Income Tax Appellate Tribunal - Delhi
Adobe Systems India Pvt. Ltd., Noida vs Assessee on 10 August, 2016
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH: 'I-2' NEW DELHI
BEFORE SMT DIVA SINGH, JUDICIAL MEMBER
AND
SH.PRASHANT MAHARISHI, ACCOUNTANT MEMBER
I.T.A .No.-1163/Del/2014
(ASSESSMENT YEAR-2009-10)
Adobe Systems India Pvt.Ltd., vs JCIT,
Plot No.1-1A, City Centre, Range-1,
Sector-25A, Noida-201301. Noida.
PAN-AACCA2982J
(Appellant) (Respondent)
I.T.A .No.-1004/Del/2014
(ASSESSMENT YEAR-2009-10)
JCIT, vs Adobe Systems India Pvt.Ltd.,
Range-1, Plot No.1-1A, City Centre,
Noida. Sector-25A, Noida-201301.
PAN-AACCA2982J
(Appellant) (Respondent)
Appellant by Sh.Vijay Iyer, CA
Respondent by Sh.Amit Mohan Govil, CIT DR
Date of Hearing 19.05.2016
Date of pronouncement 10.08.2016
ORDER
PER DIVA SINGH, JUDICIAL MEMBER
These are cross appeals filed by the assessee and the Revenue assailing the correctness of the order dated 28.08. 2014 of AO u/s 143(3) r.w.s. 144C pursuant to the directions of the DRP dated 03.12.2013. Although various grounds have been raised by the assessee in the appeal filed, however, at the time of hearing, the Ld. AR submitted I.T.A .No.-1163 & 1004/Del/2014 that he was instructed by his client to only argue Ground No.6 & 14 in the present appeal. These two grounds are reproduced hereunder for ready-reference:-
6. "The learned AO/TPO/DRP have erred in rejecting certain companies which are comparable to the Appellant and adding certain functionally dissimilar companies to the final set of comparable companies. .............
14. The learned AO/DRP have erred by making suitable adjustments to account for differences in the working capital employed by the Appellant vis-à-
vis the comparable companies."
1.1. We further find that apart from the grounds originally raised by the Revenue petition for admission of additional grounds was filed. The grounds originally raised read as under:-
1. "Whether on facts and circumstances of the case and in law, Hon'ble DRP has erred in removing Zylog Systems and Quintegra Solutions Ltd. from list of comparables.
2. On facts and circumstances of the case and in law whether the comparables included by the Department can be rejected on the ground of being functionally different on the basis of characteristics which are also present in the comparables included by the assessee himself. In such an eventuality whether the comparables included by the assessee having similar characteristics need also be excluded.
3. Whether on the facts and circumstances of the case and in law, it would not be proper for Tribunal to set aside the matter to the file fo the TPO for re-examination when it is found that both the departments' comparables and the comparables included by the assessee both suffered from similar functional dissimilarity."
1.2. By petition dated 07.04.2016 admission of the following additional grounds was raised:-
1. "The Dispute Resolution Panel (DRP) has erred in law and on facts in excluding the comparable company M/s Bodhtree Consulting Limited, which was included as a comparable company in earlier assessment years, which was not contested by the assessee.
2. The DRP has erred in law and on facts in excluding M/s Bodhtree Consulting Limited as a comparable company without appreciating the facts put forth by the TPO in his order u/s 92CA(3).
3. The DRP has erred in law & on facts in excluding M/s Bodhtree Consulting Ltd. as a Comparable Company when there was no functional change in the Page 2 of 16 I.T.A .No.-1163 & 1004/Del/2014 Company's profile from the earlier assessment years, except that the Company has declared better pro tits during the Near under consideration, which is not a criteria for its exclusion.
4. That the Dispute Resolution Panel (DRP) has erred in law and on facts in allotting relief of Rs.15,83,36,014/- in the upward adjustment of Arms Length Price marked amount by the T.P.O. 92CA(3) by including & excluding the comparable company without appreciating the facts put forth by the T.P.O. in his order u/s 92CA(3).
5. That the appellant craves to leave, add, alter and amend any of the grounds of appeal on or before hearing.
6. That the order of the DRP being erroneous in law and on facts deserves to be set aside/cancelled and the order of the Transfer Pricing Officer be restored."
2. Supporting the petition filed it was submitted by the Ld.CIT DR that the additional grounds arise from the impugned order and at the time of filing of the appeal, these grounds inadvertently were not raised. Accordingly it was his prayer that these grounds may be admitted. The Ld.AR did not object to the admission of the grounds and it was his submission hat on consideration of the arguments on behalf of the assessee, it would be seen that the grounds would be academic in the year under consideration.
3. The Ld.AR addressing the assessee's appeal invited attention to the synopsis filed at the time of hearing and carrying us through the orders of the TPO and of the DRP submitted that in the Marketing Support Services Segment, it was his prayer that APTICO Ltd. and TSR Darashaw may be directed to be excluded from the list of comparable companies.
3.1. Addressing the Software Development Service Segment, prayer for exclusion of (a) Bodhtree Consulting Ltd; (b) Infosys Technologies Ltd.; (c) Tata Consultancy Services Ltd.; (d) WIPRO Ltd.; and (e) Zenith Infotech Ltd. is made. 3.2. The prayer for exclusion of the comparable in the 2 segments it was submitted is supported by the Annual Financial Reports of the comparable companies. Relying upon Page 3 of 16 I.T.A .No.-1163 & 1004/Del/2014 the FAR of the assessee as considered by the tax authorities and the judicial precedent as cited in the synopsis filed, it was his prayer that the claim of the assessee may be allowed.
4. Addressing the arguments for exclusion of APTICO Ltd. it was submitted that as a comparable the said company had been excluded by the DRP in 2011-12 AY holding that this company is a functionally different entity and it hence does not make a good comparable to the assessee in MSS function". Copy of the order dated 21.09.2015 of the DRP in 2011-12 AY it was submitted is at pages 1501-1508 and the relevant discussion is at page 1516. Apart from that it was submitted that for the exclusion of the said comparables, reliance was also placed upon the order of the ITAT dated 14.08.2014 in Stay Petition No.130/Bang/2014 IT(TP)A No.271/Bang/2014 in the case of M/s Cisco Systems (India) vs DCIT wherein the issue has been discussed at page 59 para 53.27. The ITAT in the facts it was his submission held that the company engaged in the activities of skill development, tourism research, environment etc. was held to be functionally different and thus not comparable to the assessee. The facts of the present assessee and that of CISCO System India Pvt.Ltd. it was submitted were identical. The assessee was rendering software development services and also handling marketing support service sector.
5. Inviting attention to the next comparable i.e TSR Darashaw it was his submission that the said comparable had been excluded by the DRP in assessee's own case for 2008- 09 AY and copy of this order is available at page 458 to 478 and the relevant discussion is at page 473. The exclusion it was submitted was directed on the following reasoning:- Page 4 of 16
I.T.A .No.-1163 & 1004/Del/2014
- "Panel agrees with the contention of the assessee. The functional profile of this company is quite different from that of the assessee and therefore, it should not be used comparable."
5.1. Apart from that it was his submission that in a subsequent AY 2010-11, the DRP again directed the exclusion of the said comparable, copy of this decision it was submitted is placed at pages 479 to 496. It was submitted that the reasoning given is available at page 489 which clearly brings out the fact that following the DRP's order for the preceding year, the comparable was rejected. It was his submission that no appeal against the said order of the DRP had been filed by the Revenue. Attention was invited to pages 375 to 377 of the Paper Book and page 431 which is a copy of Schedule-"L" of the financial statements of 31.03.2009 wherein the notes to the accounts disclosed the following activities namely Registrar and Transfer Agent Activity; Records Managements Activity (Records); and Payroll and Trust Fund Activity (Payroll). The said activity, it was submitted cannot be said to be comparable to marketing support service.
6. Addressing the Software Development Segment, the Ld.AR submitted that the assessee has posed objection to the inclusion of (a) Bodhtree Consulting Ltd (the said company it was submitted has been excluded by the DRP and the Revenue's appeal is thereon); (b) Infosys Technologies Ltd. (excluded in assessee's own case); (c) Tata Consultancy Services Ltd.(excluded in assessee's own case for 2008-09 AY); (d) WIPRO Ltd.(excluded in assessee's own case in 2008-09 AY); and (e) Zenith Infotech Ltd.
(excluded in assessee's own case). It was submitted that since in the facts of the present case the retention of these comparables does not have any impact on the arm's length price then for the record and in order to keep the issue alive the assessee may be considered to have argued in favour of exclusion of these comparable in the year under Page 5 of 16 I.T.A .No.-1163 & 1004/Del/2014 consideration relying upon the past precedent available in assessee's own case and various other facts which are brought out in the synopsis and the chart therein filed reserving its right to subsequently argue for the exclusion of these comparables on a future date if so warranted. The issue in the present proceedings it was submitted for want of any adjustment required is academic and thus may not be required to be contested vigorously and seek adjudication.
7. Addressing the next grievance of the assessee i.e. working capital adjustment it was submitted by the ld.AR that the ITAT had directed working capital adjustments in assessee's case in 2008-09 and 2006-07 AYs. For the specific purposes, attention was invited to order dated 29.10.2014 in ITA No.5963/Del/2012, copy placed at pages 438 to 446 of the Paper Book. The relevant discussion it was submitted is in paras 15 to 18 wherein relying upon various decisions of the ITAT including the decision in the case of Navisite India Pvt.Ltd., the TPO was directed to decide the issues after affording the assessee an opportunity of being heard:-
15. "On the issue of working capital adjustment raised in Ground No.8, the Learned AR submitted that during the course of assessment proceedings, the assessee had submitted that in comparing the margin earned by comparables, vis-à-vis, the assessee, differences on account of working capital employed should also be factored into. However, the TPO/DRP rejected the claim of working capital adjustment on the ground that the assesses has not been able to demonstrate that the difference in working capital employed by the comparables and the assessee is affecting comparability and the reliable data is not available for making such adjustment. He pointed out that in the case of assesses itself for the assessment year 2006-07, Learned TPO has allowed WCA. In this regard, he referred page Nos. 153 & 154 of the Order of the TPO for the assessment year 2006-07. He pointed out that in addition, the WCA margin of the comparable selected by the TPO/DRP is 20.81%. In this regard, he referred Page Nos. 178 & 179 of the paper book. He also cited the following decisions in support of the issue:
1.Mentar Graphics NoidsPvt. Ltd. Vs. DCIT (2007) 109 ITD 101;
2. E-gain Communication Pvt. Ltd. Vs. ITO (2008) 23 SOT 389;Page 6 of 16
I.T.A .No.-1163 & 1004/Del/2014
3. Demag Cranes & Components (India) Pvt. Ltd. ITA No. 120/Pune/2011;
4. Navisite India Pvt Ltd. Vs. ITO - ITA No.5329/Del/2012;
5. Nokia India Pvt. Ltd. Vs. ACIT - ITA No.551/Del/2011.
16.. The Learned AR submitted that the issue is otherwise also covered by the decision of the ITAT in the case of Navisite India Pvt. Ltd. Vs. ITO (supra).
17. The Learned CIT(DR) on the other hand tried to justify the orders of the authorities below on the issue.
18. Having gone through the above cited decisions, we find that in the case of Navsite India Pvt Ltd. vs.ITO (supra), the ITAT after discussing the issue in detail has restored back the issue to the file of the learned TPO for making the working capital adjustment to the profit margins of comparables after affording opportunity to demonstrate that there was difference in the levels of working capital employed, vis-a-vis the comparables. Following the same, we hold that the opening working capital deployed and the closing working capital deployed has to be taken into consideration for making any adjustment to the working capital deployed in the case of a comparable, of course, the assesses for availing the above benefit has to demonstrate that there was difference in the levels of working capital employed, vis-a-vis, the comparables. We thus set aside the matter lo the file of the TPO to decide the issues accordingly after affording opportunity of being heard to the assessee. The ground No.8 is thus allowed for statistical purposes."
7.1. It was also his submission that the TPO in assessee's own case in 2011-12 & 2012- 3 AYs has allowed working capital adjustment to the assessee. Apart from judicial precedent in assessee's own case, reliance was placed upon Mercer Consulting India Pvt.Ltd. (ITA No.966/Del/2014) for AY 2009-10; Agilent Technologies International Pvt.Ltd. (ITA No.1837/Del/2014); Navisite India Pvt. Ltd. (ITA No.5329/Del/2012) [Para 72 page 53]; and Nortel Networks India Pvt.Ltd.-Delhi ITAT-ITA No.4765/Del/2011 and 427/Del/2013-page 8 [para 10.8]. Accordingly a similar direction was requested for in the present proceedings.
8. The Ld. CIT DR, Mr. Govil relying upon the findings recorded in the orders of the TPO & DRP submitted that both the comparables sought to be excluded in the marketing support services segment may be retained and the ground of the assessee accordingly Page 7 of 16 I.T.A .No.-1163 & 1004/Del/2014 may not be allowed. It was his submission that in a method like TNMM exact identical comparable company is not required to be selected as it is a fact that exact replica of a company is not possible to the found. It was his submission that in a method like TNMM as long as broad functional comparability is established then an assessee cannot be permitted to argue for exclusion of comparables based on arguments pointing to micro differences. This common approach of tax payer at large to selectively pick apart the list of comparable it was submitted should not be allowed.
8.1. It was also his submission that whenever an assessee selects a method like TNMM as the most appropriate method then unless an until after going through the filters selected and arriving at a list of comparable having broad functional comparability then exclusion can only be sought on the ground that an event fact or incident impacts the net profitability of the said comparable. The selection of comparables wherein the assessee has fully participated it was submitted cannot be outrightly changed at the appellate stage merely relying on precedent accepting arguments where even the similarity of facts has not been cared to be established by the assessee. The arguments it was submitted cannot be accepted as the facts may differ from year to year in the case of the assessee or the comparable or in the precedent cited and the prayer for exclusion or inclusion of a comparable it was submitted would presume that the same level of hair splitting is done vis-à-vis the assessee as the tested party and the assessee in the precedent cited. No such effort it was submitted is ever attempted by the assessee and precedents are cited indiscriminately without addressing the facts first.
Page 8 of 16
I.T.A .No.-1163 & 1004/Del/2014 8.2. In the said background, addressing the inclusion of Bodhtree Consulting Ltd. requested for by the Revenue which was excluded by the DRP it was submitted that broad functionality is comparable and accordingly it may be included. Reliance was placed upon the TPO's order who has discussed the issue at page 43. Relying on the same it was submitted that the objections of the assessee that it was engaged in a wide variety of services has been rejected by the TPO holding that functional profile is identical. The DRP it is seen has directed the exclusion of the said comparable on the ground that the company has shown abnormal growth of 67% as compared to preceding years. On FAR profile the DRP held that it is engaged in produced engineering, analytical service & enterprise services which are essentially similar to those of the assessee. The very purpose of selecting sufficient number of comparables it was argued was to have all kinds of comparables.
8.3. Addressing the comparables addressed in the Software Development Segment which were directed to be retained by the DRP namely Quintegra Solutions Ltd. and Zylog Systems Limited. The Ld.CIT DR drew attention to the chart of issues brought out in internal pages 7 and 8 of the DRP's order. A perusal of the same it was submitted would show that the inclusion of these two companies has been directed on account of the following reasoning:-
QUINTEGRA SOLUTION • "The company is manly engaged in software development service. Following DRP's direction issued for preceding AY, it is retained as comparable, TPO/AO id directed accordingly.
ZYLOG SYSTEM LTD.
• FAR profile is essentially comparable to that of the assessee. TPO has other not applied onsite revenue filter. The assessee has contended that for Page 9 of 16 I.T.A .No.-1163 & 1004/Del/2014 preceding AY, TPO has accepted the company as comparable. In view of this, it is retained as comparable."
8.4. It was his submission that the reasoning that in some years a comparable has been included is not a good enough ground to continue its retention. Inclusion or exclusion should be justified on its own facts.
9. The Ld.AR addressing the comparable in the software development segment submitted that the issue would become academic and it may not be necessary in the facts of the present case to decide the same as the assessee would be within the (+/-) 5% margin and he would have no objection if the departmental ground is allowed reserving the right of the assessee to contest the issue in subsequent years, if so warranted.
10. Addressing the working capital adjustment requested for by the Ld.AR on the basis of past precedent, the Ld. CIT DR submitted that he had no objection if the issue following past precedent is restored back to the TPO for a decision on merit.
11. We have heard the rival submissions and perused the material available on record.
The assessee in the year under consideration e-filed its return of income declaring an income of Rs.24.74 crore odd after claiming the exemption u/s 10A of the Act at Rs.32.78 crore odd. The record shows that the AO in the order u/s 143(3) r.w.s.144C passed pursuant to the DRP's directions noticed that the assessee is engaged in the development of software in various stages like engineering, research, development, debugging, coding, quality controls checks, testing application, designing & programming and is exporting its services to M/s Adobe System Inc., USA and to M/s Adobe Systems Software, Ireland. Apart from that the assessee was also providing Marketing & Support Services for the products of M/s Adobe System Inc., USA in India. Page 10 of 16
I.T.A .No.-1163 & 1004/Del/2014 11.1. In the year under consideration, in its Form No.3CEB it was seen that the assessee had disclosed the following international transactions:-
S.No. Nature of transaction Value of transaction Method adopted
1. Provision of Software Development 2,85,97,82,441 TNMM Services
2. Payment of data linkage charges 1,98,75,759 TNMM
3. Provision of marketing sales support 13,88,45,364 TNMM services 11.2. The assessee in its TP study in the Marketing Sales Support Services selected TNMM as the most appropriate method using OP/TC ratio as the PLI. The assessee selecting 13 comparables using multiple year data arrived at the average PLI of 9.87% of the comparables and comparing it to the assessee's PLI of 26.06% claimed that the transactions were at arms length.
11.3. The functions performed by the assessee in respect of marketing support services were explained as under:-
- "Marketing activities
- Adobe India undertakes marketing activity in India under the guidance of Adobe Ireland. In inter alia performs the following activities;-
- Visit distributors & direct customers to inform them about existing Adobe application products to be licensed by Adobe Ireland.
- Visit distributors direct customers and strategic partners to inform them and explain new Adobe Application products to be licensed in India.
- Follow up until delivery of orders, which are directly put in, by distributors & other customers.
- Market Research-Adobe India informs Adobe Ireland of current market trends & developments in India by monitoring the industry, market prices, political factors & supply & demand in Indian market. The service agreement between Adobe India & Adobe Ireland shows:- Adobe Ireland desires to appoint Adobe India as its representative and to delegate to Adobe India the performance of certain of its duties to its distributors in connection with pre-sales, as well as marketing and training services related to the India territories market."Page 11 of 16
I.T.A .No.-1163 & 1004/Del/2014 11.4. The TPO rejecting the multiple year data and considering the functions performed was of the view that the services provided by the assessee to its AE entitle the assessee for higher remunerations than what could be available to a routine service provider as on examining the nature of services provided by Adobe India he was of the view that services provided were in the nature of business support services. Considering the functions, he was of the view that since complete business support i.e. pre-sales support, marketing training including the whole gamut of business support services were being provided by the assessee to its foreign AE i.e Adobe Ireland, he was of the view that for the services provided "the fees paid to Adobe India by Adobe Ireland will be equal to costs incurred by Adobe India in providing sales support services plus 1.5% of regional revenue from the India Territories", keeping the functions performed by the assessee was not adequate. Accordingly considering the functions performed the routine cost plus 1.5% of the Regional revenue of India Territories was considered to be inadequate compensation.
He was of the view that such market behavior is unlikely to answer the arm's length principle. Accordingly relying on the conclusions arrived at in the other segment he was of the view that it could be said that no independent party would have agreed to such terms to provide such services. Accordingly 5 comparables having average OP/TC margin of 27.13% were selected which formed the basis of adjustment of Rs.2,35,01,986/-. The issue was carried in appeal before the DRP and qua the two specific comparables the TPO was directed to check the working of profit margin provided by the assessee. 11.5. Pursuant to the direction of the DRP the TPO carried out the following corrections:- Page 12 of 16
I.T.A .No.-1163 & 1004/Del/2014
7. Marketing & Sales Support Services:
"Following comparables have been used by the TPO for Marketing & Sales Support Services in the order dated 30.01.2013 for computation of Arm's Length Price of the international transaction:-
S.No. Name of the Company OP/TC (%)
1. APTICO Limited 37.70%
2. Global Procurement Consultant 35.89%
3. IDC (India) Limited 14.95%
4. Priya International Limited (Segmental) 20.17%
5. TSR Darashaw Limited 26.98%
Arithmetic Mean 27.13%
8. Computation of OP/TC of Marketing Support Services Segment:-
DRP vide its order dated 03.12.2013 directed to include ICRA Management Consulting Limited in the list of comparables and exclude Global Procurement Consultants Limited for the benchmarking of the Provision of Marketing Support Services Segment.
9. Mean margin of comparables of Marketing Support Services Segment for AY 2009-10 as directed by DRP is recomputed as under:-
S.No. Name of the Company OP/TC (%)
1. APTICO Limited 37.72%
2. ICRA Management Consulting Ltd. 1.12%
3. IDC (India) Limited 14.95%
4. Priya International Limited (Segmental) 20.17%
5. TSR Darashaw Limited 26.98%
Arithmetic Mean 20.18%
11.6. This resulted in an addition of Rs.1,18,51,961/-.
11.7. In the said factual matrix, we find that as per record the assessee objected to the inclusion of APTICO Ltd. on the ground that the company was providing non-comparable services and no segmental results have been provided TSR Darashaw's inclusion was objected to on the ground that the company was providing non-comparable services as it was providing Record management and payroll activity which were clearly business service and an integral part of its business. The said objections were over-ruled by the Page 13 of 16 I.T.A .No.-1163 & 1004/Del/2014 TPO who held that since TNMM was being used, different verticals of business services and small functional difference are not so relevant.
11.8. The assessee carried these objections to the DRP who also over-ruled the objection posed on the following reasoning:-
S.No. Nature of the Our arguments for exclusion DRP's view company
1. APTICO Limited • Non Comparable services- Annual report shows the Company provided a variety company is engaged in of services and with no consulting services to SME in segmental results cannot be project counseling, project compared to a marketing reports, infrastructural planning support services company etc. FAR profit is essentially • Earning supernormal profits similar to that of the assessee.
Hence, retained as comparable.
2. TSR Darashaw • Non comparable services- Annual report shows that it is Engaged in the provision of engaged in record management IT-enabled services and payment activities which are • Rejected by the Hon'ble DRP in any case business services.
in assessee's own case in AY FAR profile is essentially similarly
2008-09 to this of the assessee. Hence
retained as comparable.
11.9. On considering the submissions of the parties and the material available on record, we find that APTICO Ltd. as a comparable has wrongly been included as a comparable as per the financials available on record the following extract shows that following disclosure on state of affairs is given:-
"During the year under review, your Company has completed a total of 237 assignments of varied nature compared to 285 during the previous year."
It is seen that as per the website http://www.aptico.org/aboutus.html and at APITCO, we offer a wide range of consulting services, especially to SMEs in project identification, project counseling, pre-feasibility reports, detailed project feasibility studies, infrastructure planning, market assessment, expansion, diversification and turnaround strategies, energy audits, waste minimization, environment impact assessment, valuation oof fixed assets, skill development etc. Extending handholding to micro entrepreneurs through its 'escorts services' is APITCO's USP. Thus the said company is evidently rendering consultancy related to asset reconstruction and management services, micro enterprise development, skill development, entrepreneurship development, cluster development among other activities.
Further it is also excluded as a comparable qua this segment by the DRP in 2011-12 Ay and on the issue, no appeal has been filed by the Revenue.
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I.T.A .No.-1163 & 1004/Del/2014 11.9.1. Accordingly, in view of the above reasoning, the exclusion of this comparable is directed.
11.10. Considering the grievance qua TSR Darashaw, we find that the said company apart from being engaged in payroll processing, record management is also engaged in depository related services. The nature of activity cannot be said to be comparable to marketing support services. It is further seen that the DRP has also excluded the said comparable in 2008-09; 2010-11 and 2011-12 AYs and no appeal it is stated has been filed by the Revenue in these respective years on exclusion of the said comparable. 11.10.1. Accordingly, in the light of the above facts, we find that the said comparable cannot be said to be comparable to the assessee and is directed to be excluded.
12. Addressing the departmental ground wherein inclusion of Quintegra Solutions Ltd. and Zylog Systems Limited. Has been carried out on the direction of the DRP which is being opposed by the Revenue relying on past precedent, we find that in the light of the submissions of the Ld. AR the departmental ground is to be allowed. While so holding, we record that the issue is not vigorously contested by the assessee as on account of non- impact on the arms length price the issue is considered to be academic by the assessee, however the right to contest the issue in a future is not given up. Thus, we hold that allowing of the departmental ground in the peculiar facts and circumstances of the present case shall not act as a precedent to be followed in assessee's case in subsequent years. Accordingly, in these peculiar facts and circumstances, the departmental ground is allowed.
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13. No specific argument in support of Ground Nos. 2 & 3 originally raised by the Revenue was advanced by the ld.CIT DR and no specific prayer in respect thereof was also made. Accordingly the grounds are dismissed as requiring no specific adjudication.
14. Qua the exclusion of Bodhtree Consulting Ltd. requested for by the Revenue in the additional ground the issue being academic for the assessee is allowed in Revenue's favour. However, the decision to include the said comparable it is held shall not be a precedent in any other year as the conclusion is based on a concession of the assessee which operates only in the year under consideration.
15. Accordingly, assessee's appeal is partly allowed for statistical purposes. The Revenue's appeal is partly allowed.
16. In the result the appeal of the assessee is partly allowed for statistical purposes and the Revenue's appeal is partly allowed.
The order is pronounced in the open court on 10th of August, 2016.
Sd/- Sd/-
(PRASHANT MAHARISHI) (DIVA SINGH)
ACCOUNTANT MEMBER JUDICIAL MEMBER
*Amit Kumar*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT
ASSISTANT REGISTRAR
ITAT NEW DELHI
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