Sun Life India Service Centre Pvt. Ltd., Unitech World Tower-B, 2nd floor, Sector-39, Gurgaon. Vs. ACIT, Circle-II, Gurgaon.
May, 28th 2015
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCHES : I : NEW DELHI
BEFORE SHRI R.S. SYAL, AM AND SHRI GEORGE GEORGE K., JM
Assessment Year : 2008-09
Sun Life India Service Centre Vs. ACIT,
Pvt. Ltd., Circle-II,
Unitech World Tower-B, Gurgaon.
2nd floor, Sector-39,
Assessee By : Shri G.C. Srivastava, Advocate &
Shri Saurabh Srivastava, CA
Department By : Shri Jasdeep Singh, CIT, DR
Date of Hearing : 26.5.2015
Date of Pronouncement : 27.5.2015
PER R.S. SYAL, AM:
This appeal by the assessee is directed against the final order passed
by the Assessing Officer (AO) on 27.9.2012 u/s 143(3) read with section
144C(13) of the Income-tax Act, 1961 (hereinafter also called `the Act') in
relation to the assessment year 2008-09.
2. The first issue raised in this appeal is against the addition on account
of transfer pricing adjustment under the segment of `Provision of software
development and maintenance support services' on one hand and
`Provision of back office support services' including `Provision of finance
and accounts support services' on the other.
3. Briefly stated, the facts of the case are that the assessee is an Indian
company, a part of Sun Life Group, which has diversified financial
services organization providing savings, retirement and pension products
and life and health insurance in Canada, US, UK and Asia. This group
also operates mutual funds and investment management businesses. The
assessee provided Software development and maintenance support services
and also back office support services to its associated enterprises (AEs) for
assistance in their projects. The assessee reported four international
transactions in Form No.3CEB consisting of `Provision of software
development and maintenance support services' with the transacted value
of Rs.30,08,48,648/-; `Provision of back office support services' with the
transacted value of Rs.5,65,34,293/-; and `Provision of F&A support
services' with the value of Rs.24,51,728/-. In order to demonstrate that its
international transactions were at arm's length price (ALP), the assessee
applied the transactional net margin method (TNMM) with the Profit level
indicator (PLI) of Operating Profit to Total Cost (OP/TC). On a reference
made by the AO, the Transfer Pricing Officer (TPO) noticed that the
segment of `Provision of back office support services' was no different
from the segment of `Provision of financial and accounts support services'.
He, therefore, merged these two segments into one for conducting the
benchmarking analysis. Though the assessee initially used multiple-year
data of comparables, however, during the course of the TP proceedings,
such data was restricted to a single year, at the TPO's instance. The TPO
observed that the assessee's OP/TC in the segment of `Provision of
software development and maintenance services' was at 13.23% and in
the `Merged provision of back office support services and F&A support
services' at 14.30%. The assessee initially chose 23 comparables in the
`Software development and maintenance services' segment. However,
during the course of the proceedings before the TPO and by using the
current year's data, the assessee came out with 20 comparables, which
have been listed on page 11 of the TPO's order. The TPO finally selected
20 comparable cases as listed on page 79 of his order. The average OP/TC
of such 20 companies was computed at 20.96%. By applying this PLI as a
benchmark, the TPO worked out transfer pricing adjustment of
Rs.2,05,24,879/- under this segment. As regards the `Merged back office
and F&A support service segment', the assessee initially chose 12
comparables listed on page 6 of the TPO's order, which were reduced to 8
during the course of proceedings before the TPO on the basis of current
year's data. The TPO shortlisted four comparable companies which have
been listed on page 80 of his order. The average OP/TC of said four
comparable companies under this merged segment was computed at
22.85%. By applying this profit rate as benchmark, the TPO worked out
the transfer pricing adjustment amounting to Rs.44,12,714/-. The assessee
challenged before the dispute resolution panel (DRP) the draft order passed
by the AO pursuant to the TPO's order. The DRP reduced the total
addition on account of transfer pricing adjustment from Rs.2.49 crore to
Rs.2,37,41,997/-. The AO finalized the assessment with such addition.
The assessee is aggrieved against the transfer pricing adjustment made in
the final assessment order.
4. We have heard the rival submissions and perused the relevant
material on record. It has been noticed above that the assessee reported
international transaction of `Provision of software development and
maintenance support services' and two separate international transactions
of `Provision of back office support services' and `Provision of F&A
support services'. For the purposes of computation of ALP, the TPO
merged the international transaction of provision of back office support
services with the provision of F&A support services and treated the two as
one international transaction. The assessee has not raised any serious
objection to the said merger of these two international transactions made
by the TPO. In our considered opinion, the TPO has rightly merged these
two transactions as both such services fall in the realm of provision of back
office support services. As such, we will proceed to determine the
correctness of the approach adopted by the authorities in determining the
ALP of the `Provision of software development and maintenance support
services' segment and the merged segment of `Provision of back office
support and F&A support services', one by one.
A. Provision of software development and maintenance support services.
5. The assessee reported the value of this transaction at Rs.30.08 crore
with OP/TC at 13.23%. The TPO changed the composition of comparable
companies and without allowing the working capital adjustment claimed
by the assessee, computed the ALP of this transaction at Rs.32.13 crore.
Before proceeding further, we want to make it clear that the assessee is
aggrieved only against not allowing of working capital adjustment and
inclusion of five companies in the final tally of comparables drawn by the
TPO. Apart from these, the assessee is satisfied on all other aspects of the
computation of the ALP of this transaction by the TPO.
6. As regards the working capital adjustment, the claim for which is
common for both the segments, namely, the `Provision of software
development and maintenance services' and the merged segment of
`Provision of back office support services', the assessee argued before the
TPO that suitable adjustment on account of differences between the
working capital be allowed. The TPO refused to allow such adjustment by
noticing that the assessee has a consolidated profit and loss account and the
segmental reporting of software development and back office support
services was done only for the purposes of TP study of the international
transactions. As the financials of the company showed consolidated
income from both the segments, he opined that it was not possible to
ascertain the creditors and debtors pertaining to each segment. When the
matter was taken up before the DRP, one more reason was assigned for
negativing the assessee's claim on working capital adjustment, being, the
necessity and non-availability of daily average of working capital
deployed, as against the use by the assessee of the average of such figures
of working capital on the first and the last day of the accounting period.
7. We are not inclined to accept, in principle, the view canvassed by
the authorities below that the assessee cannot be allowed a working capital
adjustment. Such an adjustment is restricted to inventory, trade receivables
and trade payables. If a company carries high trade receivables, it would
mean that it is allowing its customers relatively longer period to pay their
amounts, which will result into higher interest cost and the resultant low
net profit. Similarly, by carrying high trade payables, a company benefits
from a relatively longer period available to it for paying back to its
suppliers, which reduces the interest cost and increases profits. In order to
neutralize the difference on account of inventory, trade payables and trade
receivables, it is of utmost importance to allow working capital adjustment
for bringing the case of the assessee at par with the other otherwise
functionally comparable entities. We, therefore, agree in principle with the
grant of working capital adjustment.
8. The view taken by the Dispute Resolution Panel (DRP) for computing
such adjustment on the basis of daily average of working capital deployed
by the tested party and also each of the comparables, is not tenable because
of the order passed by the Delhi Bench of the Tribunal in the case of
Navisite India Pvt. Ltd. Vs. ITO (ITA No.5329/Del/2012). Vide its order
dated 31.5.2013, the Tribunal has held that the components of the working
capital deployed should be considered on annual basis with the average of
opening and closing. We, therefore, hold that the entitlement of the
assessee to the working capital adjustment, cannot be denied.
9. Notwithstanding the allowability of the working capital adjustment,
we are unable to countenance its calculation given by the assessee at its
face value because of an important factor. It is an undisputed position that
the assessee made up its accounts on an entity level. It was only for the
purposes of showing that its international transactions were at ALP, that it
bifurcated the consolidated accounts into different segments. Such
bifurcation of accounts into different segments has not been disputed by
the TPO inasmuch as he has not challenged the correctness of the figures
so deduced in respect of operating profits etc. of each segment. But, when
it comes to the computation of working capital adjustment, one needs to
look only at the figures of inventory, trade receivables and trade payables.
These figures can be culled out only from the balance sheet without any
reference to the segregated income statement of each segment. On a
pointed query from the Bench, the ld. AR conceded that there may be some
trade receivables or payables common to the `Software development
segment' and the other `Merged segment'. In such a situation, it becomes
relevant to see as to how the figures of such trade receivables or payables
have been placed in the computation of working capital adjustment under
each segment. The ld. AR argued that the working of the working capital
adjustment was not challenged by the TPO and, hence, it should not be
embarked upon afresh. We are not convinced with this proposition for the
obvious reason that when the TPO rejected the assessee's claim for the
grant of any working capital adjustment at the threshold itself, there was no
reason for him to examine the veracity of the computation of working
capital adjustment as put forth on behalf of the assessee. Under such
circumstances, we direct the AO/TPO to compute working capital
adjustment, if any, available under both the segments, namely, Provision of
software development and maintenance services and Merged provision of
back office support services and F&A support services distinctly in the
light of our above discussion. Needless to say, the assessee will be allowed
an opportunity of hearing in such fresh determination of the working
capital adjustment, if any.
10. The next issue raised by the assessee in the computation of ALP
under the `Provision of software development and maintenance services
segment' is against the inclusion of five companies in the final list of
comparables selected by the TPO, as under:-
i) Avani Cimcon Ltd.
ii) Helios & Matheson Information Technology Ltd.,
iii) Infosys Technologies Ltd.,
iv) KALS Information Systems Ltd. (Seg)
v) Thirdware Solutions Ltd.
11. Before deciding the comparability or otherwise of these five
companies, it is sine qua non to ascertain the nature of services rendered
by the assessee under this segment. This segment has two classifications,
namely, Software development services and Maintenance support services.
Software development services refers to the development of modules by
the assessee and also parts of modules for software being used by its
overseas group entities. Maintenance support services refer to the services
including bug fixing, carrying out maintenance and support services of
software used by its overseas group entities. The assessee entered into a
Services Agreement dated 1.4.2006 with Sun Life Ireland, under which, it
became responsible for providing software development and maintenance
support services to its overseas group entities. These services were to be
provided under the directions issued by Sun Life Ireland. For this purpose,
the assessee got compensation from Sun Life Ireland on the basis of cost
plus mark-up. Revenue from software development services accounts for
approximately 20% of total revenue under the software development and
maintenance support services earned by the assessee and the remaining
80% is towards software maintenance support services. During the year
under consideration, the assessee was compensated at cost plus 12.52%
mark-up under this segment by Sun Life Ireland for which the invoices
were raised on monthly basis in Canadian dollars.
12. With the above understanding of the nature of services carried out by
the assessee in segment of `Provision of software development and
maintenance support segment', let us examine if the five companies
contested by the assessee are, in fact, comparable.
Avani Cimcon Ltd.
13. This company was not chosen by the assessee as a comparable for the
software development segment. The TPO included it by observing that it
was also engaged into software development consulting company with
client base in Australia, US, UK, Africa and the European Union with
major focus on the travel and insurance industry. The DRP also rejected
the assessee's contention against the inclusion of this company.
14. We have perused the Annual accounts of this company available in
the assessee's paper book from pages 96 to 99. Apart from its Balance
sheet, Profit & loss account and some Schedules, the Director's Report and
Auditor's Report, etc. of this company are not available. The ld. AR
contended that the information of this company available in the public
domain for the year under consideration has been downloaded and placed
before us and except for these documents, no other reports, etc.
constituting part of Annual report for the year ending 31.3.2008, are
available. However, our attention was drawn towards certain Tribunal
orders which have considered the functional profile of this company on the
basis of information available on its website. First is Tribunal order in
Agnity India Technologies Pvt. Ltd. Vs. DCIT (ITA No.6485/Del/2012).
Vide its order dated 20.9.2013, the tribunal considered the functional
profile of this company by noticing it to be a Product company owning
software products like Dxchange, Travel Solutions, Insurance Solutions,
Customer Appreciation, etc. Similar view has been taken by the Mumbai
Bench of the Tribunal in the case of NetHawk Networks India Pvt. Ltd.
Vs. ITO (ITA No.7633/N/2012). Vide its order dated 6.11.2013, the
Tribunal for the assessment year 2008-09 has noticed Avani Cimcon Ltd.,
to be a Product based company and not providing software development
services. No contrary material has been placed before us by the ld. DR to
show the functional profile of this company matching with the assessee.
When contrasted with the assessee company, which is engaged in
providing software development and maintenance services to its group
concerns, we fail to see as to how a software product company like Avani
Cimcon having intellectual property rights over some of the products
developed by it, can be compared with the assessee on an entity level.
We, therefore, order for the elimination of this company from the list of
KALS Information Systems Ltd. (Seg.)
15. This company was not chosen by the assessee as its comparable.
However, the TPO included it in the list by discussing its comparability
jointly with that of Avani Cimcon Ltd. and Thirdware Solutions Ltd. The
sum and substance of the reasoning adopted by the TPO for considering
this company as comparable is that it is also a software development and
consulting company, meeting the filters adopted by him.
16. We have gone through the Annual report of this company which is
available at pages 24 onwards of the paper book. Schedule no. 16
comprising Notes to the Financial Statements gives background of this
company to be `engaged in development of software and software products
since its inception.' This company consists of STPI unit engaged in
development of software and software products. Page 42 of the paper
book contains segmental information of this company which has been
divided into two parts, namely, `Application software segment' and
`Training segment'. It is the `Application software segment' of this
company, which has been adopted by the TPO. The development of
software and all software products have been clubbed under the
`Application software' segment. Since the figures of this company taken
by the TPO for making comparison with the assessee include the effect of
software products as well, apart from software development services, the
same cannot be considered as comparable for the same reasons as assigned
above for eliminating Avani Cimcon Ltd. A product company cannot be
compared with a company engaged in providing software development
services because of difference in the inherent characteristics of both. We,
therefore, order for the removal of this company from the set of
Infosys Technologies Ltd.
17. The TPO noticed that this company was finding place in the
accept/reject matrix. He found this company to be into software
development services qualifying all the filters applied by him. The
assessee raised certain objections before the DRP against the inclusion of
this company, but without any success. The TPO computed operating
profit margin of this company at 40.41% and included it in the final list of
comparables. The assessee is aggrieved against the inclusion of this
company in the ultimate set of comparables.
18. We are disinclined to sustain the legal objection taken by the ld. DR
that the assessee should be prohibited from taking a stand contrary to the
one which was taken at the stage of the TP study or during the course of
proceedings before the TPO. It goes without saying that the object of
assessment is to determine the income in respect of which the assessee is
rightly chargeable to tax. As the income not originally offered for taxation,
if otherwise chargeable, is required to be included in the total income, in
the same breath, any income wrongly included in the total income, which
is otherwise not chargeable, should be excluded. There can be no estoppel
against the provisions of the Act. Extending this proposition further to the
context of the transfer pricing, if the assessee fails to report an otherwise
comparable case, then the TPO is obliged to include it in the list of
comparables, and in the same manner, if the assessee wrongly reported an
incomparable case as comparable in its TP study and then later on claims
that it should be excluded then, there should be nothing to forbid the
assessee from claiming so, provided the TPO is satisfied that the case so
originally reported as comparable is, in fact, not comparable. The Special
Bench of the Tribunal in DCIT vs. Quark Systems Pvt. Ltd. (2010) 132 TTJ
(Chd) (SB) 1 has also held that a case which was included by the assessee
and also by the TPO in the list of comparables at the time of computing
ALP, can be excluded by the Tribunal, if the assessee proves that the
same was wrongly included.
19. Reverting to the facts of the instant case, we find that the assessee is
only a captive unit rendering services to its AE alone without acquiring
any intellectual property rights in the work done by it in the development
of software. The Hon'ble Delhi High Court in CIT vs. Agnity India
Technologies (P) Ltd. (2013) 219 Taxmann 26 (Del) considered the
giantness of Infosys Ltd., in terms of risk profile, nature of services,
number of employees, ownership of branded products and brand related
profits, etc. in comparison with such factors prevailing in the case of
Agnity India Technologies Pvt. Ltd., being, a captive unit providing
software development services without having any IP rights in the work
done by it. After making comparison of various factors as enumerated
above, the Hon'ble Delhi High Court held Infosys Ltd. to be incomparable
with Agnity India Technologies Pvt. Ltd. The facts of the instant case are
more or less similar inasmuch as the extant assessee is also a captive
service provider with a limited number of employees at its disposal and
also not owning any branded products with no expenditure on R&D etc.
When we consider all the above factors in a holistic manner, there remains
absolutely no doubt in our mind that Infosys Technologies Ltd. is
incomparable to the assessee company. Respectfully following the
judgment of the Hon'ble jurisdictional High Court in Agnity India (supra),
we hold that Infosys Technologies Ltd., cannot be held as comparable with
the assessee company. This company is, therefore, directed to be excluded
from the list of comparables.
Thirdware Solutions Ltd.
20. This company was not chosen by the assessee as its comparable.
However, the TPO, considering it along with Avani Cimcon Ltd. and
KALS Information Systems Ltd. (Seg.), treated it as comparable. The
DRP refused to accept the assessee's contention for the removal of this
company from the list of comparables.
21. We have perused the Annual report of this company which is
available on pages 100 onwards of the paper book. The Profit & Loss
Account of this company is at page 107, which shows `Sales & Other
income'. Bifurcation of `Sales ' is available as per Schedule 12, which
comprises of `Sale of licence' amounting to Rs.39.16 lac, `Software
services' amounting to Rs.7.67 crore, `Export from SEZ unit' amounting
to Rs.26.39 crore, `Export from STPI unit' amounting to Rs.16.88 crore
and `Revenue from subscription' amounting to Rs.92.93 lac. These
figures indicate that apart from the revenue from `Software services'
which is only to the tune of Rs.7.67 crore, this company earned total gross
revenue from `Sales' to the tune of Rs.52.27 crore including from export
from SEZ/STPI units. When we consider the figures of this company on an
entity level as have been adopted by the TPO for comparison, it becomes
vivid that it ceases to be comparable with the assessee's `Software
development and maintenance support services' segment. The reason
hardly needs any highlighting, being the income of this company also
largely including revenues from exports from SEZ/STPI units apart from
sale of licence. These distinguishing features make this company as non-
comparable. We, therefore, order for the removal of this company from
the list of comparables.
Helios and Matheson Information Technology Ltd.
22. This company was included by the assessee in the list of
comparables. Accordingly, the TPO treated it so. The comparability of
this company was not challenged before the DRP. However, for the first
time before the Tribunal, the assessee has come out with a contention that
this company be removed from the list of comparables because it does not
pass the filter of employee cost.
23. We are not inclined to accept this contention advanced on behalf of
the assessee. The ld. DR, with reference to the relevant figures, has pointed
out that this company passes the filter of employee cost. This submission
put forward by the ld. DR, was not controverted on behalf of the assessee.
On a specific query, it was admitted that this company is otherwise
functionally comparable. Under such circumstances, we approve the view
taken by the authorities below in including this company in the final set of
B. Merged back office and F&A support services segment.
24. We have noticed above that the assessee rightly did not agitate the
clubbing of back office support services with F&A support services
segment by the TPO for the purposes of benchmarking. The assessee's
grievance against the computation of ALP under this merged segment is
only confined to not allowing the working capital adjustment and against
the inclusion of two companies in the final set of comparables. Apart from
these, the assessee is satisfied on all other aspects of the computation of the
ALP of this merged set transactions by the TPO.
25. While discussing the `Software development services segment'
above, we have analyzed the otherwise availability of working capital
adjustment and held that such adjustment should be allowed after
verification in terms indicated supra. The same reasons and conclusion
apply mutatis mutandis to this Merged back office and F&A support
services segment as well.
26. The next grievance of the assessee is against the inclusion of two
companies, namely, Cosmic Global Ltd. and Coral Hub (Vishal
Information Technologies Ltd) in the list of comparables. Before deciding
about the comparability or otherwise of these two companies, it is
necessary to go through the functional profile of the assessee under this
segment. Back office support service provided by the assessee include
Policy administration and maintenance and also Contract generation.
Generating insurance contracts for the customers of overseas group entities
and sending them to the respective overseas of Sun Life group entities is
one of the activities performed by the assessee for its AEs. It also
encompasses updating the financial and personnel data of the clients of
overseas group entities. Finance and Accounts support services are in the
nature of financial and accounting support services rendered by the
assessee under the directions issued by Sun Life, Canada. Under the
provisions of both back office support and F&A support services, the
assessee was compensated at cost plus 12.82%. With the above
information about the nature of activities carried out by the assessee under
this merged segment of provision of services, we will now explore as to
whether the above referred two companies are, in fact, comparable or not.
Coral Hub (Vishal Information Technologies Ltd)
27. The assessee chose this company as comparable. As such, no
objection was taken before the TPO against the inclusion of this company.
However, the assessee argued before the DRP that this company was
wrongly included. The DRP refused to accept the assessee's contention.
That is how the assessee is aggrieved before us.
28. We are not inclined to accept the preliminary objections raised by the
ld. DR against the inclusion of this company on the premise that the
assessee had itself chosen it as comparable. The reasons given above
while dealing with the case of Infosys Technologies Ltd., apply with full
force here as well.
29. Coming to its functional comparability of this company, we observe
from the Annual report of this company available at pages 114 onwards of
the paper book that it is outsourcing its major activities. Such outsourcing
charges constitute around 90% of the total operating cost. As against this,
the assessee is engaged in providing the services under this segment at its
own without any outsourcing. This critical difference between the manner
of performing services has an important bearing on the ultimate
profitability. The Delhi Bench of the Tribunal in the case of Mercer
Consulting (India) Pvt. Ltd. Vs. DCIT in ITA No.9666/Del/2014, has
approved the exclusion of this company from the list of comparables by, in
turn, relying on the two Tribunal orders passed by the Mumbai Benches in
Hapag Lloyd Global Services and ACIT vs. Mersk Global Services Centre
(India) Pvt. Ltd. In view of the above reasons and respectfully following
the precedents, we direct to eliminate this company from the list of
Cosmic Global Ltd.
30. This company was included by the assessee in its list of comparables.
However, it was argued before the Tribunal that it be eliminated. In
support of the exclusion of this company, the ld. AR relied on the Tribunal
order passed in the case of Mercer Consulting India Pvt. Ltd. (supra).
31. We have heard the rival submissions and perused the relevant
material on record. It is observed that the Tribunal in Mercer Consulting
India Pvt. Ltd. (supra), has ordered for the exclusion of Cosmic Global
Ltd., from the list of comparables by relying on the fact that the total
revenue of the accounts BPO segment of Cosmic Global Ltd. was very low
at Rs.27.76 lac as against the huge turnover recorded by that assessee. We
have repeatedly laid down that a company which is not comparable with
one company does not per se becomes non-comparable with all other
companies. What is relevant is to see the reasons on which such company
was held to be incomparable in first case. If the same reasons persist in the
case of the later case also, then that company should again be treated as
non-comparable. If however, the reasons which were present while making
comparison in the first case are absent in the second case, then there can be
no exclusion of the company. When we peruse the facts of the instant case,
we find the receipts by the assessee on account of accounts BPO service
segment for the year in question stand at Rs.19.63 lac, which is in close
vicinity with that of Cosmic Global Ltd. This factor which prevailed in
Mercer Consulting India Pvt. Ltd., for excluding this company from the
list of comparables, is not present in the instant case. No other
distinguishing feature in the functional profile of the assessee as well as
Cosmic Global Ltd., was brought to our notice. We, therefore, approve the
view taken by the TPO in including this company in the list of
32. In view of our above discussion, we set aside the impugned order on
the question of determination of ALP under both the segments and remit
the matter to the file of AO/TPO for making a fresh determination of ALP
in consonance with our directions given above. Needless to say, the
assessee will be allowed a reasonable opportunity of being heard in such
33. The only other ground which survives for our consideration in this
appeal is against not reducing lease line charges from `total turnover', after
excluding it from `export turnover'. The assessee claimed the benefit of
section 10A. Considering the mandate of Explanation 2 (iv) to section
10A of the Act, the AO opined that lease line charges amounting to
Rs.2,09,67,887/- were in the nature of telecommunication charges incurred
in foreign currency attributable to delivery of computer software outside
India. He, therefore, reduced this amount from `export turnover'. The
assessee's contention for giving similar treatment to this amount in the
computation of `total turnover', was rejected.
34. After considering the rival submissions and perusing the relevant
material on record, we find force in the contention raised by the ld. AR,
requiring the exclusion of this amount from `total turnover' as well. The
obvious reason is that when a particular item does not form part of export
turnover, which, in turn, is a necessary ingredient of the total turnover, the
same has to be necessarily excluded from the computation of latter. It has
been brought to our notice that the Tribunal in assessee's own case for the
AY 2007-08 has decided this issue in the assessee's favour. A copy of the
order passed by the Tribunal in ITA No.2575/Del/2012 dated 20.6.2014
has been placed on record. The ld. AR also invited our attention to the
judgment of the Hon'ble High Court rendered in the case of the assessee
approving the view taken by the tribunal. Respectfully following the
precedents, we allow this ground of appeal.
35. In the result, the appeal is partly allowed.
36. The order pronounced in the open court on 27.05.2015.
[GEORGE GEORGE K.] [R.S. SYAL]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated, 27th May, 2015.
Copy forwarded to:
4. CIT (A)
5. DR, ITAT
AR, ITAT, NEW DELHI.