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b. Aggrieved by the non-consideration of the above notwithstanding plea, your appellant humbly prays to allow admission of additional evidence as it constitutes an integral and crucial part of assessment proceedings."

4. At the outset, the learned Counsel for the assessee Shri Girish Dave and Ms Kadambari Dave referred to additional evidences filed on 01-06-2016 containing the following: -

             "a.     Memorandum of Association,

             b.    Addendum to customize software development
             and support agreement."

5. According to the learned Counsel, these documents were filed during the preceding years 2009-10, where these documents were not admitted as additional evidences. According to him, these are vital for deciding the issue and he particularly referred to the addendum to the customize software development and support agreement between the assessee and its AE in USA. The learned Counsel for the assessee referred to Page 112 of assessee's paper book, whereby he pointed out to the vacant portion of 6th Floor, which is vacant and hence, no services were rendered by the assessee for which, the AO has applied cost plus markup of 25%. On the other hand, Ld SR DR relied on the orders of lower authorities.

6. We have heard rival contentions and gone through facts and circumstances of the case. The facts are that the assessee i.e. Hostway IT A No . 1/ Mu m / 2 01 3 & 41 6 / Mu m/ 2 01 5 India has entered into an agreement' with Hostway Corporation Ltd ('Hostway US') and as per the terms of the agreement, it carried on the following activities:

a) IT enabled services developing customized software applications and

IT A No . 1/ Mu m / 2 01 3 & 41 6 / Mu m/ 2 01 5

9. These facts are undisputed. We find from the facts of the case that the total installed capacity of Hostway India was initially approved by Hostway USA and total Installed capacity took into consideration, the anticipated provision of certain additional services by assessee in the nature of 'web hosting services'. However for subject year under consideration, the 'web hosting services' were not provided by Hostway India at all and the space demarcated for such proposed services was not used for the proposed web hosting services and the same was eventually used by the assessee for the provision of its other regular services. Considering no services were rendered, for the unutilized portion, the assessee acted in a prudent manner by passing on such costs towards unutilized capacity to Hostway USA at cost. We find that the TPO considered and accepted in respect of total installed capacity and a portion of such installed capacity being unutilised but he specifically disputed that the mark-up should be charged on the expenses related to unitized portion of installed capacity. We find that the the TPO has specifically recorded that, 'The assessee has entered into an agreement with the AE was developing customized software applications in providing technical support and the AE. As per the agreement, the assessee is to receive 25% markup on cost. The cost Includes more direct and indirect employee, administrative and operational, commercial, legal and other expenses, liabilities, taxes and depreciation incurred by the taxpayer. Extraordinary expenses like preoperative expenses, loss on exchange, etc. are not considered in total cost."