TMI Blog2023 (11) TMI 1185X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Sonata Software Ltd - We deem it fit to restore the inclusion of this comparable alone to the file of the ld AO/ TPO for verification of the facts of the aforesaid table i.e. partywise details submitted by the ld AR herein above. If on verification, it is found that the aforesaid details mentioned by the ld AR are correct, then the said comparable should be excluded from the final list of comparables while benchmarking the international transaction of software development segment of the assessee. Exclusion of Infosys Ltd - Infosys Ltd should not be treated as a comparable with low risk Captive Service Provider like that of the assessee company. Accordingly, we direct the ld AO/ TPO to exclude Infosys Ltd from the final set of comparables while benchmarking the international transaction of software development segment. Exclusion of Thirdware Solution Ltd - We find that the Hon'ble Delhi High Court in the case of PCIT Vs. Open Solution Software Service Pvt. Ltd [ 2020 (5) TMI 440 - DELHI HIGH COURT] had upheld the findings of the Tribunal that in the absence of segmental data to work out the separate margins from software services, Thirdware Solutions cannot be held to be co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ender those services and accordingly would apparently fall under the category of Knowledge Process Outsourcing (KPO), thereby making it incomparable with the assessee company as it is low end Business Processing Outsourcing (BPO) services provider to its AEs. However, some of the activities carried out by this comparable company also falls within the ambit of BPO services. However, there is no segmental data available to ascertain the segmental margins from KPO services and BPO services separately. Hence, we hold that the said comparable company is required to be excluded from the final set of comparables while benchmarking the international transaction of the assessee in respect of its ITES segment. Exclusion of Cyber Media Online Ltd company is engaged in media and media services, thereby making it completely functionally incomparable with that of the assessee company which is engaged in low risk captive ITES service provider to its AEs. Hence, we direct the ld TPO to exclude this company from final set of comparables while benchmarking the international transaction of the assessee in respect of its ITES segment of the assessee company. Educational Consultants India Ltd as a comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s is a fit case for admission of the additional evidences filed by the assessee. Accordingly, we admit the additional evidences and restore the entire issue in toto to the file of ld AO/ TPO for denovo adjudication in accordance with law after considering the entire additional evidences and decision of Hon ble Delhi High Court in the case of Kusum Healthcare [ 2017 (4) TMI 1254 - DELHI HIGH COURT] The assessee is also at liberty to adduce further evidences, if any, in support of its contentions. Appeal of the assessee is partly allowed for statistical purposes. - Shri M. Balaganesh, Accountant Member And Shri Anubhav Sharma, Judicial Member For the Assessee : Sh. Neeraj Jain, Adv, Mr. Abhishek Aggarwal, AR, Sh. Ramit Katyal, AR For the Revenue : Sh. Rajesh Kumar, CIT DR ORDER PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.1361/Del/2015 for AY 2010-11, arises out of the order of the ld AO dated 20.01.2015 [hereinafter referred to as ld. AO , in short]. 2. The assessee has filed concise grounds of appeal as under:- CONCISE GROUNDS OF APPEAL 1. That the assessing officer erred on facts and in law in completing assessment under section 143(3) read with section 144C of the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing officer/TPO erred on facts and in law in not appreciating that since the operating profit to sales ratio (PLI) of the appellant in its manufacturing segment at 8.41% falls within the range of +/-5% of the average operating profit to sales ratio of the comparable companies at 10.03%, in terms of second proviso to section 92C(2) of the Act, no adjustment in the arms length price was warranted. 5. That the assessing officer erred on facts and in law in making an adjustment of Rs. 62,87,498 to the arm's length price of the 'international transactions' of purchase of fixed assets on the basis of order passed by the TPO, allegedly holding that the appellant has not furnished the supporting evidence for purchase of such assets. 6. That the assessing officer erred on facts and in law in making an adjustment of Rs. 7,21,61,494 in respect of the receipt of receivable from the associated enterprise considering the same to be an 'international transaction' of loan, on the basis of the order passed under section 92CA(3) of the Act by the Transfer Pricing Officer (TPO). 6.1 That the DRP/TPO erred on facts and in law in re-characterizing the alleged delay in receipts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. 6. We have heard the rival submissions and perused the materials available on record. The assessee is primarily engaged in the business manufacturing of automotive components. The assessee company is substantial controlled by Delphi International Holding SARL Luxembourg which holds 99.99% of share holding of the assessee company during the financial year 2009-10. The assessee provided software development support services amounting to Rs. 95,43,86,355 through its technical center ( TCI ) division to its Associated Enterprises (AEs). TCI division of assessee is engaged in providing software module modification/ technical support and electronic/ independent testing and verification services to Global OEMs through its AES. Delphi Group (Indiana) and other allied entities liaise with the OEMS and develop an understanding of their specific needs. On the basis of its understanding, Delphi Group finalizes the software to be developed/tested. On the basis of the assignments in hand and the resources available, Delphi Group (Indian) allocates work to Delphi India. For undertaking these services, Delphi India is remunerated at a mark-up of 10 percent on costs incurred for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices only to Fujitsu Services Ltd based on contract entered into by holding company. The Annual Report of Infinite Data Systems Pvt Ltd (merged) for the year ending on 31.03.2009 is enclosed in pages 999 to 1036 of the Annual Reports Paper Book. From the perusal of the same in the Director s report under the heading Contract with Fujutsu Services Ltd , it has been mentioned as under:- Contract with Fujitsu Services The Holding/Promoter Company of your Company i.e. M/s Infinite Computer Solutions (India) Limited signed an agreement (Build Operate and Transfer model) with Fujitsu Services Limited to set up Global Delivery Center(s) in India to provide offshore delivery capabilities to Fujitsu and Fujitsu's associated companies. In performance/execution of such contract, your Company has taken on lease the 2 Floor of Building No. A of Plot No. 157 from M/s Infinite Computer Solutions (India) Limited from their existing STPI facility in Bangalore. 10.1.1 The Annual Report of Infinite Data Services Pvt. Ltd (merged) for the year ending on 31.03.2010 is enclosed in pages 1 to 19 of the Annual Reports Paper Book. In the significant accounting policies and notes on accounts under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the comparable company is completely an independent transaction dehors the regular receipt of technical services fees. In any case, said component represent miniscule portion of the total revenue of the comparable company. Even in the absence of the segmental data for the same, the said comparable company would become functionally comparable with that of the assessee. 10.1.4. The ld AR submitted that the services rendered by comparable company to Fujitsu Services Ltd would also be deemed to be an international transaction in view of the fact that the said services were rendered based on the contract entered into by the holding company i.e. Infinite Computer Solutions India Ltd, in terms of section 92B(2) of the Act. Hence, it becomes a controlled transaction and accordingly the same cannot be compared with that of the assessee. The ld DR submitted that as per section 92B(1) of the Act, an international transaction means a transaction between two or more associated enterprises either or both of them should be non-resident. In the case of Infinite Data Services Pvt. Ltd, its associated enterprise is Infinite Computer Solutions India Ltd (holding company), which is also an Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnational transaction of the assessee. On this limited ground itself, we hold that Infinite Data Systems Pvt. Ltd deserves to be excluded from the final set of comparables with the assessee and deserves to be excluded. 10.1.6 As per section 10B(1)(e) of the Income Tax Rules, the Arms Length Price in relation to international transaction under TNMM should be determined by comparing the net profit margin realized by the assessee from an international transaction entered into with the AE that the net profit margin realized by the unrelated or uncontrolled entity from international transaction. The case of the revenue before us is that the transaction entered into by Infinite Data Services Pvt. Ltd with Fujitsu Services Ltd at the behest of Infinite Computer Solution India Ltd (India entity which is a holding company of the comparable company) does not fall within the ambit of definition of international transaction as per section 92B(1) and 92B(2) of the Act. The logical conclusion then would be that the said comparable would become automatically outside the scope of comparability per se. Hence, even as per the Rule i.e. 10B(2) the said comparable company cannot be treated as comparab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t discernable from the audited financial statements of the comparable company. The ld AR also placed reliance on the coordinate bench decision of this tribunal in the case of Alcatel-Lucent India Ltd Vs. DCIT in ITA No. 6856/Del/2015 dated 24.08.2016 for AY 2011-12, wherein, under identical circumstances, E-Infochips Bangalore Ltd was considered to be functional dissimilar to software development services by holding that the said comparable company is engaged in diversified services like IT enables services, development of software products and solution for product design and development, quality assistance and certification, reengineering, sustenance and volume production, software consultation of manufacturing EVM and VDM electronic board etc. Further it was held that the comparable has varied revenue mix i.e. earning revenue from software development, hardware maintenance and information technology consultancy services. It was further observed that no segmental information was available in the Annual Report of the company as it records revenue from sales of products and revenue from software development and hence the margins from software development services alone could not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cannot be properly deduced from the data available in the audited financial statements of the comparable company. Hence, the reliance placed by the ld AR on the decision of the Delhi Tribunal in the case of Alcatel- Lucent referred (supra) is squarely applicable to the facts of the case. It is also pertinent to note that the said decision has been approved by the Hon ble Jurisdictional High Court. Hence, we hold that in view of the aforesaid observations and respectfully following the judicial precedents relied upon hereinabove, we hold that E-Infochips Bangalore Ltd should be excluded from the final set of comparables while benchmarking the software development services of the assessee. 10.3. Exclusion of Sonata Software Ltd As stated earlier, the ld. TPO had applied related party transaction (RPT) filter up to 25% to include the particular comparable. The ld TPO for the instant case had applied RPT filter upto 25% for both the expenses and income side in aggregate. Accordingly, the entire expenses and income side vis a vis the transactions of the comparable company with its related parties are as under:- Nature of related party transaction Amount (in INR) Purchase 24 , 293,864 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Infosys and accordingly, the ld AR pleaded Infosys to be excluded from the final set of comparables. Further, the ld AR stated that assessee herein is a captive service provider to is AEs in the software development segment, whereas Infosys is providing software development services to various parties and is enjoying huge economies of scale because its brand, volume of business and its years of existence in the software field. Accordingly, it would be able to enjoy the advantage of premium in its pricing eventually leading to higher profitability. These facts are conspicuously absent in the assessee company. Further the ld. AR submitted that Infosys Ltd is also into diversified activities having diversified products. The total revenue earned by Infosys from products was Rs. 925 crores for the relevant year. The ld AR before us though conceded that having higher turnover may not be a relevant consideration for the purposes of ignoring a particular comparable company, further pleaded that the fact of existence of the said comparable company in the IT field for almost three decades would certainly given them an edge in the overall pricing of the services to be rendered and for the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld enhance the ability to garner profits and negotiate contract more in their favour. It is also pertinent to note that Special Leave Petition was preferred by the revenue against this contention which was dismissed by the Hon'ble Supreme Court in SLP(Civil) Diary No. 32469/2018 dated 30.11.2018. We are conscious of the fact that though the aforesaid decisions were not rendered for the AY 2010-11, still it would hold the field in view of the fact that functions performed by Infosys Ltd and assessee company had not changed substantially from AY 2006-07 to AY 2010-11. Respectfully following the said decisions, we hold that Infosys Ltd should not be treated as a comparable with low risk Captive Service Provider like that of the assessee company. Accordingly, we direct the ld AO/ TPO to exclude Infosys Ltd from the final set of comparables while benchmarking the international transaction of software development segment. 10.5. Exclusion of Thirdware Solution Ltd The copy of the Annual Report of this comparable company for the year ended 31.03.2010 is enclosed in pages 361 to 420 of the Annual Reports Paper Book. This company is engaged in software product development, implementation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs of the Tribunal that in the absence of segmental data to work out the separate margins from software services, Thirdware Solutions cannot be held to be comparable with any assessee engaged in software development. Similar view was also taken by the Hon'ble Delhi High Court in the case of PCIT Vs. FISERV India Pvt. Ltd in ITA NO 17/2016 dated 06.01.2016. Hence respectfully following the aforesaid decisions of Hon ble Jurisdictional High Courts, we hold that Thirdware Solution Ltd should be excluded from the final list of comparables while benchmarking international transaction of software development segment of the assessee. 10.6 Exclusion of Persistent Systems Ltd 10.6.1 Persistent Systems Ltd is engaged in the business of development and sale of software products. The audited financial statements of this comparable company for the year ended on 31.03.2010 are enclosed in pages 421 to 600 of the Annual Report Paper Book. In the Annual Report of the said company it has been mentioned that the said comparable company had released 3000 plus products in the last five years and catered to 300 customers across the globe. Further, Outsourced Software Products Development (OPD) is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation in public domain. With regard to reliance placed by the ld DR on the coordinate bench decision in case of Steria India Ltd for AY 2014-15 dated 28.09.2020, we find that this Tribunal for the same assessee for AYs 2010-11 and 2011-12 in ITA No. 512 and 511/Del/2016 respectively dated 17.11.2020 had categorically held that Persistent Systems Ltd is a product development company and cannot be compared with routine software development provider. It is also pertinent to note that this decision dated 17.11.2020 has been rendered subsequent to the decision relied by the ld DR which was rendered on 28.09.2020. Further, we also find that this Tribunal in the case of Saxo India Pvt. Ltd Vs. ACIT in ITA No. 6148/Del/2015 dated 05.02.2016 had categorically held that Persistent Systems Ltd is functionally different from a regular software service provider and there was insufficient segmental information with regard to sale of software services and sale of software products. It is pertinent to note that the revenue had carried this matter before the Hon ble Jurisdictional High Court and Hon'ble Delhi High Court in ITA 682/2016 dated 28.09.2016 had upheld the findings of the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT Vs. Steria India Pvt Ltd for AY 2010-11 in ITA No. 512/Del/2016 dated 17.11.2020 had considered the identical observations made by the ld TPO and the arguments advanced by the ld DR before us in the instant case and held that the said comparable company is engaged into diversified range of software activities and is ISO-9001:2008 certified product engineering and software development company, having special expertise in emerging technology such as cloud computing, business intelligence and mobility and it has been serving client of more than 8 industries across the globe with over 2000 professionals on board. The product engineering services/ outsourced product development services of this company include the product design and development, product feature enhancement, product volume migration, software product testing, product maintenance and support, produce release and license management, SAAS/ SOA services, Web 2.0 services etc; enterprises application development services include customer relationship management, enterprises resource planning, business intelligence, knowledge management, enterprises application integration, consulting etc; ID Services include global offshor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... com and instrumentation with cost effective and timely product engineering services. Your Company is also moving towards solutions based offerings rather than point service engagements with a view to increasing its value proposition thereby Your Company sees growth opportunities in the telecommunication and broadcasting domains where there have been good breakthroughs achieved during 2009-10, apart from accelerating its growth in the other key domain of transport electronics. Your Company has identified new business in defence and public safety, avionics and utilities and smartgrid applications which should drive its future growth. Innovation Design Engineering Services: This Division supports global corporations in the area of new brand/product introduction from concept to market. Its expertise lies in the areas of consumer insights, product/service innovation, industrial design, functional prototyping and engineering. It also engages in brand development and retail design. It services diverse industries ranging from FMCG, automotive, electronics and appliances to healthcare. During the year, the Division entered into an alliance with a leading hospital to jointly develop innovati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , digital media and life sciences solutions through its tie-ups with global leaders in these respective areas. During year, the segment turnover and results were Rs 39.43 crs, and Rs 3.08 crs, respectively, compared to Rs.40.09.crs, and R$2.34 0 respectively during 2008-09. Due to the low margins on hardware products, the Segment is focusing on a solutions centric approach which includes more ef software and services and reducing its dependence on pure hardware business. The segment has geared itself to tap business opportunities in the high growth areas of security and surveillance, videoconferencing solutions, storage and server virtualization software and services etc. 10.8.1. The revenue stream indicates that this comparable had earned income from sales and support of Rs. 3167.51 lacs and income from service of Rs. 35469.53 lacs for the year under consideration. However, segmental data is available in the software development and services vide note 29 of the Notes of accounts. The ld DR drew our attention to the Director s report in page 663 of the Annual Report Paper Book and submitted that this company is predominantly a software development company and that the other activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voke Technologies Ltd has been rightly done by the ld TPO in the instant case. 11. The ground raised by the assessee in Ground Nos. 2 and 2.1 are disposed of in the above mentioned terms. 12. Ground No. 3.1 and 3.2 raised by the assessee are challenging the transfer pricing adjustment of Rs. 1,15,08,130/- to the Arm s Length Price of international transaction of business support services rendered by the assessee. 13. We have heard the rival submissions and perused the materials available on record. During the financial year 2009-10, the assessee provided Business Support Services amounting to Rs. 7,82,10,694/- to its associated enterprise. The company provides low end back-office administrative support services to its AEs. These services primarily include procurement support activities to its AEs for sourcing automotive components from India and other countries. In this respect, the assessee maintains contact and product details of various suppliers of automotive components in India as well as overseas, and provides these details to its AEs on the basis of which the AEs contact its vendors/suppliers and enter into discussions for sourcing components directly from such vendors. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TCOs formed by the key national level financial institutions in association with state level institutions and banks. Accordingly, being a Govt. enterprise, Apitco Ltd was established to provide high end and technical consultancy services to other Govt. Companies and body corporate. This company was also involved in high end technical consultancy related to asset reconstruction and management services, micro enterprises development, skill development, entrepreneurship development, cluster development among other activities. The financial statements of Apitco Ltd for the year ended on 31.03.2010 are enclosed in pages 709 to 746 in Annual Report Paper Book. There is absolutely no dispute that this comparable company is a Govt. company and is subjected to audit and review by Comptroller and Auditor General (C AG) of India u/s 619(4) of the Companies Act, 1956. This fact goes to prove that the said comparable is indeed a Govt. Company. Now the short issue that arises is whether a Govt. company could be considered as a comparable company with that of the private ITES service provider. It is a known fact that Govt enterprises operate on a model of zero risk with no profit intent, hence, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons etc. Thus, it is not comparable. Interestingly in the present case the Assessee itself picked up two of the 100% government owned companies namely ECIL and ITDCL as its comparables but that was not accepted by the TPO or the DRP. The reason for the ITAT excluding Apitco as a comparable is also for the same reason that it was a 100% government owned company. 11. The Court finds that the view taken by the ITAT in the present case, which is consistent with the view expressed by the Mumbai Bench of the ITAT and which has been affirmed by the Bombay High Court, is indeed a plausible one to take. 12. Whether taking up a 100% government owned company as a c would be justified or not would depend on the facts and circumstances of the case. The basic rule as contained in Rule 10B of the Income Tax Rules would apply. In the facts of the present case, however, the Court finds tha the view taken by the ITAT does not give rise to any substantial question of law. 13. The appeal is dismissed. 18.1. It is also pertinent to note that against this decision, the revenue carried the matter before the Hon'ble Supreme Court and the Special Leave Petition in Civil Appeal No. 18255/2018 dated 03.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt services of the assessee. 18.3. Exclusion of Mitcon Consultancy Services Ltd. The audited financial statements of this comparable company for the year ended 31.03.2010 are enclosed in pages 547 to 912 of the Annual Report Paper Book. From the perusal of the same, it is found that the said company provides wide range of services in diversified fields such as corporate, industry, banking and the Govt. The nature of services provides by this comparable company varies from the power project to even serving entrepreneurs from small and medium enterprises in their startup efforts. This company is more into EPC consultancy services for 12 cogen power plants along with concurrent sugar factory modernization of Tamil Nadu Electricity Board; EPC consultancy services and Environment clearance for two integrated sugar, cogen power ethanol plants in Bihar for Hindustan Petroleum Corporation Ltd., a major public sector client; Successful commissioning of 8 MW cogen power plant of Kranti SSK 16 MW Cogen power plant of Yashwantrao Mohite Krishna SSK; Introduction of additional business lines like ESCo, Conditioning Monitoring, Wind Resource Assessment Micro sitting, Carbon Foot Printing etc.; S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any is functionally not comparable with that of the assessee herein. Accordingly, we direct the ld AO/ TPO to exclude this comparable company from the final list of comparables while benchmarking the international transaction of the assessee in respect of its ITES segment. 18.4. Exclusion of HCCA Business The audited financial statements of this comparable company for the year ended 31.03.2010 are enclosed in pages 913 to 931 of the Annual Report Paper Book. From the perusal of the same, the activities carried out by the said comparable company are not discernable at all. Functions performed by the assessee company is not discernable from the information available in the public domain such as audited financial statements. Then it would not be appropriate on the part of the ld AO/ TPO to refer to the information contained in the website of the comparable company. We find from the perusal of the ld TPO order, the assessee had provided information about the functions performed by the said comparable company based on the data available in the website of the comparable company. In principle, we do not uphold the view of placing reliance on any information that is available in the websit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upport services, it is also a company under the control of Govt. of India. As we have already held that the Govt company cannot be compared with the private concern like that of the assessee, we hold that this comparable company had been rightly excluded by the ld TPO. 18.7. With these above observations the grounds Nos. 3, 3.1 and 3.2 raised by the assessee are disposed of in the above mentioned terms. 19. Ground No. 4 and 4.1 raised by the assessee are challenging the transfer pricing adjustment of Rs. 63,30,719/- to the ALP of international transaction undertaken in relation to manufacturing segment of the assessee. 19.1. We have heard the rival submissions and perused the materials available on record. We find that the ld AO/ TPO pursuant to the directions of the ld DRP had arrived at the final set of comparables in the manufacturing segment of the assessee and after granting working capital adjustment thereon as under:- SNo Name of the company Companies considered after DRP OP/OI (WC adjusted) 1 A N G Industries Ltd. 6.37% 2 Banco Products (India) Ltd. 20.36% 3 Precision Camshafts Ltd. 20.13% 4 Rane Engine Valve Ltd. 4.71% 5 Roots Industries India Ltd. - 6 Talbros Automotive C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactured by the AE. 20.2. The assessee placed 3rd party purchase order in page 353 of the PB. The assessee also filed copy of invoice of Tata Motors Ltd and back to back invoice raised by Delphi Automotive System, LLC before the Ld. DRP. The Ld. DRP directed the Ld. TPO to reconsider the issue after examining the documents filed by the assessee. This fact is evident from para 15.3 of the directions of the Ld. DRP. We find that the Ld. AO/TPO passed the order without adhering to the said binding directions of the DRP by stating that the same evidence was furnished before the Ld. TPO in the original proceedings and that no new fact or evidence has been brought on record by the assessee. 20.3. At the outset, we find that the Ld. TPO had not referred to any of the prescribed methods in section 92C of the Act to determine the ALP of international transaction in respect of import of fixed assets to be at Rs. Nil. The Ld. TPO is bound to follow any of the prescribed six methods as the most appropriate method for benchmarking the international transactions of the assessee. Without following any of the prescribed method, the Ld. TPO is prohibited from benchmarking the international tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to AE so as to impute notional interest income. Further, assessee argued that working capital adjustment has been given by the TPO for the outstanding receivable from AE. Hence, the interest costs which is sought to be imputed gets subsumed in the working capital adjustment itself. Hence, there is no need for separate imputation of interest on outstanding receivables. Reliance was placed on the decision of the Hon ble Jurisdictional High Court in the case of Pr. CIT vs. Kusum Healthcare Pvt. Ltd. in ITA No.765/2016 dated 25.04.2017 reported in 398 ITR 66. 21.3. The ld AR before us filed an application before us in terms of Rule 29 of the Income Tax Appellate Tribunal Rules, 1963 furnishing the following details:- a. Details in respect of realization of invoices raised during the year by the assessee in the business support services segment; b. Details in respect of realization of invoices outstanding as on 01.04.2009 from the AEs; and c. Details of amounts payable to the AEs as on 31.03.2010. 21.4. The ld AR prayed for admission of these additional evidences and requested for remanding back the issue to the file of ld. AO/ TPO to readdress the issue in dispute in the light of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more credit period on the receivables from AEs, which in normal circumstances, no person would do it in a comparable uncontrolled transaction. This constitutes indirect funding made by the assessee to its AE. It requires to be separately benchmarked. 21.9. In rebuttal, the ld AR argued with regard to additional evidences, the opening balance of receivables as on 01.04.2009 was never asked by the ld TPO in the show cause notice. Whatever details that were called for were duly furnished before the ld TPO. The ld AR also submitted in rebuttal that details of amounts payable to AEs were duly furnished by the assessee before the ld TPO. 21.10. Considering the aforesaid submissions of both the parties, we deem it fit and appropriate that this is a fit case for admission of the additional evidences filed by the assessee. Accordingly, we admit the additional evidences and restore the entire issue in toto to the file of ld AO/ TPO for denovo adjudication in accordance with law after considering the entire additional evidences and decision of Hon ble Delhi High Court in the case of Kusum Healthcare referred (Supra). The assessee is also at liberty to adduce further evidences, if any, in supp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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