TMI Blog2019 (10) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... rcle 12 (4), Bangalore under section 143 (3) read with 144C of the Act, for assessment year 2006-07 on following grounds of appeal: The grounds stated hereunder are independent of, and without prejudice to one another. The Appellant submits as under: 1.Assessment and reference to Transfer Pricing Officer are bad in law a) The final assessment order issued by the Deputy Commissioner of Income-tax, Circle 12(4),DCIT' or 'AO b) is bad on facts and in law, and is in violation of the principles of natural justice. Without prejudice to the above, the order issued by the AO is bad in law insofar as the fact that the AO did not issue to Telelogic India Private Limited (`the Appellant or 'the Company'), a show cause notice, as per proviso to section 92C(3) of the Income-tax Act, 1961 ['the Act']. c) The AO has erred in law in making a reference to the Deputy Commissioner of Income Tax - Transfer Pricing - V [`TP0'], inter alia, since he has not recorded an opinion that any of the conditions in section 92C(3) of the Act, were satisfied in the instant ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sly erred on facts in arbitrarily rejecting companies having IT and ITeS revenues less than 75% of total operating revenue and inconsistently applying such filters, without considering the specific segmental results. h) The AO/TPO erred on facts in arbitrarily rejecting companies having onsite revenues more than 75% of the export turnover, with respect to the comparability analysis for IT segment. i) The AO/ TPO erred in rejecting companies having employee cost less than 25% of total sales, with respect to the comparability analysis for IT segment. j) The AO/TPO also erred on facts in arbitrarily rejecting companies based on their financial results without considering the functional comparability. k) The AO/TPO erred on facts and in law in considering a set, of 'secret data', i.e. data which was not available in public domain, in arriving at a fresh set of companies using his power under section 133(6), which is grossly unjustified. l) The AO/TPO also erred on facts and in law in excluding the foreign exchange gain or loss while calculating the net margins of the comparable compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign travel other expenses amounting to ₹ 3,608,208; telecommunication expenses amounting to ₹ 2,864,615; and asset insurance expenses of ₹ 73,800 only from the export turnover without correspondingly reducing the said expenses from the total turnover. 8. Disallowance of amounts paid to hotels On the facts and in the circumstances of the case, the learned AO has erred in disallowing the amounts paid to hotels of ₹ 215,579 towards room hire charges and food expenses, on the ground that no tax has been deducted on the same. 9.Set off of brought forward losses of earlier years On the facts and in the circumstances of the case, the learned AO is to be directed to allow set off of brought forward losses against the taxable income of the subject assessment year in case the additions/ disallowances made in earlier years' assessment orders are deleted by the appellate authorities. 10 Short grant of credit for Tax Deducted at Source (`TDS') The learned AO has erred in granting short credit of TDS amounting to ₹ 43,686 inspite of clear d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its return of income on 25/10/07 declaring loss of ₹ 32,06,615/- after claiming deduction under section 10A of the Act amounting to ₹ 2,76,11,149/-. The case was selected for scrutiny, and notices under section 143 (2) was issued to assessee, in response to which representative of assessee appeared. It was observed that assessee claimed deduction under section 10A of the Act, and reduced fright, telecommunication expenses, insurance, foreign travel, other expenses amounting to ₹ 65,46,623/- was disallowed. 2.1 Further, from details filed, Ld.AO that assessee had international transaction with its associated enterprises exceeding ₹ 15 crores and accordingly reference under section 92CA, was made to transfer pricing officer. Ld.TPO upon receipt of reference called upon assessee to file economic details regarding international transactions entered into by it with its AE. Ld.TPO observed that assessee was incorporated in India as wholly owned subsidiary of Telelogic AB, Sweden. It has been observed that assessee is engaged in rendering software development services and global support business, telecasting and g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B2 K Corp.Pvt.Ltd. 4 BNR Udyog Ltd 5 CMC Limited., 6 Cosmic Global Ltd. 7 Datamatics Technologies Ltd., 8 Firstsources Solutons Ltd. 9 Fortune Infotech Ltd., 10 Galaxy Commercials Ltd., 11 HCL Technologies Ltd. 12 KPIT Cummins Global Business Solutions Ltd. 13 MCS Limited., 14 Mapl E-solutions Ltd 15 Mphasis Ltd., 16 NIIT Smartserve Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Servics Ltd., 5.07% 12 Eclerx Services Ltd., 89.33% 13 Flextronics Software Systems Ltd., 8.62% 14 Genesys International Corporation 13.35% 15 HCL Comnet Systems Services Ltd., 44.99% 16 ICRA Techno Analytics Ltd., 12.24% 17 Informed Technologies Ltd., 35.56% 18 Infosys BPO Ltd., 28.78% 19 I -Service India Pvt.Ltd 49.47% 20 Maple E-Solutions Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., 11 FCS Software Solutions Ltd., 12 Geomeric Software SolutinsCo.Ltd., 13 Goldstone Technologies Ltd., 14 HCL Technologies Ltd., 15 Helios Matheson Information Technology Ltd., 16 Hexaware Technologies Ltd., 17 ICSA (India) Ltd., 18 Infosys Technologies Ltd., 19 Infotech Enteprises Ltd 20 Intertec Communications Ltd., 21 KALS Information Systems Ltd., 22 KPIT Cummins Infosystem Ltd., 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49 V K Softech Ltd., 50 V M Soft Tech Ltd., 51 Vama Industries Ltd., 52 Visesh Infotecnics Ltd., 53 Visualsoft Technologies Ltd., 54 Wipro Ltd., 55 Zensar Technologies Ltd., Assessee thus held its transaction to be at arms length price. Ld.TPO however applied various filters and is finalised a new set of 26 comparables as under, with an average margin of 25.14% (before working capital): Sl.No. Name of the company 1 Accel Transmatic Ltd.(Seg.) 21.11% 2 Avani Cimcon Technologies Ltd.(Seg.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Seg.) 15.07% 22 Sasken Communication Technologies Ltd.(Seg.) 22.16% 23 SIP Technologies Exports Ltd., 13.90% 24 Tata Elxsi Ltd.(seg.) 26.51% 25 Thirdware Solutions Ltd., 25.12% 26 Wipro Ltd. (Seg.) 33.65% Total 25.14% It has been submitted that Ld.TPO denied working capital adjustment, as assessee did not provide segment wise breakup of creditors debtors etc., and also excluded foreign exchange gain/loss from operating revenue. He thus proposed adjustment of ₹ 1,46,97,412/-. 4. Aggrieved by proposed adjustment, assessee filed objection before DRP. DRP after de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Balance Payable 58,78,782 Add: Interest u/s 234B 10,00,000 Total 48,78,782 Add: Refund issued u/s 143(1) 11,20,000 Add: Interest u/s 234B 1,73,600 Total Balance Payable 82,21,470 Ld.AR further submitted that assessing officer while passing final assessment order did not granted working capital adjustment even after the directions of DRP. He submitted that all relevant details required, was furnished by assessee before Ld.AO as per directions of DRP. 5. Aggrieved by additions made by Ld.AO, assessee is in appeal before us now. 5.1 Assessee has raised following additional ground on 15/11/16. d) PRAYER FOR ADMISSION OF ADDITIONAL GROUNDS OF APPEAL 1. The above referred appeal is in respect of the order passed by the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l. It has been submitted that these comparables were agitated before DRP however DRP failed to appreciate contentions raised by assessee. Placing reliance upon decision of Hon ble Supreme Court in case of NTPC Ltd vs CIT reported in 229 ITR 383 and Jute Corporation of India vs CIT reported in 53 taxman 85, submitted that comparables specified in additional grounds may be admitted. Ld.CIT DR, though opposed admission of additional ground, could not controvert submissions advance by Ld.AR. 6. We have perused details relied upon by both sides In our considered opinion the comparables alleged in additional ground arises out of the records and was objected before DRP for its exclusion/inclusion. Considering inadvertent mistake on behalf of assessee in raising these grounds before this Tribunal, we allow additional ground raised now. Accordingly additional grounds raised by assessee vide application dated 5/11/2016 stands allowed. It has been submitted that all Transfer Pricing issues raised in Ground No. 1-6 are in respect of inappropriate comparables included by Ld.TPO, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ention of personal in its organisation. Based upon the above we shall now undertake compatibility of alleged comparables for exclusion by assessee. 8. Apollo Healthstreet Ltd., Asit C Mehta Financial Services Ltd., and Informed Technologies Ltd. It has been submitted by Ld.AR that, these comparables fail RPT filter, being less than 15%. In support of his contention placed reliance on following decisions of this Tribunal: M/s Poll to Win India Pvt.Ltd. vs DCIT reported in IT(TP)A No. 1053/Bang/2011; M/s Tesco Hindustan Services Centers Pvt.Ltd. vs DCIT in ITA No. 1285/Bang/2011; M/s Magma Design Automation India Pvt.Ltd. vs ACIT in ITA No.1241/Bang/2011; First Advantage Offshore Services Pvt.Ltd. vs DCIT in ITA No. 1086/Bang/2011; On the contrary, Ld.CIT DR relying upon Rule 10 B (4) of Income tax Rules, submitted that in; Microelectronics Ltd., reported in 87 Taxmann.com 262; Triology E-business Software, reported in 29 Taxmann.com 310 Sendute India Ltd., In ITA (TP) A 59/Bang/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , he failed to apply same yardstick to exclude companies with high turnover. He submitted that reasons given by authorities below for exclusion of companies with low turnover was that, such companies do not reflect industry trends, as their low cost to sales ratio made their results unreliable. Contention of assessee was that there would be effect on profitability whenever there is high or low turnover and therefore companies with high turnover should also be excluded from the list of comparable companies. DRP rejected assessee s contentions without assigning any reason. Ld.AR placed reliance on decision of co-ordinate bench of this Tribunal in the case of Genisys Integrating Systems (India) (P.) Ltd. (supra), wherein it was held that when there is a limit for the lower end for identifying the comparable companies, there is no reason why there should not be an upper turnover limit also, as size matters in business. Ld.AR submitted that co-ordinate bench of this Tribunal in the case of Dell International Services India (P.) Ltd. v. Dy. CIT reported in [2018] 89 taxmann.com 44 for Assessment Year 2005-06 considered various aspects of application of turnover filter fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt.Ltd vs.DCIT(supra). Reliance has been placed on decision of this Tribunal in case of Autodesk India Pvt.Ltd. vs DCIT reported in (2018) 96 Taxmann.com 263 followed similar view to exclude identical comparables by applying turnover filter, wherein all the decisions relied upon by Ld. CIT DR has been considered and dealt with. Therefore, respectfully following above decisions, we direct Ld.TPO to exclude HCL Comnet Systems and Services Ltd., Infosys BPO Ltd., and Wipro Ltd., from final list as they fail turnover filter of 1-200 crores. 12. Now coming to comparables alleged to be functionally not similar with assessee. We shall analyse each of them, having regards to annual reports of comparables placed before us. a) Accentia Technologies Ltd., This company has been selected by Ld.TPO into the list of comparables. Ld.Counsel submitted that during the year under consideration Geo-Soft Technologies (Trivandrum) Ltd. and Iridium Technologies India Pvt. Ltd amalgamated with Accentia resulting in abnormal rise in profits. It has been submitted that Delhi benches in case of Ciena India Pvt.Ltd vs. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (KPO)and thus held these companies un comparable with an assessee which is engaged in IT enabled services. Relevant paragraphs of order of Tribunal in case of First Advantage Offshore Services (P.) Ltd. (supra) are extracted hereunder: 39, Having heard both the parties and having considered their rival contentions, we find that the assessee had raised elaborate objections to each of the comparables in group 3 before the TPQ, The TPO has also reproduced the said objections in his order para 6.5.1. of page 178 of his order. He has rejected the contention of the assessee by holding that every function within BPO sector can be from low end to high end and the activities of the assessee such as accounting, web management, network management are BPO services using technology but these services are not categorized as KPO. He held that a call centre may offer support services, like telemarketing to high end services like technical support services, where not only the level of knowledge, skill required would be high, but the technical knowledge as well would be high. According to him, back office transaction process services may he as remarkable and as complicated as insu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n included by ld.TPO in the list of comparables. Ld.Cunsel submitted that this company is functionally not similar, as it is into software development and data cleaning segment vis-a-vis captive service provider like assessee. It has been submitted that ld.TPO considered data cleaning segment as ITES, only on the basis of companies reply under 133 (6) of the Act. However on perusal of the reply it is very clear that company provides cleansing services only to those clients for whom it had developed software applications. Thus Ld. counsel submitted that cleansing services rendered by this company is ancillary to software development services provided to those clients to whom it had provided the software applications. On the contrary ld. DR placed reliance upon the order of ld. TPO. We have perused submissions advanced by both sides and observed that it is into software development and data cleansing segment. It has been categorised to have only one segment being software development and is engaged in providing open and end- to-end web solutions, software consultancy, design and development of solutions using the latest technologies. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in providing low end services to group companies. The relevant finding of the Hon'ble Tribunal read as follows :- In so far as M/s eClerx Services Limited is concerned, the relevant information is available in the form of annual report for financial year 2007- 08 placed at page 166 to 183 of the paper book. A perusal of the same shows that the said company provides data analytics and data process solutions to some of the largest brands in the world and is recognized as experts in chosen markets-financial services and retail and manufacturing. It is claimed to be providing complete business solutions by combining people, process improvement and automation. It is claimed to have employed over 1500 domain specialists working for the clients. It is claimed that eClerx is a different company with industry specialized services for meeting complex client needs, data analytics KPO service provider specializing in two business verticals - financial services and retail and manufacturing. It is claimed to be engaged in providing solutions that do not just reduce cost, but help the clients increase sales and reduce risk by enhancing efficiencies an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion regarding this comparable and has relied upon decision of Delhi Tribunal in the case of ICC India Pvt.Ltd., vs. ACIT (supra). Ld.DR placed reliance upon order of ld.TPO. We have perused submissions advanced by both the sides in the light of records placed before us. It is observed that this company is involved in providing structural engineering services to high-rise buildings. It is observed that this company has undergone merger with Tools Pvt. Ltd., and acquisition of Crossroads IMC USA. Post amalgamation accounts of companies were revised for the financial year 2006-07 because of which this company has underwent a huge change in business module. Delhi benches of this Tribunal in Cienna India Pvt.Ltd reported in (2015) 57 taxman.com 329 as well as Mumbai bench in Petro Araldite Pvt.Ltd reported in (2013) 31 taxman.com 281, held that a company cannot be considered as comparable because of financial results becoming distorted due to mergers, demergers etc. Similar view has been taken in case of Toluna India Pvt.Ltd reported in (2014) 50 Taxmann.com 24, and ICC India Pvt.Ltd versus DCIT reported in (2016) 71 taxman.com 164. Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Ltd and Triton Corporation Ltd. on the ground that their financial results are not reliable. It has been submitted that comparability of Maple E Solutions Ltd., and Triton Corporation Ltd. came up for consideration before co-ordinate bench of this Tribunal in case of e4e Business Solutions India (P.) Ltd. (supra), wherein it has been held: 14. With regard to company at SI.Nos.19 23 of the list of comparable companies chosen by the TPO viz., M/s. Maple E solutions Ltd., and Triton Corporation Ltd., the Mumbai Bench of the Tribunal in the case of Stream International Services (P.) Ltd., (supra) in para 13(iii) at page-14 of the order held that the promoters of these two companies were involved in fraud for earlier years and hence the financial results of these companies are distorted and cannot be relied upon and in this regard relied on several decisions rendered by the various benches of ITAT. Respectfully following the same, we direct the aforesaid two companies be excluded from the list of comparable companies chosen by the TPO. Learned Standing Counsel has not brought anything controverting the findings of the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortunity of being heard to the assessee. Learned Standing Counsel has not brought anything controverting the findings of the Tribunal in the above case. Therefore, we have no reason to differ with the reasoning adopted by the co-ordinate bench in the case of e4e Business Solutions India (P.) Ltd. (supra). Therefore, we direct the AO/TPO to exclude these companies form the list of comparables. Even before us nothing contrary to the above findings has been brought on record by revenue. Respectfully following the same, we therefore direct Ld.TPO to exclude these comparables from final list. i) Vishal Information Technologies Ltd This comparable was selected by Ld.TPO. Ld.Counsel submitted that this company is not similar in function, assets and risk profile with that of assessee and it has a different business module. Further it has been submitted that Hon ble Delhi High Court in the case of Rampgreen Solutions Pvt Ltd., (supra) categorised this comparable to be a KPO service provider. Further Ld.Counsel submitted that this entity outsources its ITES services to third-party vend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is set aside to Ld.TPO. k) Spanco Ltd., Assessee sought to exclude this comparable on the basis of failure of revenue filter earned from ITES segment. It has been submitted that this comparable earns only 8.21% from ITES segments and that the employee cost of this company is as lower 7.16%. It has also been pointed out that this comparable has underwent a demerger of the division during the year under consideration. In support of his submission he placed reliance upon the decision of coordinate bench of this Tribunal in case of Siemens information processing services (P) Ltd vs DCIT(supra) and AOL online India private limited reported in (2016) 68 Taxmann.com 235. Ld. DR on the contrary placed reliance upon orders of authorities below. We have perused submissions advanced by both sides in the light of the records placed before us. It is observed that coordinate bench of this tribunal in aforestated decisions have set aside this issue for verification as regarding be employee cost of 7.16% and revenue earned under ITES segment at 8.21% with a direction to exclude if the alleged fact is found to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that following comparables are sought to be excluded on turnover filter: Flextronics Software Systems Ltd iGate Global Solutions Ltd Infosys Technologies Mindtree Ltd Persistent Systems Ltd Sasken Communications Technologies Ltd (seg.) Tata Elxsi Ltd Wipro Ltd (segmental) B) Ld.AR submitted that Geometric Ltd (seg) is to be excluded as related party transaction of this comparable is more than 15%. C) Ld.AR submitted that assessee seeks to exclude following comparables on functional dissimilarities: Accel Transmatic Ltd., Avani Cimcon Technologies Ltd., Celestial Labs Ltd KALS Information Systems Ltd (seg.) A. Ld.AR submitted that these comparables fails in turnover filter of 1 to 200 crores. It has been submitted that companies having turnover of more than 200 crores have to be eliminated from the list of comparables as laid down in several decisions referred to by ld. AR : Genisys Integrating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pra), co-ordinate bench of this Tribunal discussed apparent divergent view of two non-jurisdictional High Courts and also decision of this Tribunal in the case of Sysarris Software (P.) Ltd. v. Dy. CIT reported in [2016] 67 taxmann.com 243 (Bang. - Trib.), wherein, Tribunal, after noticing decision of Hon'ble High Delhi Court in case of Chryscapital Investment Advisors (India) (P.) Ltd. v. Dy. CIT reported in [2015] 56 taxmann.com 417 and decision to the contrary by Hon'ble Bombay High Court in case of CIT v. Pentair Water India (P.) Ltd. reported in [2016] 69 taxmann.com 180 held that, since there were contrary views on the issue, therefore view favourable to assessee laid down in case of Pentair Water India (P) Ltd. (supra) should be adopted. The Ld.CIT DR submitted that turnover is not a relevant criteria to regard a company as not comparable, so long the two companies are functionally comparable. 14. We have perused submissions advanced by both sides in light of records placed before us. We have also referred to the decisions relied upon by both sides. It has been held in various decisions by this Tribunal that turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. Ld. DR placed reliance upon orders of authorities below. 15. We have perused submissions advanced by both sides in the light of the records placed before us. It is observed that this tribunal has remitted this comparable back to Ld.TPO by observing as under: 31. .. Question of having a higher RPT level or lower RPT 11 would depend on the No. of comparables available after exclusions. In the case before us there are 26 comparables and even after exclusion there will definitely be at list 9 comparables. Hence we are of the opinion that RPT at 15% can rightly be applied. Since assessee had not raced this ground before any of the authorities below, we remit the question of exclusion of geometric Ltd back to the file of the AO/TPO for consideration afresh. Even in the case before us it is observed that there are 8 comparables left after exclusion of the alleged comparables. However assessee has raised this issue before us for the 1st time and accordingly respectfully following aforestated view of coordinate bench of this tribunal, we also remit this comparable back to Ld.TPO for consideration afresh. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DXchange . It was also submitted that this company has revenue from software product sales, apart from rendering of software services for which segmental information is not available. It has therefore been submitted that this company is functionally different from assessee. It was further submitted that Mumbai Bench of Tribunal in case of Telcordia Technologies Pvt. Ltd. v. ACIT in ITA No.7821/Mum/2011 accepted assessee s contention that this company has revenue from software product and observed that in absence of segmental details, Avani Cincom cannot be considered as comparable to an assessee who was rendering captive software development services. Ld.DR, on the other hand, relied on order of Ld.TPO. 17. We have considered submissions advanced by both sides and perused records placed before us. It was submitted that this company has made unusually high profit during the financial year 06-07. It is observed that Operating revenues increased 63.03% which indicates that it was an extraordinary year for this company. Even growth of software industry for previous year as per NASSCOM was 32%. The growth rate of this company was doub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Addl. CIT ITA No.6623/Mum/2011 (for AY 2007-08) in which comparability of this company for clinical trial research segment. The Company has developed a drug design tool CELSUITE to find lead molecules for drug discovery and has patented the same. It has observed that this Company developed molecule to treat Leucoderma and multiple cancer which is also protected under IPR by filing patent. It is observed that this company is planning to set up biotechnology facility to manufacture industrial enzymes, which include research laboratories for carrying out further R D activities to develop new drug molecules and license them to Interested Pharma and Bio Companies across the GLOBE. It is thus observed that this company is into diversified activities and therefore cannot be considered as functionally comparable with Assessee who is a captive service provider. It was thus submitted that, this company is not into software development activities, accordingly, this company should be rejected as comparable being functionally different. Ld.DR, on the other hand, relied on order of Ld.TPO. 18. We have considered submissions advanced by bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ftware development services provided by the assessee. The appellant has submitted an extract on pages 185-186 of the Paper Book from the website of the company to establish that it is engaged in providing of I T enabled services and that the said company is into development of software products, etc. All these aspects have not been factually rebutted and, in our view, the said concern is liable to be excluded from the final set of comparables, and thus on this aspect, assessee succeeds. Based on all the above, it was submitted on behalf of the assessee that KALS Information Systems Limited should be rejected as a comparable. Ld.DR, on the other hand, relied on order of Ld.TPO. 19. We have considered submissions advanced by both sides and perused records placed before us. We find that Ld.TPO concluded on basis of information obtained by issue of notice u/s.133(6) of the Act. This information which was not available in public domain could not have been used by Ld.TPO, when the same is contrary to annual report of this company as highlighted by Ld.AR. We also find that in the decision referred to by Ld.AR, of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been submitted by Ld.AR that therefore stated amount was not substantiated by assessee with supporting documents and evidences it has been submitted that the payments were made to Golden Palms and Taj residency for banquet and food for the purpose of seminar conducted by assessee and companies annual Day celebration respectively. It was thus submitted that there was not liable to TDS. He placed reliance upon CBDT circular No. 5/2002 dated 08/08/95 wherein it has been very clearly mentioned that the rooms hired on regular basis are liable for TDS. Ld.AR submitted that in the present case the payments have been made for conducting seminars and companies annual Day celebrations and the hotels had not earmarked any room at a specific rate. He also submitted that the hotels were under no legal obligation to provide the rooms and the rooms were hired for a maximum period of 3 days on regular basis. On the contrary, Ld.DR, placed reliance upon orders passed by authorities below. 22. We have perused the submissions advanced by both sides in the light of the records placed before us. It is observed that the occupancy of the rooms in Gold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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