in the income tax appellate tribunal, … the income tax appellate tribunal, bangalore bench ‘a’...
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IN THE INCOME TAX APPELLATE TRIBUNAL,
BANGALORE BENCH ‘A’
BEFORE SMT. P MADHAVI DEVI, JUDICIAL MEMBER
AND
SHRI JASON P BOAZ, ACCOUNTANT MEMBER
ITA No.789/Bang/2010 &
ITA Nos.487 & 925/Bang/2011
(Asst. Years - 2004-05, 2005-06 and 2006-07)
GE India Technology Centre Pvt. Ltd.,
Bangalore. . Appellant
PAN No.AABCG 0559J.
Vs.
The Dy.Director of Income-tax,
Circle 11(3),
Bangalore. . Respondent
Appellant by : Shri N.V Venkataraman, Sr. Counsel &
Shri Pawan Sharma
Respondent by : Shri S.K Ambastha, CIT-I(DR)
Date of Hearing : 31-10-2012
Date of Pronouncement : -12-2012
O R D E R
PER P MADHAVI DEVI, JUDICIAL MEMBER :
These appeals are filed by the assessee. The relevant
assessment years are 2004-05, 2005-06 and 2006-07. The appeals
for the assessment years 2004-05, 2005-06 are directed against the
ITA Nos.789/B/10,
487, & 925/B/11
2
order of the Commissioner of Income-tax - (Appeals) - IV at
Bangalore dated 30.03.2010, while appeal for the assessment year
2006-07 is against the order of the Assessing Officer passed in
accordance with the order of the DRP. The appeals arise out of the
assessments completed u/s 143(3) of the Income-tax Act, 1961.
2. As the issues involved in all the three appeals are common,
the appeals were heard together and are disposed of by this
common and consolidated order.
3. For the assessment year, 2004-05, grounds No.1 to 7 are
against
(a) the reference made by the AO to the Transfer Pricing Officer
(TPO) u/s 92CA of the Income-tax Act for the determination
of the ALP by rejecting the TP study made by the assessee;
(b) the order of the TPO holding the assessee to be a Service
Provider, working on Research and Development and not
Software Development as claimed by the assessee; and
(c) rejecting the assessee’s comparables and conducting his own
study and selection of comparables.
ITA Nos.789/B/10,
487, & 925/B/11
3
4. For the assessment year 2005-06, grounds No.1 and 2 are
also against the rejection of TP study conducted by the assessee
and upholding the transfer price study conducted by the Transfer
Pricing Officer.
5. For the assessment year 2006-07, the grounds of appeal
Nos1 and 2 are against the order of the DRP in upholding the draft
assessment order in spite of it being passed -
1) in violation of principles of natural justice;
2) not fulfilling the conditions for making a reference u/s
92CA of the Income-tax Act; and
3) failing to demonstrate that the assessee’s motive was to
shift the profit outside India and in upholding the TPO’s
order in making the TP adjustment.
6. At the time of hearing, the learned counsel for the assessee,
in addition to the oral arguments advanced, has also filed written
submissions stating that the grounds No.1 and 2 for the assessment
year 2006-07 and grounds No.1 to 7 for the assessment year 2004-
05 and grounds Nos.1 and 2 for the assessment year 2005-06 are
general grounds and, therefore, are not being dealt with. Further,
we find that issues/grounds raised by the assessee in these grounds
are covered by the decision of Special Bench of the Tribunal in the
ITA Nos.789/B/10,
487, & 925/B/11
4
case of M/s Aztech Software & Technology Services Ltd., which
has been confirmed by the Jurisdictional High Court in ITA
Nos.826 & 827/2007 dated 10th July, 2012 and, therefore, these
grounds are not adjudicated.
7. The common grievance in all the three years is against the
finding of the TPO that the activities of the assessee in the
international transactions are in the nature of ‘Service Provider’
working for ‘Research and Development’ and not ‘Software
Development’ as claimed by the assessee. We shall deal with this
issue first.
8. According to the assessee, it has entered into international
transactions with its associated enterprises for export of
customized electronic data, computer software and any other
tangible articles or things as a result of research activity.
Therefore, the assessee while conducting its TP study has
adopted/chosen the comparables which are all in the field of
‘development and export of computer software’. The Assessing
Officer made a reference to the transfer pricing officer u/s 92CA of
the Act for determination of the ALP (Arms Length Price).
During the proceedings u/s 92CA of the Income-tax Act, the TPO
ITA Nos.789/B/10,
487, & 925/B/11
5
observed that the assessee is providing contract services of
research and development and other services in various fields of
engineering. As per the service agreement dated 13.6.2001,
assessee has to provide the following services to the party making
such request.
• Identifying business opportunities and carry out research and
development/other services in the following services : -
a) Chemistry and Catalysis
b) Chemical Engineering and Mathematical Modeling
c) Engineering Mechanics
d) Electronics Systems
e) Industrial Electronics
f) Information Technology & E-Commerce
g) Metallurgy & Ceramics
h) Manufacturing & Business Process
i) Mechanical Systems
j) Polymer and other material sciences
k) Or any other areas mutually agreed.
9. As per the services agreement dated 1.12.2003, it has to
provide the following services to the party making such request -
• Identify business opportunities for overseas customers
business (of AE) for sourcing research & development/other
services from GEITC (the assessee) in the following areas –
a) Controls & Software
b) Propulsion Rotating Equipment
c) Tier II engine
d) Diesel Engine COE
e) Loco Modernization & Requisition Systems
f) Drafting
g) Cooling systems
h) New Product Introduction
i) Remote Monitoring & Diagnostics
ITA Nos.789/B/10,
487, & 925/B/11
6
j) Cores Engineering
k) E-Engg-Analysis
l) Or any other areas to be mutually agreed.
10. From the perusal of above agreements, the TPO observed
that the tax payer is doing the research and development activities
and the end result is submitted through electronic media (via
internet/networking) which is reported by the assessee as export of
customized electronic data. The TPO, therefore, asked the
assessee to furnish the details of FAR analysis in respect of each
agreement with AEs. In reply to the same, the assessee filed a letter
dated 29.9.2006 and made the following submission as regards the
nature of activities carried on by the assessee, tax payer -
1. GEITC is a private limited Company incorporated in
June, 1999 in the State of Karnataka. GEITC is engaged
in the business of exporting customized electronic data,
computer software, articles or things generated from
research activities using computer aided technology in
several areas of technology to other GE companies
outside India, and it is a captive R & D and engineering
service provider to GE.
2. All the research and software development activities are
carried out at the John F.Welch Technology Centre
(JFWTC) in various Laboratory/Development centers as
under –
a) Electronic System Laboratory
b) Chemical Engineering & Modeling Center
ITA Nos.789/B/10,
487, & 925/B/11
7
c) Manufacturing and Business Process
Laboratory
d) Information Technology Centre
e) Electrical Systems & Technology Laboratory
f) Industrial Engineering Laboratory
g) Advanced Mechanical Engineering
Laboratory
3) GEITC employs various qualified scientists and
researchers and engineers to carry out research and
software development activity in high impact
technology areas such as Electromagnetic Analytics,
Color Technology, Additive Technology etc.
4) The Scientists and Engineers engaged to carry out the
said activity are equipped with highly advanced
software development tools and also sophisticated
equipments such as NMR, High End Analytical
Equipment, High End IT Servers, HPC Nodes, Clean
Room Equipment etc. The scientists and engineers
employed by the company are highly qualified and
company is having more than 600 PhDs and 1000
Masters, who are qualified in the various areas of
High Impact Technology.
5) The kind of programs and projects that are provided
by the overseas GE affiliate companies can be
categorized as NPI (New Product Introduction)
projects, products enhancement programs;
productivity programs and RTS (Ready to Serve)
programs. Inputs along with the clear deliverables are
discussed before the beginning of the financial year
and appropriate investments including software tools
are committed.
6) 6)The general process employed in carrying out the
said research and engineering services using computer
aided technology includes –
a) Study the existing product
capabilities/engineering/chemical/manufact
uring process; understand the requirement
ITA Nos.789/B/10,
487, & 925/B/11
8
for enhanced features/improved processes
and work on modeling using software tools
and deliver the desired results in the form of
revised engineering design/drawings,
analysis reports in the form of customized
electronic data;
b) Collect existing data for the above purpose
of analysis and building engineering models
using simulation techniques and high-end
software tools;
c) Primary and detailed designing using
computer aided design tools; and
d) Testing the design at the actual environment.
11. In order to verify the exact nature of assessee’s activities, the
TPO also searched the web site of the tax payer and observed that
the assessee is basically carrying out the research and development
and engineering analysis with the aid of sophisticated labs/software
in various fields of engineering. He, therefore, rejected the
assessee’s TP study adopting the comparables who are in the filed
of development of computer software holding that they are
functionally different. He, therefore, proceeded to re-determine the
ALP by conducting the search on the Database ‘prowess’ for fresh
comparables. The search was made for business line ‘Technical
Consultancy and engineering services and Research &
Development’. Based on the said search, the TPO has short listed
the following eight companies :-
ITA Nos.789/B/10,
487, & 925/B/11
9
1) Alphageo India Ltd.
2) Biotech Consortium India Ltd.
3) Clinigene International Pvt. Ltd.
4) Geologging Industries Ltd.
5) Lurgi India Co. Ltd.
6) Mahindra Acres Consulting Engineering Ltd.
7) Sunil Hitech Engineers Ltd.
8) Vimta Labs Ltd.
12. Out of these eight companies, the TPO rejected Biotech
Consortium India Ltd., Clinigene International Pvt. Ltd.,
Geologging Industries Ltd., Mahindra Acres Consulting
Engineering Ltd. and Sunil Hitech Engineers Ltd., on the ground
that these companies have no forex earnings and hence are not
catering to overseas market segment. He, therefore, accepted only
the following three companies as comparables.
1) Alphageo India Ltd.
2) Lurgi India Co. Ltd.
3) Vimta Labs Ltd.
13. He found that the net profit of Vimta Labs was 61.7%,
Lurgi India Co. Ltd. was 18.9% and Alphangeo India Ltd. was
56.25% and the average margin of the comparables was 45.6% as
compared to that of the assessee at 16.26%. Therefore, he issued a
show cause notice to the assessee proposing to make the transfer
pricing adjustment u/s 92CA of the Act. The assessee however,
submitted its objections vide letters dated 20.11.2006 and
ITA Nos.789/B/10,
487, & 925/B/11
10
24.11.2006. The assessee vide letter dated 5.12.2006 filed a
summary of its objections stating that the comparables adopted by
the TPO did not satisfy the FAR analysis with that of the assessee.
The TPO, however held that the assessee is providing ‘Research
and Development’ services and not ‘computer software
development services’ as claimed by the assessee and that the
delivery model cannot be confused with the functions and that the
service agreements of the assessee with its affiliates as well as the
information available from the website do not speak of software
development and, therefore, the enterprises developing software
cannot be used as comparables. As regards the risk free
environment in which the assessee claimed to be working, he held
that the risk of success and failure is common to any R & D
undertaking and, therefore, there is no difference in the risk level
of the assessee and the comparables chosen by the TPO. As
regards the assessee’s contention that the assessee should be
considered as ITES company as it is so treated by NASSCOM, he
held that the comparable companies are to be identified on the
basis of the functions carried out by the assessee and not on the
basis of the category considered by NASSCOM.
ITA Nos.789/B/10,
487, & 925/B/11
11
14. Pursuant to the TPO’s direction, the assessee also had done a
fresh search with an emphasis primarily on the functions
performed i.e IT enabled engineering services and research and
development. It also considered the contemporaneously available
data in the data base. On the basis of the said search, the assessee
arrived at 10 comparables which are functionally similar to that of
the tax payer and are in the software industry. The TPO however
held that the assessee is again looking at only IT and ITES
companies i.e who are predominately rendering software services
and ITES, BPO services who are functionally dissimilar to that of
the tax payer. However, as some of the comparables offered by the
tax payer now, are having engineering services, the TPO accepted
the same as comparables along with those proposed by the TPO
and thereafter proceeded to determine the ALP by adopting the
TNMM as the most appropriate method. As regards the risk free
environment claimed by the assessee, he observed that the risk
prevailing on both the comparables and the assessee is identical.
The TPO then proceeded to determine the ALP and made the
adjustment of Rs.22,24,27,024/- u/s 92CA of the Act. Based on
the same, the AO also made the adjustment to the returned income
of the assessee.
ITA Nos.789/B/10,
487, & 925/B/11
12
15) Aggrieved, the assessee preferred an appeal before the
CIT(A) reiterating the submissions made by it before the AO. The
CIT(A) agreed with the comparables finally adopted by the TPO
and TP adjustment to the ALP but however directed the AO to
allow the working capital adjustment and depreciation adjustment
and to re-compute the total income of the assessee accordingly.
After making the said adjustments in the order giving effect to the
order of the CIT(A), there has been no addition to the total income
of the assessee. However on the adoption of the comparables i.e
Vimta Labs Ltd., Alphangeo India Ltd. and Lurgi India Co. Ltd.,
the assessee is in appeal before us. Similarly for the assessment
year 2005-06 also the assessee is in appeal before us against the
adoption of Vimta Labs and Alphangeo India Ltd. as comparables
for making the TP adjustments. For the assessment year 2006-07,
the assessee is aggrieved by the adoption of Vimta Labs Ltd., and
Celestial Labs Ltd., as comparables by the TPO and as confirmed
by the DRP.
16. The learned Sr. counsel for the assessee, Shri N.V
Venkataraman, while reiterating the assessee’s submissions made
before the authorities below for all the three years, submitted that
there are no additions made on account of TP adjustments for
ITA Nos.789/B/10,
487, & 925/B/11
13
assessment year 2004-05 and 2005-06 and, therefore, the grounds
are only on erroneous inclusion of certain comparables as these
comparables have been adopted by the TPO for the assessment
year 2006-07 also without giving any opportunity of hearing and
adjustment was made to the ALP. On the nature of assessee’s
activities, the learned counsel for the assessee submitted that the
assessee is exporting the computer programs, customized
electronic data and engineering analysis and designs. He
submitted that the TPO, has, without any basis completely
disregarded the detailed explanation provided by the assessee as
being involved in Software Development and not as ‘Research and
Development’ . According to the learned counsel for the assessee,
the assessee is a software development company and, therefore,
companies which are involved in the business of software
development only are to be considered as comparables for the
purposes of computing the ALP.
17. The learned DR however submitted that the assessee is
engaged in contract research and development activity and derives
income from foreign principals/associated enterprises and merely
because the result of such research and development is delivered to
its AE’s in customized electronic data, it would not make the
ITA Nos.789/B/10,
487, & 925/B/11
14
nature of services as software development. Thus according to
him, the TPO has rightly treated the assessee as engaged in
contract research and development, technical engineering services
and accordingly selected the relevant comparables.
18. So the primary and basic question before us is to determine
the nature of assessee’s activities as it would determine the
roadmap for making the search for and adopting of the
comparables.
19. Having heard both the parties and having considered their
rival contentions and the material on record, we find that the
assessee is a service provider for research and development in
various fields of engineering (including computer software) as
enumerated in the agreements between the assessee and its
associated enterprises reproduced in para 8 and 9 above and the
result of such research and development is being delivered to the
clients/associated enterprise in the form of customized computer
data through network,/internet. Thus, even as per the assessee’s
submissions, it is conducting the research and development
through its multi-disciplinary R&D centre JFWTC and its activities
are for several streams/areas including Information Technology.
ITA Nos.789/B/10,
487, & 925/B/11
15
Thus it can be seen that it is catering to nearly all of GE’s diverse
business worldwide touching nearly every scientific discipline
across the spectrum such as mechanical engineering, electronic and
electrical and metallurgy, catalysis and advanced chemistry,
polymer science and new synthetic materials, power electronics
etc. Therefore, as rightly held by the TPO, the assessee is not into
simple software development but is engaged in research and
development in technical and engineering services on contract
basis. Therefore, the TPO has rightly rejected the TP study
conducted by the assessee and has rightly proceeded to select his
own comparables in the field of Research and Development and
redetermine the ALP.
20. The next question to be considered by us is as to whether
the comparables adopted by the TPO are relevant and comparable
to the assessee. For assessment year 2004-05, the assessee’s
objection is to the adoption of Vimta Labs, Alphageo Labs, Lurgi
India Co. Ltd., while for the assessment year 2005-06 ad 2006-07,
the assessee’s objection is against the adoption of Celestial Labs
and Vimta Labs as comparables. But before us, the learned
counsel for the assessee has advanced arguments contesting the
adoption of Vimta Labs, Celestial Labs only, as they have resulted
ITA Nos.789/B/10,
487, & 925/B/11
16
in adjustments to the ALP for assessment year 2006-07. It is
submitted by the learned counsel for the assessee that in the show-
cause notice issued by the TPO, Vimta Labs and Celestial Labs did
not find place, but in the final TP order, these two companies have
been considered as comparables and their margins considered
which is in violation of principles of natural justice. He submitted
that the assessee has raised its objections before the DRP which
only confirmed the order of the AO holding that assessee’s
objection to these comparables were considered by the TPO in the
earlier assessment years. According to the ld. counsel for the
assessee, Vimta labs and Celestial Labs are not at all comparable
to the assessee for the following reasons :
1) They are diversified companies engaged in dissimilar
activities like earning income from franchisee model and
products.
2) No separate segment reporting is available in their annual
report and even otherwise also, their margins cannot be
adjusted to make them comparable with the assessee.
3) The assessee is working in risk free atmosphere, whereas
Vimta Labs and Celestial Labs are facing various risks that
cannot be quantified or adjusted.
21. The learned counsel for the assessee has drawn our attention
to the methods prescribed for determining the ALP in Rule 10B of
IT Rules and submitted that as per the TPO, TNMM method is
ITA Nos.789/B/10,
487, & 925/B/11
17
most appropriate method. He submitted that as provided under rule
10B(e) of Income-tax Rules, for computing the ALP under
TNMM, the TPO has to conduct FAR analysis i.e functions
performed taking into account the assets employed and risks
assumed and only after such an exercise, could a comparable be
selected by the TPO. He submitted that even if the assessee is to
be considered as a Research and Development company, the
comparables have to be of the same industry in which the assessee
is into the research and development i.e., the field of Engineering
and Technology. He submitted that both Vimta Labs and Celestial
Labs are into the research and development in the field of
pharmaceuticals which is entirely different from the field of
engineering and technology.
22. As far as adoption of Vimta Labs is concerned, he submitted
that the TPO has selected Vimta Labs for the assessment years
2004-05 and 2005-06 merely because at that time Vimta Labs was
classified in ‘Prowess’ database under the heading ‘Technical
consultancy and engineering services’ or ‘Research and
Development’. He submitted that for the assessment year 2006-07,
however, Vimta Labs was reclassified in the aforesaid database
itself as ‘Drugs, medicines and allied products’. He submitted that
ITA Nos.789/B/10,
487, & 925/B/11
18
there was no change in the business activities of Vimta Labs for
the assessment year 2006-07 as compared to the assessment years
2004-05 and 2005-06 and, therefore, its reclassification in the
database as a Drug Company for the assessment year 2006-07
shows that Vimta Labs was wrongly classified as ‘Technical
Consultancy and Engineering Services’ or ‘R & D’ for assessment
years 2004-05 & 2005-06. He further submitted that the
subsequent classification/reclassification continues till date which
also establishes that reclassification truly described the activities
carried out by Vimta Labs right from the assessment years 2004-
05 onwards and, therefore, for the assessment year 2006-07,
Vimta Labs did not appear in the search criteria but the TPO has
cherry picked Vimta Labs only because the same was selected in
the assessment years 2004-05 and 2005-06.
23. The learned counsel for the assessee further submitted that
even as per the FAR analysis, the Vimta Labs could not have been
selected as a comparable for the following reasons :
I) Functions Performed :
1) Vimta is a clinical trial company and is engaged in conducting
testing of new pharmaceutical drugs on humans and animals
to study the effects of drugs, side effects associated with
increasing doses, and, if possible, to gain early evidence on
their effectiveness.
ITA Nos.789/B/10,
487, & 925/B/11
19
2) Vimta Labs maintains a database of 20,000 healthy male and
female volunteers to conduct clinical trials.
3) It has so far conducted over 600 bio-availability and
bioequivalence studies and clinical trials involving more than
120 drugs.
4) It has a state of the art barrier maintained animal facility
designed to conduct experiments using rodents, rabbits and
beagle dogs.
5) It has entered the scheme of Clinical reference laboratory
services in 1999 and offers more than 600 laboratory tests for
clinical programs and also provides diagnostic services such
as lipid profile, diabetes, kidney, anemia, HIV and hepatitis
tests etc.,
6) It works on franchisee model;
7) It focuses on analytical studies to check water and food
quality, and on testing for effectiveness and drugs to meet the
requirements under the various standard organization, such as
Bureau of Indian Standards , FDA etc. and other statutory
agencies.
8) The services provided by Vimta Labs comprises of site
assessments, environmental audits, environmental impact
statements, risk assessments and waste management for
project evaluation to private and public corporations and
government agencies such as Ministry of Forest and
Environment. In view of the hazardous nature of carrying
out these assessments, the risk assumed is significantly high
which is also reflected in the pricing of these assessment
studies.
II Assets employed :
Vimta Labs has made significant investments in both
tangible and intangible assets and the asset/sale ratio for
Vimta Labs work out 2.89% as opposed to 0.99% for the
assessee.
ITA Nos.789/B/10,
487, & 925/B/11
20
III. Risks assumed :-
a) Entrepreneurial risk:- The assessee being a captive service
provider operates on a risk free model, whereas Vimta Labs is
entrepreneurial company and assumed significant risks.
b) Liability risk : Due to human involvement and life threatening
nature of the assessment and clinical research/trials, the risk
assumed by Vimta Labs is significantly high which is reflected in
the pricing for the fact that humans are involved in the clinical
trial/research. The learned counsel for the assessee has relied upon
various websites which are in public domain to demonstrate that
Vimta Labs is experimenting on humans and it has compensated
for the damage caused by its experiments on the humans.
c) Regulatory risks : Chemical trails industry is increasingly
being regulated and profitability of participants would also depend
upon regulatory changes.
24. In addition to the above, the learned counsel for the assessee
submitted that the TPO has himself adopted the filter of employee
cost being less than 25% as a filter for rejecting various companies
shortlisted by the assessee. He submitted that the TPO should
follow uniformly the same filter while searching for and adopting
the comparables. He submitted that Vimta Labs fails the
employee cost filter adopted by the TPO as employee cost of the
assessee is 32% in 2004-05, 38% in 2005-06 and 42% in 2006-07
as against the employee cost of Vimta Labs being 13% in 2004-05,
14% in 2005-06 and 16% in 2006-07. As the employee cost of
Vimta Labs is less than 25% in all the three assessment years,
ITA Nos.789/B/10,
487, & 925/B/11
21
according to the learned counsel for the assessee, it should be
excluded from the list of comparables.
25. As regards the adoption of Celestial Labs as a comparable,
the learned counsel for the assessee submitted that it is also
functionally different from the assessee because of the following
features :
a) Celestial Labs is into development and manufacture and
distribution of bio and IT products;
b) Development and manufacture of molecules and
enzymes ;
c) Clinical research and trial business;
d) On line portal for live ayurvedic consultation and
trading of herbal products – Sanjivini;
e) Contract manufacturing of pharmaceutical products
such as creams, lotions, tablets, syrups and capsules.;
f) SAP implementation services; and
g) It has already been licenced 55 herbal products for
manufacturing. Some of the products include Bioliv
syrup, Cel-digest syrup etc.
26. He submitted that it is evident from the annual report
of Celestial Labs for the assessment year 2006-07, that it is a
product driven company. He submitted that Mumbai bench of
this Tribunal in the case of Tevapharm Pvt. Ltd. Vs. ACIT in
ITA Nos.789/B/10,
487, & 925/B/11
22
ITA No. 6623 of 2011 has considered the fact that the activities
undertaken by the Celestial Labs are in the nature of providing
host of IT related services and some trading activity which is
not comparable to the assessee therein and, therefore, ought not
to be considered as a comparable even in this case. As regards
assets employed by Celestial Labs, the learned counsel for the
assessee submitted that –
a) It has invested significantly in assets and the
assets/sales ratio for Celestial Labs works out to be 1.56
as opposed to 0.96 for the assessee.
b) It also invested in developing new products in
intangible assets and its expenditure on new
development accounts for 33% of the total assets.
c) The Celestial Labs owns significant intangible assets
and has applied to protect the IPR by filing the
copyrights and patents for Celesuite, Vitiligo and
Multiple Cancer.
d) As per the website content, Celestial currently owns the
following intangible assets:-
Copy right/patent approval for different tools and
packages under informatics and bioinformatics
category.
e) New Drug Molecules applicable for Vitilogo, Psoriasis,
Accelerated wound healing, Anti wrinkles and Skin
tanning.
f) 32 herbal formulations in the different category are
under process and filing with patent office.
ITA Nos.789/B/10,
487, & 925/B/11
23
27. As far as risks assumed by Celestial Labs are concerned, the
learned counsel for the assessee submitted that Celestial is a
entrepreneurial company and assumes significant risks as opposed
to assessee which operates in a risk free model. He submitted that
being a product-company dealing in medical products, Celestial
bears significant product liability risks and is also subject to
clinical trials segment subject to same risks as Vimta Labs.
28. Thus, according to the learned counsel for the assessee, both
Vimta Labs and Celestial Labs should be excluded from the list of
comparables and if done so, the assessee’s margin would fall
within the ALP of the comparable companies or + 5% thereof and
no adjustment would be necessary.
29. The learned DR however, placed reliance upon the orders of
the authorities below and submitted that the CIT(A) in his order for
the assessment year 2004-05 has discussed at length the nature of
the activities of the assessee and the functions performed to hold
that the assessee was a service provider working on research and
development and also doing engineering analysis and the results
of which are captured/computerized and transferred through
electronic media, which are merely means of delivery to the AE.
ITA Nos.789/B/10,
487, & 925/B/11
24
30. As regards the adoption of Vimta Labs as a comparable, he
submitted that the assessee is into contract ‘Research and
Development’ as in the case of Vimta and Celestial Labs and,
therefore, they are comparable companies.
31. As regards the reliance by the learned counsel for the
assessee on the decision of the Tribunal in the case of Tevapharm
Pvt. Ltd. (cited Supra) for exclusion of Celestial Labs from the list
of comparables, the ld. DR submitted that the same is
distinguishable on facts as in the said case it was directed to be
excluded on the ground that Tevapharm was a pharmaceutical
company whereas Celestial was dealing with IT related services
where as in the case before us, the assessee was also dealing with
IT related services as well as engineering services. Hence,
according to the DR, even applying the decision of the Tribunal in
the case of Tevapharma, Celestial is comparable to the assessee on
the basis of its functions.
32. Having heard both the parties and having considered their
rival contentions and the material on record, we find that there is
no dispute as regards the most appropriate method to be adopted
ITA Nos.789/B/10,
487, & 925/B/11
25
for computing the ALP. The TNMM has been considered as the
most appropriate method. We have already held that the assessee
is engaged in the activity of research and development and
technical and engineering services. For determining the ALP under
the TNMM method, the FAR analysis is very essential as is
provided under Rule 10B of the Income-tax Rules. As per the
said provisions, it is essential to consider the functions performed;
assets employed and risks encountered by the assessee company as
well as the comparable companies before embarking upon the
determination of the ALP. So it is essential to consider the correct
nature of functions of the assessee to search for the comparables
which are engaged in the similar functions. It is also essential to
take a note of the dissimilarities between the functions performed
by the assessee and the comparable companies before adopting the
same as comparables and to make suitable adjustments for the said
dissimilarities wherever possible. As rightly pointed out by the
TPO and the CIT(A)/DRP for the relevant assessment years, the
assessee is not in the business of software development but it is in
the business of research and development in various fields of
engineering including the computer software. The outcome of the
research and development conducted by the assessee is delivered to
the customers/AE through electronic media. The mode of delivery
ITA Nos.789/B/10,
487, & 925/B/11
26
of result of research and development cannot determine the nature
of the functions/activities of the assessee. Therefore, the TPO was
right in conducting search on the data base ‘prowess’ using the
word ‘research and development’.
33. Now comes the question of selection of comparables. The
learned counsel for the assessee has forcefully argued that even if
the assessee is to be considered a Research and Development
company, then the comparables have to be of the same industry in
which the assessee is doing research and development. If this
argument of the learned counsel for assessee is accepted, then the
comparables selected/shortlisted by the assessee from the ITES
Industry are also liable to be rejected as they are not from the same
industry. Thus, the argument of the learned counsel for the assessee
that the functions are synonymous with or analogous to the
industry and the comparable companies have to be from the same
industry for comparability analysis under TNMM is not in tune
with the principles enunciated by the guidelines of OECD or
United Nations Manual which advocate that under TNMM only
broad functional and product comparability is to be considered as
net margins are less influenced by differences in products and
functions.
ITA Nos.789/B/10,
487, & 925/B/11
27
34. As per the principles of comparability, controlled and
uncontrolled transactions are regarded as comparable if their
economically relevant attributes and the circumstances surrounding
them are sufficiently similar to provide a reliable measure of an
arm’s length result. However, in reality, two transactions are
seldom completely alike. To be comparable does not mean that the
two transactions are necessarily identical, but that either none of
the differences between them could materially affect the arm’s
length price or, where such material differences exist, then
reasonably accurate adjustments can be made to eliminate their
effect. It is important to note that the type and attributes of the
comparables available in a given situation typically determine the
most appropriate transfer pricing method. In general, closely
comparable products/services are required if the comparable
uncontrolled price (“CUP”) method is used for arms’ length
pricing; the resale price, cost-plus methods generally require a
lesser degree of products or services comparability and may be
appropriate if functional comparables are available. The TNMM
requires only broad functional and product/services comparability.
In many instances, it will be possible to use ‘imperfect’
comparables, e.g., comparables from another industry sector,
ITA Nos.789/B/10,
487, & 925/B/11
28
possibly adjusted to eliminate or reduce the differences between
them and the controlled transaction. Hence, the contention of the
assessee that the comparables have to be of R & D companies from
the same industry is not appropriate for TNMM.
34. As far as adoption of Vimta Labs as a comparable is
concerned, the TPO’s stand is that Vimta Labs is a leading
provider of multi-disciplinary contract research and testing
services. So also, the assessee has a multi-disciplinary Research &
Development Centre. Also, the company’s functions, i.e., research
and development are similar to that of the tax payer in all respects.
35. As detailed in earlier paras, the objection of the assessee to
the adoption of Vimta Labs as a comparable can be summarized as
under :-
(i) It was selected as a comparable by the TPO in A.Y 2004-05
merely because it was classified under ‘Technical Consultancy and
Engineering Services’ or Research and Development’ in the
database. However, it was reclassified as ‘Drugs, medicines and
allied products’ for A.Y 2006-07. Hence, it was selected as a
comparable by the TPO only because of wrong classification in the
earlier years.
ITA Nos.789/B/10,
487, & 925/B/11
29
The issue of regarding wrong classification of the company
in the database has been raised by the assessee for the first
time before us. There is no mention of the same in any of
the documents in our record. Whether the change in
classification is due to wrong classification in the earlier
years or whether there was a change in functional profile
necessitating such a change in classification needs to be
examined.
(ii) As per the FAR analysis, it cannot be selected as a
comparable. It is a clinical trial company engaged in
testing of new pharmaceutical drugs and works on
franchisee model. It has significant investments in tangible
and intangible assets and the assets/sales ratio is
substantially higher. Being an entrepreneurial company, it
assumes significant risks and also has high liability risk due
to human involvement and life threatening nature of the
clinical trials.
The assessee’s contention that it is a clinical trial company
is only partly true. As the TPO has mentioned, it is into
multi-disciplinary research services. It provides contract
and research testing services in other areas like analytical
testing and environment monitoring and impact assessment.
While the assessee has totally ignored these activities of the
company, the TPO has not examined as to whether these
services are significant enough to consider the activity of
ITA Nos.789/B/10,
487, & 925/B/11
30
this company as ‘technical consultancy & engineering
services and R & D.
The contention that the company has significant
investments in both tangible and intangible assets does not,
by itself, make the company dissimilar. After all as noted
by the TPO, even the R&D centre of the assessee is
reported to have filed for more than 185 patents and has
been granted quite a few of them. Unless it is analyzed as
to how these intangible assets are valued, it may not be
appropriate to conclude that the company is dissimilar in
this regard.
(iii) Also, this company fails the filter adopted by the TPO,
viz., employee cost less than 25%. As the employee cost for
the company is less than 25% in all the three years under
consideration, it should be excluded from the list of
comparables.
This contention of the assessee that Vimta Labs fails the
filter of employee cost filter has been advanced for the first
time before us. This point has not been examined by the
AO and the CIT(A). In fact both the TPO and the CIT(A)
have recorded a finding that the assessee has not questioned
the search process at all. Hence, this claim that the assessee
fails the employee cost filter for all the three years needs to
be examined.
ITA Nos.789/B/10,
487, & 925/B/11
31
(iv) Assessee is working in a risk free atmosphere while
Vimta Labs is facing lot of clinical test failure risk and also
regulatory risks.
It is the contention of the assessee that it is totally risk free
and all the substantive risks are borne by the AE.
Identification of risk and the party who bears such risks are
important steps in comparability analysis. The conduct of
the parties is key to determine whether the actual allocation
of risk conforms to contractual risk allocation. Allocation
of risk depends upon ability of the parties to the transaction
to exercise control over risk. Core functions, key
responsibilities, key decision making and level of individual
responsibility for the key decisions are important factors to
identify the party which has control over the risks.
36. The notion that risk can be controlled remotely by the
parent company and that the Indian subsidiary engaged in core
functions, such as carrying out research and development activities
or providing services are risk free entities is something which
needs to be demonstrated by the assessee. The conventional
wisdom is that the core function of R & D services are located in
India, which in turn require important strategic decisions by
management and employees of Indian subsidiaries or related party
to design the direction of R&D activities or providing services and
ITA Nos.789/B/10,
487, & 925/B/11
32
control over the operational and other risks. In these
circumstances, the ability of the parent company to exercise control
over the risk – remotely and from a place where core functions of
R & D and services are not located – is very limited. Under these
circumstances, the claim of the assessee that it is totally risk free is
not acceptable. However, the relative risk profile of the
comparable company, particularly on the factors of human
involvement in the clinical trails needs to be evaluated and a
determination made whether such differences in risk needs to be
adjusted or whether such risks are not amenable for adjustment at
all, as claimed by the assessee. In view of all the above, the issue
of comparability of Vimta Labs is remanded back to the AO/TPO
with a direction that the comparability may be analyzed in the light
of the observations made above.
37. Now let us examine the correctness or otherwise of the
comparables adopted by the TPO for all the three assessment years.
Though the assessee has not specifically advanced arguments for
exclusion of the comparables raised in its grounds of appeal for the
assessment year 2004-05 and 2005-06, it is necessary to consider
the appropriateness of the action of the TPO for the said years also
as the detailed reasoning for the said selection/ adoption are
ITA Nos.789/B/10,
487, & 925/B/11
33
mentioned therein. For the purposes of convenience and ease of
comparison the details of the final list of comparables adopted by
the TPO and their margins for the three assessment years are
tabulated hereunder :
2004-05 2005-06 2006-07
1) Alphangeo India Ltd. 56.25 26.73 --
2) Vimta Labs Ltd., 61.7 75.93 57.80
3) Lurgi Labs Ltd., 18.9 -6.90 --
4) Celestial Labs Ltd., -- -- 48.15
5) Geometric Ltd., 29.39 20.34 6.70
6) Tata Elxi 20.79 24.35 27.65
7) Sasken Communication
Tech Ltd, 13.13 -- 13.90
8) Infotech Enterprises Ltd., 19.12 -- --
9) Rolta India Ltd., 28.06 -- --
10) Zigma Software Ltd. 16.47 14.42 --
-------------------------------------------------------------------------
Arithmetic mean 29.37 25.81 30.84
Assessee’s margins 16.26% 14.25% 16.28%
---------------------------------------------------------------------------
38. From the above table, it can be seen that the comparables
uniformly adopted/offered by both assessee and the TPO for all the
three years are Tata Elxi and Geometric Ltd., while Sasken
Communication Tech. Ltd., is adopted for 2004-05 and 2006-07
and Zigma Software is adopted for 2004-05 and 2005-06.
40. The comparables proposed and retained by the TPO are
(1) Vimta Labs for all the three years, (2) Alphangeo India Ltd., for
ITA Nos.789/B/10,
487, & 925/B/11
34
AYs 2004-05 and 2005-06 (3) Lurgi Labs Ltd., for AYs 2004-05
and 2005-06 and 4) Celestial Labs Ltd. for AY 2006-07.
41. It is also to be seen that the assessee has objected to the
adoption of Alphangeo and Vimta Labs in both AYs 2004-05 and
2005-06, while it objected to adoption of Lurgi Labs in AY 2004-
05 only while no objection was raised for its adoption in AY 2005-
06 either before the CIT(A) or before this Tribunal. This is
probably because Lurgi Labs incurred loss during AY 2005-06
which when considered by the TPO has resulted in lower
arithmetic mean benefitted the assessee.
42. Further, we also had an opportunity to go through the TP
order and assessee’s objection to the TPO for AY 2008-09 the
copies of which are filed by the assessee before us in connection
with the other issue arising in the appeal for A.Y 2006-07 i.e., the
TP adjustment made towards interest on external commercial
borrowing. We find that for the A.Y 2008-09 also, the TPO
proposed to adopt Vimta Labs and Celestial Bio Labs Ltd. as
comparables with margins of 18% and 88% respectively. From the
reply of the assessee to the show cause notice of the TPO
proposing TP adjustments, we find that the assessee had raised
ITA Nos.789/B/10,
487, & 925/B/11
35
objections to Celestial Labs and Engineers India Ltd. and Oil Field
Instrumentation India Ltd but did not raise any objection to
adoption of Vimta Labs as a comparable for A.Y 2008-09, which
goes to show that it has accepted Vimta Labs as a comparable for
the relevant A.Y probably because its margin was only 18% for the
relevant A.Y. The Celestial Labs was retained by the TPO while
the other two companies were excluded.
43. From the above details, it can be seen that the assessee is not
adopting a uniform approach for objecting to the comparables
proposed by the TPO. As regards Lugri Labs, it appeals against its
adoption in A.Y 2004-05 while it accepts the decision of TPO for
A.Y 2005-06. As regards Vimta Labs, it appeals against its
adoption in A.Ys 2004-05, 2005-06, & 2006-07 while it does not
even object to the proposal of TPO for its adoption in A.Y 2008-
09. Such cherry picking by the assessee cannot be allowed.
Uniformity and consistently in approach is essential for both the
Revenue as well as the assessee alike unless the circumstances
warrant otherwise. The objections of the assessee to Lurgi Labs
and Vimta Labs was that they are functionally different. There is
evidently no change in the functional activities of Lurgi in A.Y
2004-05 and 2005-06. Likewise Vimta Labs also has been in
ITA Nos.789/B/10,
487, & 925/B/11
36
Pharmaceutical industry doing research and development in all the
relevant AYs. In fact, it is the case of the assessee that from A.Y
2006-07, it has been reclassified as ‘Drugs, medicines and allied
products’ and hence is not comparable at all. Then it is not clear as
to how it can be adopted as a comparable for A.Y 2008-09 when
its functions are no different from A.Y 2006-07.
44. In view of the above observations and also inconsistencies in
the approach of the assessee and also in view of the fact that the
assessee was not given an opportunity of hearing for A.Y 2006-07
against adoption of Vimta Labs as a comparable and also in view
assessee’s submissions that there has been a change in the
classification of the Vimta Labs in the database in AY 2006-07,
and also additional evidence filed before us with regard to the risks
encountered by Vimta Labs and Celestial Labs, we deem it fit and
proper to remand the issue to the file of the AO/TPO for
reconsideration of the issue de novo for all the A.Ys. The AO/TPO
shall consider the objections of the assessee in detail and shall give
a fair opportunity of hearing to the assessee before completing the
proceedings in accordance with law.
ITA Nos.789/B/10,
487, & 925/B/11
37
45. In the assessment year 2004-05, the assessee has also raised
grounds No.13 to 15 against the order of the CIT(A) confirming
the order of the AO as regards the computation of deduction u/s
10A of the Income-tax Act.
46. The brief facts of the case are that for the assessment year
2004-05, the assessee earned a profit of Rs.10,90,56,643/- from
10A undertaking and incurred a loss of Rs.1,90,02,182/- from
non-10A business activities. Further, the assessee also had brought
forward losses of 10A undertaking for the assessment year 2002-03
and 2003-04 aggregating to Rs.22,95,47,384/-. In its return of
income for the assessment year 2004-05, the assessee computed its
total income by first claiming the deduction of profit u/s 10A of the
undertaking at Rs.10,90,54,643/- and thereafter the set off of
carried forward losses of non 10A business activities of
Rs.1,90,02,182/- and also the brought forward losses of 10A
undertaking at Rs.22,95,47,384/-. The Assessing Officer however
computed the deduction u/s 10A of the Income-tax Act after first
reducing the profits of the 10A undertaking by brought forward
losses of 10A undertaking from the earlier years and thereafter
further reduced the income by the losses from the non-10A
undertaking and thereafter arrived at ‘Nil’ deduction u/s 10A of the
ITA Nos.789/B/10,
487, & 925/B/11
38
Act. Against the said computation, the assessee filed an appeal
before the CIT(A) who confirmed the action of the AO and the
assessee is in second appeal before us.
47. The learned counsel for the assessee submitted that the 10A
deduction/exemption should be allowed from its source i.e 10A
unit itself and accordingly the said deduction/exemption should be
allowed at the time of calculation of business income itself. Thus
according to him, 10A profit will not at all enter the computation
of business income and the same should be allowed before arriving
at the gross total income and before setting off of losses, whether
10A losses or non 10A losses. He submitted that in the case of the
assessee, if sec. 10A deduction/exemption is allowed at source
itself, then there will be no business profit left against which the
loss of non-10A units and brought forward losses of 10A units
can be set off and, therefore, the said losses will be eligible to be
carried forward to the subsequent years. In support of its above
contentions, the assessee has placed reliance upon the following
decisions :
1) CIT Vs. Yokogawa India in ITA No.1388/2011 (Kar, HC)
2) Hindustan Uniliver Vs. DCIT, (2010), 325 ITR 102 (Bom)
3) CIT Vs. TEI Technologies in ITA No.4025/2012 (Del, HC)
ITA Nos.789/B/10,
487, & 925/B/11
39
48. The learned DR, however supported the orders of the
authorities below.
49. Having heard both the parties and having considered their
rival contentions, we find that this issue is covered by the decision of
the Hon’ble High Court of Karnataka in the case of Yokogawa India
(cited Supra), wherein it has been held that for computing the
deduction u/s 10A of the Act, the profit of eligible units have to be
deducted at source and do not enter into the computation of income
and as a consequence of which, the losses suffered by non eligible
units cannot be set off against the profits of eligible units. Further it
has been held that the depreciation and business loss of eligible units
relating to the assessment year 2000-01 onwards is eligible for set
off and carry forward for set off against the income post tax holiday
as per the amended provision of sec. 10A(vi) amended with
retrospective effect from 1/4/2001. Taking note of the above
amendments, the Hon’ble High Court of Karnataka has held that it is
necessary that notional computation of business income and
depreciation should be made for each year of the tax holiday period
and such loss is eligible to be carried forward in the post tax holiday
period and, therefore, for the relevant assessment year, the question
of setting off of the loss of current years or the previous brought
ITA Nos.789/B/10,
487, & 925/B/11
40
forward business losses of units against the profits of 10A unit does
not arise. This issue is also covered by the other decisions relied
upon by the learned counsel for the assessee.
50. Respectfully following the decision of the jurisdictional
High court, we hold that the losses of non 10A units cannot be set off
against the profits of 10A unit and the brought forward losses of 10A
units for the assessment years 2002-03, 2003-04 cannot be set off
against the current years 10A profits but can be set off against the
profits of the post tax holiday period. This ground of appeal is
accordingly allowed.
51. In the result, the appeal for the assessment year 2004-05 is
allowed.
52. For the assessment year 2005-06, the only issue is with
regard to the transfer pricing adjustment made on account of research
and development activity carried on by the assessee and as the issue
has already been remanded to the file of the AO/TPO in our order for
the assessment year 2004-05, this ground of appeal of the assessee is
also remanded to the AO/TPO for de novo consideration.
ITA Nos.789/B/10,
487, & 925/B/11
41
53. For the A.Y 2006-07, in addition to the above, TP
adjustment to the ALP on account of Research and Development
activity, the assessee has also raised ground of appeal No.4 against
the order of the Assessing Officer making TP adjustment to the ALP
on account of interest on external commercial borrowings.
54. The brief facts of the case are that the assessee had obtained
two commercial borrowings from its AE’s (GE India & Pacific
Mauritius Ltd.) These were obtained under long term loan
agreements entered in 2001 and interest rates of such ECBs were
fixed @ 7.5% and 8.49% which was determined based on business
and economic circumstances at the time of entering into loan
agreement and these ECBs were not renegotiated on a year to year
basis. According to the assessee, the interest rates and the loan
agreements were in accordance with ECB guidelines issued by the
Government of India. The AO made a reference to the TPO u/s
92CA of the Income-tax Act for determination of the ALP of interest
on ECB. The TPO made the adjustments to the ALP on account of
interest on ECB and the AO proposed the addition in the draft
assessment order. The assessee raised objections before the DRP.
DRP, however, confirmed the draft assessment order and the
assessee is in second appeal before us.
ITA Nos.789/B/10,
487, & 925/B/11
42
55. It is submitted by the learned counsel for the assessee that
the interest rates of these borrowings were consistently accepted by
the Revenue in the earlier assessment years i.e 2002-03, 2003-04 and
2004-05, 2005-06 and also for the subsequent assessment years 2008-
09. He submitted that for the assessment year 2008-09, this issue was
specially raised by the TPO vide show cause notice dated
11/10/2011 but no TP adjustment made after considering the
submissions of the assessee dated 27/10/2011. In support of his
contentions, the learned counsel for the assessee has filed the copies
of the show cause notice of the TPO, the assessee’s submissions in
response to the same and also the TPO’s order for the assessment
year 2008-09. In addition to the above evidence and in support of its
contentions that the interest rates should be determined based on the
interest rates prevailing at the time of availing the loan, the learned
counsel for the assessee has placed reliance upon the decision of the
Delhi ITAT in the case of ITO Vs. Maharishi Solar Technology Pvt.
Ltd. in ITA No.4561 and 4393 of 2009. Thus, the learned AR prayed
that the addition relating to the above adjustment may be deleted.
56. The learned DR, on the other hand, supported the orders of
the authorities below and submitted that for the earlier assessment
ITA Nos.789/B/10,
487, & 925/B/11
43
years, the TPO has not examined the issue at large/length and,
therefore, it cannot be said that the issue has been decided on merits
in favour of the assessee. In support of his contentions regarding the
interest rate on ECB to be adopted for the relevant A.Y, he
submitted that two loans or external commercial borrowings were
between two cross border entities and, therefore, resulted in an
international transaction and each transaction has to be considered
every year whether the same is at ALP as the rate of interest on such
loans is integral part of determination of ALP. In support of his
contention, he placed reliance upon the decision of the Delhi Bench
of the Tribunal in the case of Perot Systems TSI (India) Ltd. Vs.
DCIT reported in (2010) 5 ITR 106.
57. Having heard both the parties and having considered their
rival contentions, we find that two ECB loans have been obtained by
the assessee in the year 2000-01 at the fixed rate of interest at 7.5%
and 8.49% respectively. As rightly submitted by the learned counsel
for the assessee, the interest rate is depending upon the credit rating
of the borrowings and also on the prices and economic conditions
prevailing at the time of advancing the loan. The assessee has
obtained the loans in the year 2001 and the issue has been considered
by the TPO for the assessment years 2004-05 and 2005-06 and also
ITA Nos.789/B/10,
487, & 925/B/11
44
for the assessment year 2008-09. After considering the assessee’s
submissions, the TPO accepted the rate of interest fixed in the loan
agreements. In view of rules of uniformity and consistency we are of
the opinion that the same approach is to be adopted this year also.
58. In view of the above, as the Assessing Officer for the
assessment year 2002-03 onwards up to the assessment year 2008-09
except for the assessment year 2006-07 has accepted the rate of
interest as fixed in the loan agreement, we hold that the TP
adjustment on account of the interest on external commercial
borrowings for this assessment year is not called for.
59. In the result, the assessee’s ground of appeal No.4 for the
assessment year 2006-07 is allowed.
60. In addition to the above, the assessee has also raised ground
No.5 against exclusions/deduction of telecommunication expenses of
Rs.3,25,98,610/- from export turnover and travelling expenses
incurred in foreign currency of Rs.90,92,976/- from the export
turnover but not making the corresponding reduction from the total
turnover for the purpose of computation of deduction u/s 10A of the
Income-tax Act. We find that this issue is now covered in favour of
the assessee by the decision of jurisdictional high court in the case of
ITA Nos.789/B/10,
487, & 925/B/11
45
Tata Elxi Pvt. Ltd., wherein it has been held when any expenditure is
reduced from the export turnover, then the same should also be
reduced from the total turnover for the purposes of computation of
deduction u/s 10A of the Income-tax Act. Therefore, AO is directed
accordingly.
61. In the result, the assessee’s appeals are allowed for
statistical purposes.
Order pronounced in the open court on 31st December, 2012.
Sd/- Sd/-
(JASON P BOAZ) (P. MADHAVI DEVI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Vms
Bangalore
Dated : 31st December, 2012.
Copy to :
1. The Assessee
2. The Revenue
3.The CIT concerned.
4.The CIT(A) concerned.
5.DR
6.GF
By order
+ Sr. Private Secretary, ITAT,
Bangalore.