THE LD.DR ON THE OTHER HAND STRONGLY SUPPORTING ORDER OF THE LD.DRP MORE PARTICULARLY PARA 3.1 & 3.2 SUBMITTED THAT WHERE THE ASSESSEE HAS NOT MADE OUT A CASE AS HOW THE HIGH OR LOW TURNOVER HAS INFLUENCED OPERATING MARGIN, THEN A COMPARABLE CANNOT BE REJECTED SOLELY ON THE BASIS OF HIGH TURNOVER. THEREFORE, THERE IS NO MERIT IN ARGUMENTS TAKEN BY THE LD.AR FOR THE ASSESSEE FOR APPLICATION OF TURNOVER FILTER TO EXCLUDE NEW COMPARABLES SELECTED BY THE TPO, WHEN FAR ANALYSIS SHOWS THAT THE COMPANIES ARE CARRYING OUT SIMILAR FUNCTIONS AS OF THE ASSESSEE. 8 I.T.(TP) A. NO.95/CHNY/2018 8. WE HAVE HEARD BOTH THE SIDES, PERUSED MATERIALS AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. IT IS A WELL SETTLED PRINCIPLE OF LAW BY VARIOUS DECISIONS OF COURTS AND TRIBUNAL THAT UPPER TURNOVER FILTER OF RS.200 CRORES HAS TO BE ADOPTED, WHILE SELECTING THE COMPARABLE SET OF COMPANIES, FOR THE PURPOSE OF BENCHMARKING UNDER TNMM METHOD. FURTHER, DUN AND BRADSTREETS ANALYSIS HAS CLASSIFIED SOFTWARE COMPANIES INTO 3 CATEGORIES BASED ON THEIR TURNOVER, AS PER WHICH, SMALL SIZE FIRMS ARE CLASSIFIED ON THE BASIS OF TURNOVER OF RS.2,000 AND UPTO RS.200 CRORES, MEDIUM SIZE FIRMS HAS BEEN CLASSIFIED BETWEEN RS.200 TO RS.2000 CRORES AND LARGE SIZE FIRMS HAS BEEN CLASSIFIED BASED ON TURNOVER OF ABOVE RS.2000 CRORES. THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. VISUAL GRAPHICS COMPUTING SERVICES INDIA PVT. LTD., SUPRA , HELD THAT THE APPELLATE TRIBUNAL HAS RIGHTLY REJECTED COMPARABLES BASED ON TURNOVER FILTER CRITERIA. THE HONBLE HIGH COURT WHILE DEALING WITH THE ISSUE, HAS CONSIDERED THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. M/S.PENTAIR WATER INDIA PVT. LTD., [2016] 381 ITR 216, WHEREIN IT WAS STATED THAT A GIANT COMPANY IN THE AREA OF DEVELOPMENT OF SOFTWARE CANNOT BE COMPARED WITH ASSESSEE, WHICH IS HAVING A SMALL TURNOVER. ALTHOUGH, THE LD.DRP HAS RELIED UPON THE DECISION OF ITAT, BANGALORE IN THE CASE OF M/S. GENISYS INTEGRATING SYSTEMS (INDIA) P. LTD., VS. DCIT, [2012] 53 9 I.T.(TP) A. NO.95/CHNY/2018 SOT 159, BUT FACT REMAINS THAT IN THE LATEST DECISION, THE ITAT, BANGALORE BENCH IN THE CASE OF M/S. AUTODESK (I) P. LTD., VS. DCIT, SUPRA, HAS CONSIDERED SIMILAR ISSUE AND AFTER ANALYZING VARIOUS JUDGMENTS OF DIFFERENT HIGH COURTS AND TRIBUNALS HELD THAT TURNOVER FILTER IS A GOOD CRITERIA TO EXCLUDE COMPARABLES AND HENCE, AS PER THE SETTLED PRINCIPLES, A HIGH TURNOVER COMPANY CANNOT BE COMPARED WITH A SMALL TURNOVER COMPANY. THIS BEING THE CASE, THE ASSESSEE WHICH IS HAVING A SMALL TURNOVER AND ALSO CATERING TO THE NEEDS OF ITS AES CANNOT BE COMPARED WITH GIANT COMPANIES LIKE MINDTREE LTD., PERSISTENT SYSTEMS LTD., R S SOFTWARE (INDIA) LTD., ETC., WHICH ARE HAVING HUGE TURNOVER. FURTHER, THE ASSET BASE INCLUDING TANGIBLES AND INTANGIBLES, THEIR BRAND VALUE AND AREA OF OPERATION WOULD DEFINITELY HAVE A BEARING ON THE OPERATING MARGIN OF THE COMPANY BECAUSE, THEY IN GENERAL, PROVIDE SERVICES TO VARIOUS CLIENTS ACROSS THE GLOBE, WHEREAS THE ASSESSEE COMPANY LIMITED ITS SERVICES TO ITS AES. IN THIS CASE, ADMITTEDLY, THE ASSESSEE HAS A TURNOVER OF RS.33.24 CRORES, WHEREAS THE TPO HAS INCLUDED 4 COMPARABLES WHOSE TURNOVER RANGES FROM RS.207 CRORES TO RS.3,032 CRORES, WHICH IS ALMOST MORE THAN 6 TIMES TO 91 TIMES OF THE TURNOVER OF THE ASSESSEE AND HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE TPO AS WELL AS THE LD.DRP HAS ERRED IN NOT APPLYING TURNOVER FILTER FOR SELECTION OF COMPARABLES AND HENCE, WE DIRECT THE TPO TO APPLY 10 I.T.(TP) A. NO.95/CHNY/2018 TURNOVER FILTER OF 0 TO 200 CRORES FOR SELECTION OF COMPARABLES AND RECOMPUTE MARGIN OF THE ASSESSEE. IN CASE, THE TPO FINDS THAT AFTER APPLICATION OF TURNOVER FILTER, OPERATING MARGIN OF THE ASSESSEE IS WITHIN ADMISSIBLE RANGE THEN, WE DIRECT THE TPO TO DELETE ADDITION MADE TOWARDS TP ADJUSTMENT. 9. SINCE, THE LD.AR FOR THE ASSESSEE HAS MADE A STATEMENT AT BAR THAT IF TURNOVER FILTER IS APPLIED THEN COMPARABLES SELECTED BY THE TPO WOULD AUTOMATICALLY GOES AND CONSEQUENTLY HE DOES NOT WANT TO PRESS GROUNDS CHALLENGING EXCLUSION OF COMPARABLES AND HENCE, THE OTHER GROUNDS TAKEN BY THE ASSESSEE CHALLENGING ERRONEOUS REJECTION OF TRANSFER PRICING STUDY AND EXCLUSION OF COMPARABLES HAVE BEEN DISMISSED AS NOT-PRESSED. 10. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATION FROM GROUND NO.7 OF ASSESSEE APPEAL IS DISALLOWANCE OF CREDIT CARD EXPENSES AMOUNTING TO RS.18,67,696/-. THE LD.AR FOR THE ASSESSEE AT THE TIME OF HEARING SUBMITTED THAT HE DOES NOT WANT TO PRESS THE GROUND AND HENCE, GROUND NO.7 OF THE ASSESSEE IS DISMISSED AS NOT- PRESSED. 11 I.T.(TP) A. NO.95/CHNY/2018 11. THE NEXT ISSUE THAT CAME UP FOR OUR CONSIDERATION FROM GROUND NO.8 OF ASSESSEE APPEAL IS DISALLOWANCE OF REPAIRS & MAINTENANCE EXPENSES AND TREATED AS CAPITAL IN NATURE AMOUNTING TO RS.15,62,000/-. THE ASSESSEE CLAIMS THAT IT HAD INCURRED REPAIRS & MAINTENANCE EXPENSES OF RS.15,62,000/- WHICH IS IN THE NATURE OF CURRENT REPAIRS, FOR REPLACEMENT OF A/C DUCT, REPLACEMENT OF PROJECTOR, INTERIOR WORK, FALSE CEILING REFIXING, WORKSTATION EXTENSION, CARPET LAYING & REFIXING OF DAMAGED WORK STATION, PAVER BLOCK REMODELING CHARGES WHICH ARE REVENUE IN NATURE AND DOES NOT GIVE ANY ENDURING BENEFIT TO THE ASSESSEE. THE AO HAS DISALLOWED REPAIRS & MAINTENANCE EXPENSES CLAIMED BY THE ASSESSEE ON THE GROUND THAT THE EXPENSES ARE IN THE NATURE OF CAPITAL EXPENDITURE WHICH GIVES ENDURING BENEFIT TO THE ASSESSEE. FURTHER, IT WAS THE FINDING OF THE LD.AO THAT THE ASSESSEE COULD NOT FURNISH NECESSARY SUPPORTING EVIDENCES TO PROVE ITS CLAIM THAT THE EXPENSES ARE REVENUE IN NATURE. 12. HAVING HEARD BOTH THE SIDES AND CONSIDERED MATERIALS ON RECORD, WE FIND THAT IT WAS THE CLAIM OF THE ASSESSEE BEFORE THE AO AND LD.DRP THAT REPAIRS & MAINTENANCE EXPENSES INCURRED IS IN THE NATURE OF CURRENT REPAIRS FOR REPLACEMENT OF DAMAGED TEMPORARY ASSETS, WHICH DOES NOT GIVE ANY ENDURING BENEFIT TO THE ASSESSEE. 12 I.T.(TP) A. NO.95/CHNY/2018 WHEREAS THE FINDINGS OF THE AO AS WELL AS THE LD.DRP ARE THAT EXPENSES ARE IN THE NATURE OF CAPITAL EXPENDITURE WHICH GIVES ENDURING BENEFIT TO THE ASSESSEE. FACTS ARE NOT CLEAR. FURTHER, THE ASSESSEE HAS NOT BEEN ABLE TO FILE ANY EVIDENCES TO JUSTIFY ITS CLAIM. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE ISSUE NEEDS TO GO BACK TO FILE OF THE AO TO GIVE ANOTHER OPPORTUNITY TO THE ASSESSEE TO JUSTIFY ITS CASE. HENCE, WE SET ASIDE THE ISSUE TO FILE OF THE AO AND DIRECT HIM TO RECONSIDER THE ISSUE IN LIGHT OF VARIOUS AVERMENTS MADE BY THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT ON 9 TH AUGUST, 2021 AT CHENNAI . SD/- SD/- ( ) (MAHAVIR SINGH) /VICE PRESIDENT ( . ) (G. MANJUNATHA) /ACCOUNTANT MEMBER /CHENNAI, /DATED, THE 9 TH AUGUST, 2021 RSR 1. /APPELLANT 2. /RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. /GF.