M/s Bearing Point Business Consulting p Ltd, Bangalore V. Deputy commssioner of incomet ax, circle-11(2), Bangalore

MA 40/BANG/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 2488 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 18-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: FARHAT HUSSAIN QURESHI CITIIDR
• Assessee Lawyers: PADAM KHINCHA
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P. BOAZ , ACCOUNTANT MEMBER M.P. NO.40/BANG/2014 [IN IT(TP)A NO.1380/BANG/2012] ASSESSMENT YEAR : 2008-09 M/S. BEARINGPOINT PROPERTY SERVICES PRIVATE LIMITED (FORMERLY KNOWN AS BEARING POINT BUSINESS CONSULTING PRIVATE LTD.), SECOND FLOOR, EMBASSY ICON ANNEX, NO.2/1, INFANTRY ROAD, BANGALORE 560 001. PAN : AACCB9758R VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 11(2), BANGALORE. APPLICANT RESPONDENT APPLICANT BY : SHRI PADAM KHINCHA, C.A. RESPONDENT BY : SHRI FARHAT HUSSAIN QURESHI, CIT-II(DR) DATE OF HEARING : 21.11.2014 DATE OF PRONOUNCEMENT : 28.11.2014 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS MISCELLANEOUS PETITION IS FILED BY THE ASS ESSEE PRAYING FOR RECTIFICATION OF CERTAIN ERRORS IN THE ORDER OF TRI BUNAL DATED 21.8.2014 PASSED IN THE AFORESAID APPEAL. M.P. NO.40/BANG/2014 [IN IT(TP)A 1380/BANG/2012] PAGE 2 OF 13 2. IN THE PETITION, THE ASSESSEE HAS CONTENDED THAT IN GROUND NOS. B- 10 & B-11 OF THE APPEAL WHICH ARE GROUNDS WITH RESP ECT TO THE ADDITION MADE CONSEQUENT TO DETERMINATION OF ALP OF AN INTER NATIONAL TRANSACTION BY THE ASSESSEE WITH THE AE, IT CHALLENGED THE ACTION OF THE REVENUE AUTHORITIES IN SELECTING INAPPROPRIATE COMPARABLE C OMPANIES AND INAPPROPRIATELY COMPUTING THE OPERATING MARGINS OF THE COMPARABLES AS WELL AS THAT OF ASSESSEE. IT IS FURTHER CONTENDED THAT THE TRIBUNAL DID NOT DEAL WITH AND CONSIDER THE SUBMISSION OF THE ASSESS EE TO REJECT E-ZEST SOLUTIONS LTD., A COMPARABLE CHOSEN BY THE TPO. IN THIS REGARD, OUR ATTENTION WAS DRAWN TO THE FACT THAT IN THE COURSE OF HEARING, ASSESSEE FILED A CHART OF COMPARABLES CHOSEN BY TPO/DRP AND THE RE ASON WHY THE SAME SHOULD BE REJECTED. OUR ATTENTION WAS DRAWN TO PAG E 3 OF THE SUBMISSIONS FILED BY THE ASSESSEE BEFORE THE TRIBUNAL ON 7.8.20 14, WHEREIN IN THE NOTES BELOW THE CHART, THE ASSESSEE HAS POINTED OUT THAT E-ZEST SOLUTIONS LTD. HAS TO BE REJECTED AS FUNCTIONALLY DIFFERENT IN VIE W OF THE DECISION OF BANGALORE TRIBUNAL IN THE CASE OF M/S. 3DPLM SOFTWARE SOLUTIONS LTD. V. DCIT, IT(TP)A NO.1303/BANG/2012 FOR A.Y. 20 08-09 . 3. THE LD. COUNSEL FOR THE ASSESSEE FURTHER CONTEND ED THAT IN SUPPORT OF GROUND NO.B-11 VIZ., GROUND CHALLENGING INAPPROP RIATE COMPUTATION OF OPERATING MARGINS OF ASSESSEE AND COMPARABLES, SUBM ISSIONS WERE MADE THAT FOREIGN EXCHANGE GAIN/LOSS SHOULD BE CONSIDERE D AS PART OF OPERATING PROFITS WHILE COMPUTING MARGINS OF ASSESSEE AS WELL AS COMPARABLES. IT WAS POINTED OUT THAT NO SPECIFIC ADJUDICATION HAS B EEN GIVEN BY THE TRIBUNAL IN ITS ORDER. M.P. NO.40/BANG/2014 [IN IT(TP)A 1380/BANG/2012] PAGE 3 OF 13 4. IT IS FURTHER CONTENDED IN THE MISCELLANEOUS PET ITION THAT NON- ADJUDICATION OF A GROUND RAISED BY THE ASSESSEE BEF ORE THE TRIBUNAL WILL GIVE RISE TO A MISTAKE APPARENT ON FACE OF THE RECO RD. RELIANCE IN THIS REGARD HAS BEEN PLACED ON THE HONBLE ALLAHABAD HIG H COURT DECISION IN THE CASE OF CIT V. K.M. SUGAR MILLS PVT. LTD. , 275 ITR 247 (ALL) AND THE DECISIONS OF ITAT V. DCIT, 218 ITR 275 (SC) AND RAHUL KUMAR BAJAJ V. ITO, 69 ITD 1 (NAG)(TRIB)(SB) . THE ASSESSEE HAS THEREFORE PRAYED IN THE PETITION TO PASS AN ORDER OF RECTIFICATION REJE CTING E-ZEST SOLUTIONS LTD. AS A COMPARABLE AND CONSIDERING FOREIGN EXCHANGE GA IN/LOSS AS OPERATING IN NATURE. 5. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE STAND OF THE ASSESSEE AS REFLECTED IN THE MISCELLANEOUS PETITION . FURTHER RELIANCE WAS ALSO PLACED BY HIM ON THE DECISION OF TRIBUNAL IN T HE CASE OF SAP LABS (I) PVT. LTD ., 44 SOT 156 (BANGALORE) , WHEREIN IT WAS HELD THAT FOREIGN EXCHANGE GAIN/LOSS HAS TO BE CONSIDERED AS PART OF OPERATING PROFITS. 6. THE LD. DR, ON THE OTHER HAND, SUBMITTED THAT FO REIGN EXCHANGE GAIN SHOULD NOT BE CONSIDERED AS PART OF OPERATING PROFITS, AS IT IS NOT RELATED WITH RENDERING OF SOFTWARE DEVELOPMENT SERV ICES. WITH REGARD TO EXCLUDING E-ZEST SOLUTIONS LTD. AS A COMPARABLE, LD . DR SUBMITTED THAT IN SEVERAL DECISIONS, SOFTWARE DEVELOPMENT SERVICE PRO VIDERS DID NOT OBJECT TO THIS COMPANY BEING CHOSEN AS A COMPARABLE. IT WAS ALSO HIS SUBMISSION THAT DECISION OF THE TRIBUNAL RENDERED IN THE CASE OF 3DPLM SOFTWARE SOLUTIONS LTD. (SUPRA) REFERRED TO BY THE LD. COUNSEL FOR ASSESSEE IS WIT H M.P. NO.40/BANG/2014 [IN IT(TP)A 1380/BANG/2012] PAGE 4 OF 13 REFERENCE TO A.Y. 2007-08 AND THEREFORE ONE HAS TO TEST AS TO WHETHER FOR A.Y. 2008-09 WHICH IS THE ASSESSMENT YEAR INVOLVED IN THE PRESENT APPEAL, FACTS WOULD BE SIMILAR TO JUSTIFY EXCLUSION OF E-ZE ST SOLUTIONS LTD. FROM THE LIST OF COMPARABLES. APART FROM THE ABOVE, LD. DR ALSO SUBMITTED THAT MISTAKES POINTED OUT IN THE MISCELLANEOUS PETITION CANNOT BE SAID TO BE MISTAKES APPARENT ON THE FACE OF RECORD, CALLING FO R ANY INTERFERENCE BY THE TRIBUNAL U/S. 254(2) OF THE ACT. 7. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIV AL SUBMISSIONS. IN OUR VIEW, THE MATERIAL PLACED BEFORE THE TRIBUNAL A T THE TIME OF HEARING OF APPEAL CLEARLY SUGGESTS THAT ASSESSEE HAD OBJECTED TO INCLUDING E-ZEST SOLUTIONS LTD. AS A COMPARABLE AND THAT SUBMISSION HAS NOT BEEN CONSIDERED BY THE TRIBUNAL IN ITS ORDER. THEREFORE , THERE IS AN APPARENT MISTAKE IN THE ORDER OF TRIBUNAL, INASMUCH AS THE C ONTENTION PUT FORTH BY THE ASSESSEE SUPPORTED BY JUDICIAL DECISIONS HAD NO T BEEN CONSIDERED BY THE TRIBUNAL. 8. WITH REGARD TO NON-CONSIDERATION OF FOREIGN EXCH ANGE GAIN/LOSS AS PART OF OPERATING PROFITS OF THE ASSESSEE AS WELL A S THE COMPARABLES, IT IS SEEN THAT IN A CHART FILED BEFORE THE TRIBUNAL, GIV ING WORKINGS OF OPERATING MARGIN OF THE ASSESSEE, FOREIGN EXCHANGE GAIN HAS B EEN ADDED AS PART OF OPERATING PROFITS. IT IS THUS CLEAR THAT ASSESSEE HAD TAKEN A STAND BEFORE THE TRIBUNAL THAT FOREIGN EXCHANGE GAIN/LOSS HAD TO BE TREATED AS PART OF OPERATING PROFITS WHILE ARRIVING AT THE OPERATING M ARGIN OF THE ASSESSEE AS WELL AS OF THE COMPARABLE. THEREFORE, THERE IS AN APPARENT ERROR IN THE ORDER OF THE TRIBUNAL EVEN IN THIS REGARD. WE, THE REFORE, ACCEPT THE M.P. NO.40/BANG/2014 [IN IT(TP)A 1380/BANG/2012] PAGE 5 OF 13 MISCELLANEOUS PETITION AND RECTIFY THE ORDER OF TRI BUNAL DATED 21.8.2014 IN THE FOLLOWING MANNER. 9. AFTER PARA 6 OF THE ORIGINAL ORDER OF TRIBUNAL, PARA 6A TO 6D BE INSERTED , WHICH READ AS FOLLOWS:- 6-A. THE FIRST ASPECT BROUGHT TO OUR NOTICE BY T HE LEARNED COUNSEL FOR THE ASSESSEE WAS THE INAPPROPRI ATE COMPUTATION OF OPERATING MARGINS OF THE ASSESSEE. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE TPO ERRED IN NOT TREATING THE FOREIGN EXCHANGE FLUCTUAT ION AS PART OF THE OPERATING PROFITS AND ADDING THE SAME TO THE INCOME FROM SOFTWARE DEVELOPMENT SERVICES. THE LEARNED CO UNSEL FOR THE ASSESSEE SPECIFICALLY BROUGHT TO OUR NOTICE THAT THE TPO WHILE COMPUTING THE OPERATING MARGIN, HAS NOT I NCLUDED THE INCOME FROM FOREIGN EXCHANGE FLUCTUATION. OUR ATTENTION WAS DRAWN TO GROUND NO. B-11 OF THE GROUNDS OF APPE AL OF THE ASSESSEE, WHEREIN THE ASSESSEE HAS CHALLENGED T HE ACTION OF THE REVENUE AUTHORITIES IN INAPPROPRIATELY COMPU TING THE OPERATING MARGINS OF THE COMPARABLES AND THE ASSESS EE. 6-B. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTE D THAT THE ITAT BANGALORE BENCH IN THE CASE OF TRILOGY E-BUSINESS SOFTWARE INDIA PRIVATE LTD. IN ITA NO.1054/BANG/2011 , HAS M.P. NO.40/BANG/2014 [IN IT(TP)A 1380/BANG/2012] PAGE 6 OF 13 HELD THAT FOREIGN EXCHANGE GAIN/LOSS HAS TO BE CONS IDERED AS OPERATING IN NATURE. THE TRIBUNAL FOLLOWED THE DEC ISION RENDERED BY THE BANGALORE BENCH IN THE CASE OF SAP LABS INDIA PVT. LTD. V. ACIT, [2011] 44 SOT 156 (BANG). THE ASSESSEE BROUGHT TO OUR NOTICE COMPUTATION OF OPERA TING MARGIN OF THE ASSESSEE INCLUSIVE OF FOREIGN EXCHANG E GAIN. THE SAME IS GIVEN AS ANNEXURE-III TO THE ORDER PASS ED BY THE TRIBUNAL OF THE DRP THAT IF THE FOREIGN EXCHANGE FL UCTUATION IS CONSIDERED AS INCOME FROM OPERATIONS, THEN THE O PERATING MARGINS OF THE ASSESSEE WOULD BE AS GIVEN IN CHART GIVEN AS ANNEXURE-III TO THIS ORDER. 6-C. THE LD. DR PLACED RELIANCE ON THE ORDER OF THE DRP ON THIS ISSUE. 6-D. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. I T CAN BE SEEN FROM THE CHART GIVEN AS ANNEXURE-III TO THIS O RDER THAT THE TOTAL FOREIGN EXCHANGE GAIN ON ACCOUNT OF REALI ZATION OF PROCEEDS FROM DEBTORS AND REQUIRES TO BE ADDED AS P ART OF THE OPERATING INCOME ON RENDERING SOFTWARE DEVELOPMENT SERVICES AS THE SAID INCOME IS ONLY ON ACCOUNT OF T RANSACTIONS OF RENDERING SOFTWARE DEVELOPMENT SERVICES BY THE A SSESSEE TO ITS AE AND THE FOREIGN EXCHANGE FLUCTUATION AT T HE TIME OF M.P. NO.40/BANG/2014 [IN IT(TP)A 1380/BANG/2012] PAGE 7 OF 13 REALIZATION OF THE PAYMENT FOR RENDERING SOFTWARE DEVELOPMENT SERVICES. IT IS THEREFORE CLEAR THAT T HE FOREIGN EXCHANGE FLUCTUATION IN QUESTION HAS TO BE TREATED AS PART OF THE OPERATING INCOME OF SOFTWARE DEVELOPMENT SERVIC ES SEGMENT OF THE ASSESSEE AND THE OPERATING PROFIT TO OPERATING COST HAS TO BE DETERMINED ACCORDINGLY. IN OUR VIEW , THE DECISION RENDERED BY THE TRIBUNAL IS BINDING ON THE REVENUE AUTHORITIES. IN THE GIVEN FACTS AND CIRCUMSTANCES, WE HOLD THAT THE FOREIGN EXCHANGE GAIN FROM SOFTWARE DEVELO PMENT SERVICES HAS TO BE CONSIDERED AS PART OF THE INCOME FROM SOFTWARE DEVELOPMENT SERVICES WHILE COMPUTING THE M ARGIN OF THE ASSESSEE AND ACCORDINGLY THE MARGIN OF 12.67 % COMPUTED BY THE ASSESSEE IS DIRECTED TO BE ADOPTED. THE AO/TPO IS ALSO DIRECTED TO COMPUTE THE OPERATING MA RGINS OF THE COMPARABLE COMPANIES BY INCLUDING THE FOREIG N EXCHANGE GAIN ON ACCOUNT OF REALIZATION OF PROCEEDS FROM RENDERING SOFTWARE DEVELOPMENT SERVICES. 10. SIMILARLY, AFTER PARA 9 OF THE ORIGINAL ORDER O F TRIBUNAL, PARA 9A TO 9D BE INSERTED , WHICH READ AS FOLLOWS:- M.P. NO.40/BANG/2014 [IN IT(TP)A 1380/BANG/2012] PAGE 8 OF 13 9-A. AS FAR AS COMPARABLE AT SL.NO.4 OF THE LIST O F COMPARABLE CHOSEN BY THE TPO VIZ., E-ZEST SOLUTIONS LTD., IS CONCERNED, THE COMPARABILITY OF THE AFORESAID COMPA NY WITH THAT OF THE SOFTWARE SERVICE PROVIDER WAS CONSIDERE D BY THE BANGALORE BENCH OF ITAT IN THE CASE OF 3DPLM SOFTWA RE SOLUTIONS VS. DCIT IT(TP)A NO.1303/BANG/2012, WHEREIN ON THE COMPARABILITY OF THE AFORESAID COMPANY WITH A SOFTWARE DEVELOPMENT SERVICE PROVIDER, THE TRIBUNAL HELD AS FOLLOWS:- 14. E-ZEST SOLUTIONS LTD. 14.1 THIS COMPANY WAS SELECTED BY THE TPO AS A COMPARABLE. BEFORE THE TPO, THE ASSESSEE HAD OBJECTED TO THE INCLUSION OF THIS COMPANY AS A COMPARABLE ON THE GROUND THAT IT WAS FUNCTIONALLY DIFFERENT FROM THE ASSESSEE. THE TPO HAD REJECTED THE OBJECTIONS RAISED BY THE ASSESSEE ON THE GROUND THAT AS PER THE INFORMATION RECEIVED IN RESPONSE TO NOTICE UNDER SECTION 133(6) OF THE ACT, THIS COMPANY IS ENGAGED IN SOFTWARE DEVELOPMENT SERVICES AND SATISFIES ALL THE FILTERS. 14.2 BEFORE US, THE LEARNED AUTHORISED REPRESENTATIVE CONTENDED THAT THIS COMPANY OUGHT TO BE EXCLUDED FROM THE LIST OF COMPARABLES ON THE GROUND THAT IT IS FUNCTIONALLY DIFFERENT TO THE ASSESSEE. IT IS SUBMITTED BY THE LEARNED AUTHORISE D REPRESENTATIVE THAT THIS COMPANY IS ENGAGED IN E- BUSINESS CONSULTING SERVICES, CONSISTING OF WEB STRATEGY SERVICES, I T DESIGN SERVICES AND IN TECHNOLOGY CONSULTING SERVICES INCLUDING PRODUCT DEVELOPMENT CONSULTING SERVICES. THESE SERVICES, THE LEARNED AUTHORISED REPRESENTATIVE CONTENDS, ARE HIGH END ITES NORMALLY CATEGORISED AS KNOWLEDGE PROCESS OUTSOURCING (KPO) SERVICES. M.P. NO.40/BANG/2014 [IN IT(TP)A 1380/BANG/2012] PAGE 9 OF 13 IT IS FURTHER SUBMITTED THAT THIS COMPANY HAS NOT PROVIDED SEGMENTAL DATA IN ITS ANNUAL REPORT. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITS THAT SINCE THE ANNUAL REPORT OF THE COMPANY DOES NOT CONTAIN DETAILED DESCRIPTIVE INFORMATION ON THE BUSINESS OF THE COMPANY, THE ASSESSEE PLACES RELIANCE ON THE DETAILS AVAILABLE ON THE COMPANYS WEBSITE WHICH SHOULD BE CONSIDERED WHILE EVALUATING THE COMPANYS FUNCTIONAL PROFILE. IT IS ALSO SUBMITTED BY THE LEARNED AUTHORISED REPRESENTATIVE THAT KPO SERVICES ARE NOT COMPARABLE TO SOFTWARE DEVELOPMENT SERVICES AND THEREFORE COMPANIES RENDERING KPO SERVICES OUGHT NOT TO BE CONSIDERED AS COMPARABLE TO SOFTWARE DEVELOPMENT COMPANIES AND RELIED ON THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF CAPITAL IQ INFORMATION SYSTEMS (INDIA) (P) LTD. IN ITA NO.1961(HYD)/2011 DT.23.11.2012 AND PRAYED THAT IN VIEW OF THE ABOVE REASONS, THIS COMPANY I.E. E- ZEST SOLUTIONS LTD., OUGHT TO BE OMITTED FROM THE LIST OF COMPARABLES. 14.3 PER CONTRA, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE INCLUSION OF THIS COMPANY IN THE LIST OF COMPARABLES BY THE TPO. 14.4 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. IT IS SEEN FROM THE RECORD THAT THE TPO HA S INCLUDED THIS COMPANY IN THE LIST OF COMPARABLES ONLY ON THE BASIS OF THE STATEMENT MADE BY THE COMPANY IN ITS REPLY TO THE NOTICE UNDER SECTION 133(6) OF THE ACT. IT APPEARS THAT THE TPO HAS NOT EXAMINED THE SERVICES RENDERED BY THE COMPANY TO GIVE A FINDING WHETHER THE SERVICES PERFORMED BY THIS COMPANY ARE SIMILAR TO THE SOFTWARE DEVELOPMENT SERVICES PERFORMED BY THE ASSESSEE. FROM THE DETAILS ON RECORD, WE FIND THAT WHILE THE ASSESSEE IS INTO SOFTWARE DEVELOPMENT SERVICES, THI S COMPANY I.E. E-ZEST SOLUTIONS LTD., IS RENDERING PRODUCT DEVELOPMENT SERVICES AND HIGH END TECHNICAL SERVICES WHICH COME UNDER THE CATEGORY OF KPO SERVICES. IT HAS BEEN HELD BY THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF CAPITAL I-Q INFORMATION SYSTEMS (INDIA) (P) LTD. SUPRA) THAT KPO SERVICES ARE NOT COMPARABLE TO SOFTWARE DEVELOPMENT SERVICES AND ARE THEREFORE NOT M.P. NO.40/BANG/2014 [IN IT(TP)A 1380/BANG/2012] PAGE 10 OF 13 COMPARABLE. FOLLOWING THE AFORESAID DECISION OF THE CO-ORDINATE BENCH OF THE HYDERABAD TRIBUNAL IN THE AFORESAID CASE, WE HOLD THAT THIS COMPANY, I.E. E-ZEST SOLUTIONS LTD. BE OMITTED FROM THE SET OF COMPARABLES FOR THE PERIOD UNDER CONSIDERATION IN THE CASE ON HAND. THE A.O. / TPO IS ACCORDINGLY DIRECTED. 9-B. THE LEARNED DR HOWEVER SUBMITTED THAT THE COMPARABILITY OF THIS COMPANY WITH A SOFTWARE DEVEL OPMENT SERVICE PROVIDER WAS NOT OBJECTED TO BY ASSESSEES WHO ARE IN SIMILAR BUSINESS IN SEVERAL CASES LIKE THE CASE OF TELECORDIA (SUPRA), LOGICA (SUPRA) AND TRIOLOGY E- BUSINESS(SUPRA). ACCORDING TO HIM THE ASSESSEE IN THE PRESENT APPEAL SHOULD NOT BE PERMITTED TO TAKE A PL EA THAT THIS COMPANY IS NOT COMPARABLE. BESIDES THE ABOVE, IT W AS ALSO HIS SUBMISSION THAT THE DECISION RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE RELATES TO AY 07-08 WHEREA S THE CASE OF THE ASSESSEE IN THIS APPEAL RELATES TO AY 0 8-09. ACCORDING TO HIM IT NEEDS TO BE VERIFIED AS TO WHET HER THE FUNCTIONAL PROFILE OF THIS COMPANY CHOSEN AS COMPAR ABLE HAS CHANGED IN AY 08-09. 9-C. WE HAVE CONSIDERED THE SUBMISSION OF THE LEAR NED DR AND ARE OF THE VIEW THAT THE FIRST OBJECTION RAISED BY HIM IS WITHOUT ANY BASIS. THE FACT THAT ONE ASSESSEE IN T HE M.P. NO.40/BANG/2014 [IN IT(TP)A 1380/BANG/2012] PAGE 11 OF 13 SOFTWARE DEVELOPMENT SERVICES SECTOR ACCEPTS A COMP ANY AS A COMPARABLE DOES NOT BAR ANY OTHER ASSESSEE IN THE SAME LINE OF BUSINESS TO TAKE A STAND THAT SUCH A COMPAN Y IS NOT COMPARABLE. IN THIS REGARD THE IMPORTANT ASPECT TO BE NOTICED IS THAT THE ASSESSEES IN THE CASES CITED BY THE LEA RNED DR HAVE NOT RAISED A PLEA THAT THE SAID COMPANY IS NOT FUNCTIONALLY COMPARABLE AND THE SAME HAS BEEN REJEC TED BY THE TRIBUNAL. IN OTHER WORDS THE FUNCTIONAL COMPAR ABILITY OF THE SAID COMPANY HAS NEVER BEEN SUBJECT MATTER OF INVESTIGATION IN ANY OF THE CASES. IN THE PRESENT CASE THE ASSESSEE HAS CHOSEN TO OBJECT TO THIS COMPANY BEING CHOSEN AS A COMPARABLE AND THE DECISION OF THE TRIBUNAL CI TED BY THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORTS HIS PLEA. THERE IS NO CONTRARY DECISION BROUGHT TO OUR NOTICE TO TAKE A DIFFERENT VIEW. WE MAY ALSO ADD THAT COMPARABILITY AND NON- COMPARABILITY OF COMPANIES IN THE MATTER OF DETERMI NATION OF ALP IS NOT DEPENDENT UPON ANY CONCESSION EITHER AT THE INSTANCE OF THE ASSESSEE OR THE REVENUE. AT ANY ST AGE IT CAN BE DEMONSTRATED THAT A COMPANY CHOSEN AS A COMPARAB LE IS IN FACT NOT COMPARABLE AND THAT WHICH HAS BEEN ACCE PTED AS NON-COMPARABLE IS IN FACT COMPARABLE. M.P. NO.40/BANG/2014 [IN IT(TP)A 1380/BANG/2012] PAGE 12 OF 13 9-D. WITH REGARD TO THE OBJECTION OF THE LEANED DR THAT THE FUNCTIONAL PROFILE OF THE COMPANY E-ZEST SOLUTIONS LTD. IN AY 07-08 HAS TO BE COMPARED WITH THAT IN AY 08-09 D ECIDED BY THE TRIBUNAL, WE ACCEPT THE SAID PRAYER AND FOR THIS LIMITED PURPOSE DIRECT THE TPO/AO TO EXAMINE AS TO WHETHER THERE IS ANY CHANGE IN THE PROFILE OF THE SAID COMP ANY SO THAT IT CAN BE REGARDED AS COMPARABLE WITH AN ASSESSEE R ENDERING SOFTWARE DEVELOPMENT SERVICE SUCH AS THE ASSESSEE. 11. THE ORIGINAL ORDER OF TRIBUNAL DATED 21.8.2014 WILL STAND MODIFIED IN THE MANNER INDICATED ABOVE. 40. IN THE RESULT, THE MISCELLANEOUS PETITION BY TH E ASSESSEE IS ALLOWED AS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS 28 TH DAY OF NOVEMBER, 2014. SD/- SD/- ( JASON P. BOAZ ) ( N.V. VASUD EVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 28 TH NOVEMBER, 2014. / DS / M.P. NO.40/BANG/2014 [IN IT(TP)A 1380/BANG/2012] PAGE 13 OF 13 COPY TO: 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.