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TMI Blog2016 (7) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee s appeal is directed against the order of the Assessing Officer dated 27.02.2015 passed u/s.143(3) r.w.s.92CA(4) of the Act, which is emanated from direction of the Dispute Resolution Panel (DRP), Chennai dated 29.12.2014 u/s.144C(5) of the Act pertaining to assessment year 2010-11. 1.1 The Revenue s appeal is directed against the order of DRP passed u/s.144(5) dated 29.12.2014 and correspondingly, the assessee fled a Cross Objection in C.O.No.86/Mds./2015. First we take up Revenue s appeal in ITA No.1289/Mds./15 2. On perusing the appeal, we find that the AO had filed the appeal with delay of 29 days. The learned AO has submitted a Petition dated 27.05.2015 seeking condonation of delay and the AO stated in this petition that the delay of 29 days in filing the appeal before this Tribunal is on account of mixing up of papers in his office and it took time to locate the same and as soon as he traced the records, he filed the appeal on 27.05.2015. In our opinion, the reasons explained by the AO for filing the appeal belatedly is bonafide. Accordingly, the delay is condoned. 3. In this case, the assessee considered M/s.Quintegra Solutions Limited (Quintegra) as compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Interest on term loan - 81,15,618 Add: Fringe Benefit Tax - Total Operating Expenses 37,11,20,078 Total Operating Profit 27,84,758 Operating profit/operating cost 0.75% Further, he submitted that Quintegra is not continuously loss making, but its operating profit is as follows:- Financial Year Percentage of Operating profit 2007-08 21.74% 2008-09 (-) . 62% 2009-10 Not available at the time of assessment Further, he relied on the judgement of Co-ordinate Bench of Hyderabad in the case of Brigade Global Services P. Ltd., in ITA No.1494/Hyd./2010 vide order dated 26.11.2012 wherein observed that regarding loss making company is as follows:- 26. We have heard both the parties on these comparabs. The contention of the assessee is that the loss making companies were not to be taken out from the comparables while det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the red and not because the nature of business had any variance with that of the assessee. When we look into the business segment of Capital Trust, we find that in the foreign consultancy segment, which we are concerned with, in the year 2004-05, it had OP/OC at 27.25%. Since the nature of services are rendered by the comparable was exactly on the similar lines, as that of the assessee, though, during the year, it was in loss, cannot be disqualified as not a legitmate comparable. We are well supported by the decision, cited by the Authorized Representative of assessee, in the case of Brigade Global (Supra), relevant portion of which has already been reproduced earlier in the order, we hold that the assessee had rightly taken Capital Trust as a valid comparable and the revenue authorities erred in excluding the same. This order of the Mumbai Tribunal was confirmed by the Mumbai High Court in ITA No.2222 of 2013 dated 04.04.2016. Thus, according to him, the loss in case of Quintegra is not operating loss, but only because of non operating expenses claimed by the Quintegra. 6. We have heard both the parties and perused the material on record. On careful consideration, we take n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly. 7. The next ground in this appeal is that the DRP erred the AO to exclude to reduce same amounts which has reduced from export turnover from total turnover also for computing the deduction u/s.10AA relying upon the decision of the Special Bench of ITAT Chennai in the case of M/s.Sak Soft Ltd reported in (2009) 30 SOT 55(Chennai)(SB) against which the Deparment filed appeal u/s.260A before the Hon ble Madras High Court. 8. After hearing the ld.D.R and perusing the materials on record, it appears that the Ld. Assessing Officer was of the view that since the Revenue was on appeal against the decision of the Chennai Special Bench in the case of Sak Soft Ltd., (supra) before the Hon ble Madras High Court, he need not follow that decision. Further, it is not the case of the Revenue that the judgment of the Chennai Special Bench in the case of Sak Soft Ltd., (surpa) is stayed by the Madras High Court. It is pertinent to mention that in the absence of any stay granted by the by the Hon ble Madras High Court against the operation of the judgment of the Chennai Special Bench in the case of Sak Soft Ltd., (surpa), all the lower judiciaries being quasi judicial authorities are bound ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 234B, section 234C and section 234D of the Act. As regards ground No.4, interest U/s. 234B, 234C 234D is consequential and mandatory in nature and to be charged accordingly 9.4 Ground No.5 in Title C is regarding initiation of penalty u/s.271(1)(c) of the Act. The assessee cannot have any grievance at this stage on this issue as it is too premature at this stage, the ground is dismissed. 10. The assessee s appeal is partly allowed. 11. Next we take up Assessee s C.O in C.O No.86/Mds./15 In the Cross objection, the assessee raised the ground that the Tribunal shall not admit the appeal of the Revenue as time barred. This issue has already been disposed in Revenue s appeal. Hence, accordingly, this ground is dismissed. 11.1 Further, the assessee has raised various grounds relating to inclusion or exclusion of various comparables and also relating to various Transfer Pricing adjustments. In our opinion, these grounds are infructuous in view of our findings in corresponding Revenue s appeal. Further, we make it clear that at this stage we do not go to the legality of filing the Cross Objections by the assessee. 12. In the result, the appeal of the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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