TMI Blog2017 (8) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... in an area which is otherwise also highly subjective and vague. Celestial Labs Ltd. correctly directed for its exclusion on the ground that the said company was engaged in providing host of information technology related services Disregarding the claim of the assessee with regard to the software licence fee claimed as revenue expenditure - Held that:- It is noted by us that though objection was raised by the assessee in this regard, however, the Dispute Resolution Panel has not adjudicated this issue inadvertently. Therefore, we send grounds 3 and 4 back to the file of the Dispute Resolution Panel for its adjudication afresh. It was submitted by the learned counsel that identical issue has already been decided by the Tribunal in the assessment year 2008-09. The assessee is permitted to raise all the legal and factual issues before the Dispute Resolution Panel and may also submit the order of the Tribunal before the Dispute Resolution Panel for its consideration. The Dispute Resolution Panel shall decide this issue afresh - I. T. A. Nos. 2251 and 2085/Mum/2014 - - - Dated:- 3-5-2017 - C. N. Prasad (Judicial Member) And Ashwani Taneja (Accountant Member) For the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing different financial years. In view of these submissions, he requested for reversing the order of the Dispute Resolution Panel and requested for including this company as part of comparables. 5. Similarly, with regard to the other company, viz. Celestial Labs Ltd., it was submitted that the Dispute Resolution Panel has wrongly directed for its exclusion on the ground that the said company was engaged in providing host of information technology related services. Reliance was placed on the following decisions of the Tribunal wherein it was held that the said company was not comparable to a company engaged in providing information technology related services : (i) Hewlett Packard (India) Software Operation (P.) Ltd. v. Deputy CIT [2016] 67 taxmann.com 309 (Bang-Trib) (ii) Core Objects India (P.) Ltd. v. ITO [2016] 72 taxmann.com 53 (Bang.Trib) (iii) Interwoven Software Services India (P.) Ltd. v. Deputy CIT [2016] 67 taxmann.com 361 (Bang Trib) (iv) Textron India (P.) Ltd. v. Deputy CIT [2016] 72 taxmann.com 307 (Bang Trib) It was thus submitted that the said company is very much comparable to the assessee-company, and therefore, it should not have been directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Tribunal in the assessee's own case for the assessment years 2007-08 and 2008-09 should be followed in this year also. Thus, the order of the Dispute Resolution Panel should be upheld. 9. We have considered the submissions made by both the sides and also gone through the orders passed by the lower authorities and by the Tribunal for the earlier years. We shall deal with both the comparables hereunder : Pfizer Ltd : 10. In the case of Pfizer Ltd., it has been held by the Dispute Resolution Panel that the related party transactions of the service segment of the said company are approximately to the tune of 95.30 per cent. The learned Departmental representative was not able to dispute this factual submission when the financial statements of the said company were shown to him. Therefore, we find that the Dispute Resolution Panel's decision should be upheld on this reason, itself. 11. However, we shall also deal with the other argument taken by the Dispute Resolution Panel, i.e. different accounting period followed by the said company. In this regard, we shall first take support from the judgment of the hon'ble Bombay High Court in the case of CIT v. P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the above it is clear that the hon'ble High Court has clearly laid down that in view of the provisions of rule 10B(4) of the Income-tax Rules, 1962, the accounting period of the comparable company should be the same with that of the assessee-company. There is no need to mention that the judgment of the hon'ble jurisdictional High Court is binding upon us. However, the learned Departmental representative has relied upon the decision in the case of Pangea3 and Legal Database Systems P. Ltd. (supra) wherein it is claimed that the company having a different accounting period can be included in the list of comparables. Perusal of the said decision clarifies that the understanding of the learned Departmental representative is not complete and correct. It is noted that the Bench has given its view in a highly qualified and restricted manner. It was clarified that a company can be taken as part of comparables only when the quarterly data is also available. In the facts of the case before us, it is noted that the accounting period of Pfizer Ltd. is ending on 30th November. Therefore, there should be availability of data from December 1, 2008 to March 31, 2009 and also from Decemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abs Ltd. an ISO 9001-2000 company working in this space of Bio informatics and Gio-Technology. The goal is to become a primary market place for the herbal products providing quality products to the customers and industrial community. This is an ayurvedic portal dedicated to B2B and C market with online live consulting with our ayurvedic consultants. It provides excellent platform for trading of herbal products, with identification of raw herbs, scientific data, market and trade data, monographs, policy, laws, good manufacturing practices, DNA finger printing etc. It facilitates contacts with suppliers, manufacturers and dealers of Herbal Pharma industry. The activities undertaken Celestial Labs are in the nature of providing host of information technology related services and some trading activity which is not comparable to the assessee. Hence it is clear that it is not comparable to the functional profile of the company and accordingly ought not to be considered a comparable. The learned Departmental representative however drew our attention to page 389 of the paper book which is an extract from the directors report which reads as follows : 'The company has deve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e plea of the assessee in this regard. 13. Our attention was also drawn on the order passed by the Transfer Pricing Officer wherein it has been mentioned that functional profile of the assessee as well as comparable companies are the same as was there in the earlier years. Further, our attention was drawn on the financial statements of the said company wherein it has been mentioned in its profit and loss account that it derives income from its sale of products and services. Further, Note No. 12 of Notes to Accounts mentions that the said company's primary business segment is software development and services. No other contradictory evidence is in the possession of the learned Departmental representative to contradict these facts. Therefore, we have no option but to follow the view taken by the Tribunal for the assessment years 2007-08 and 2008-09. Thus, we find that no interference is called for in the order of the Dispute Resolution Panel and, therefore, the same is upheld. Therefore, the appeal filed by the Revenue is hereby dismissed. 14. Now we shall take up assessee's appeal in I. T. A. No. 2251/Mum/2014, filed on the following grounds : 1. On the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as raised by the assessee in this regard. During the course of hearing both the parties jointly stated that this issue should go back to the Dispute Resolution Panel for its proper adjudication. 17. It is noted by us that though objection was raised by the assessee in this regard, however, the Dispute Resolution Panel has not adjudicated this issue inadvertently. Therefore, we send grounds 3 and 4 back to the file of the Dispute Resolution Panel for its adjudication afresh. It was submitted by the learned counsel that identical issue has already been decided by the Tribunal in the assessment year 2008-09. The assessee is permitted to raise all the legal and factual issues before the Dispute Resolution Panel and may also submit the order of the Tribunal before the Dispute Resolution Panel for its consideration. The Dispute Resolution Panel shall decide this issue afresh after taking into account the entire material as may be placed on record by the assessee. These grounds may be treated as allowed, for statistical purpose. 18. As a result, the appeal filed by the assessee is treated as allowed, for statistical purpose. 19. In the result, the appeal of the Revenue is dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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