SUNTEC BUSINESS SOLUTIONS PRIVATE LIMITED,CHENNAI vs. DEPUTY COMMISSIONER OF INCOME TAX, CHENNAI

The brief facts of the case emanating from the records are that the assessee is a private limited company and a leading service provider of relationship-based pricing and centralized billing solutions for Banking, Financial Services & Insurance (BFSI), Communication, Media & Entertainment (CME) and Utilities industries and provides comprehensive solutions for measuring and monitoring transaction value, enabling tighter control on profitability. The assessee leverages on its extensive domain experience and successfully defines designs and delivers cost effective solutions.

For the year under consideration, the assessee filed its return of income on 15.02.2021 declaring total income of Rs.13,70,56,520/- under the normal provisions of the Act, and book profit of Rs.13,81,60,684/- u/s.115JB of the Act. The case of the assessee was selected for complete scrutiny. A reference was made for determination of arm’s length price (‘ALP’) in respect of international transactions entered into by the assessee with its associated enterprises (hereinafter referred to as ‘AEs’), as reported in Form 3CEB filed by the assessee, after providing an opportunity of being heard to the assessee and approval from the competent authority. The Transfer Pricing Officer (“TPO”) passed an order u/s.92CA(3) of the Act in the case of the assessee on 12.04.2023 making the TP Adjustment in respect of Sale of Software Product and Services segment and further made a downward adjustment in respect of the Salary expenditure incurred by the Company (page 23 of TPO Order) which was incorporated in the draft Assessment order dated 29.09.2023 in addition to disallowing the Health & Education Cess, provision relating to reversal or write- off of provisions which were claimed as expenditure in the return of income while making adjustment in respect of interest on amounts in foreign bank accounts held by the assessee and withdrawing certain amount of the Foreign Tax Credit claimed by the assessee (page 34-45 of the draft Assessment Order).

The assessee being aggrieved filed objections before the Dispute Resolution Panel (“DRP”) and the DRP provided a partial relief to the assessee vide its directions dated 28.06.2024. The TPO passed an order dated 10.07.2024 giving effect to the directions issued by the DRP. Accordingly, the Final assessment order dated was passed 28.07.2024 was passed by the AO making the following transfer pricing and corporate tax adjustments:

The assessee being aggrieved by the above addition / disallowance sustained in the said Final Assessment Order has preferred the subject appeal before us by raising the following grounds of appeal :.

The Assessee had also filed two additional grounds – (i) in relation to the limitation issue (ROCA Bathroom case) and (ii) order passed on a non-existent entity. These additional grounds are not pressed.

At the outset, the ld.AR press on Ground no. 4.5 that the TPO/DRP have erred in not applying the upper turnover filter to reject high turnover companies, while on the other hand, have rejected companies with lower turnover of less than one (1) Crore. The ld.AR submitted that the assessee in its TP study (Page 105 of PB Vol-1) selected 9 comparable companies in respect of Software Development Services segment.

The TPO applied certain filters and selected 13 comparable companies in the SWD Services segment. The list of the final set of comparables selected by the TPO is provided in page 20-21 of the TP order.

Accordingly, the TPO determined the 35th Percentile at 15.09 percent based on the profit margins computed for the 13 comparable companies in SWD Services segment. A summary of the margin computed and ALP determined is provided in the table below (Page 14-16 of TPO Order):

The assessee objected to the application of absence of cap on the higher turnover filter before the DRP which was rejected by the DRP vide page 10-18 of its directions.

With respect to exclusion of comparable companies on upper turnover filter, the ld.AR submitted that as per the Dun & Bradstreet classification of software industry, the companies could be classified under three (3) major heads depending on the turnover of the company viz.,

The turnover of assessee for the relevant assessment year in the SWD segment is Rs.136.86 Crores (page 14 of TP order) and therefore would fall under the category of small size company having turnover in the range of Rs.1 crore to Rs.200 crores. Therefore, the companies not falling within the range i.e., companies having turnover less than Rs.1 crore or turnover more than Rs.200 crores deserve to be excluded.

We observe that, out of the 13 companies selected by the TPO (page 20- 21 of the TP order), the following 5 companies would be excluded by applying the aforesaid turnover filter:

18 Page 249 & 387/395 Mindtree Limited 7,764.30 Page 249 & 574 Tata Elxsi Ltd

63 Page 249 & 412 Cybage Software Pvt. Ltd. 1,609.68 Page 249 & 409

The ld.AR placed a reliance on the decision of the Cochin Tribunal in the Assessee’s own case of for the AY 2016-17 (IT(TP)A No.01/Coch/2021) and AY 2017-18 (IT(TP)A No.04/Coch/2022), wherein the Tribunal after considering the decision of the Bengaluru Tribunal in the case of Autodesk India (P) Ltd [2018] 96 taxmann.com 263, has concluded that companies having turnover more than Rs.200 Crores cannot be considered as comparable to a small company.

The Ld.DR argued that the turnover range 01/10thx – 10x times turnover filter should be applied instead of the Rs.1 cr – 200 cr and >Rs.200 cr range as per Dun & Bradstreet study.

The ld.AR submitted that the Tribunal has discussed both the methods (1/10th-10x and 1-Rs 200 cr range) in the case laws of Autodesk (Supra) and Galax E Solutions India Pvt Ltd (2022) 140 taxmann.com 579 (Bang-Trib.) and held that the Rs.200 crore criteria should be followed. The same approach has been followed in the Assessee’s own case for AY 2016-17 and AY 2017-18. Therefore, the ld.AR submitted that the Rs.200 turnover range methodology should be followed.

In addition to the above, the ld.AR relied on following judicial precedents which have upheld that companies with significantly higher turnover cannot be compared to companies with very small turnover:

In case the said ground 4.5 is allowed in favor of the assessee, the margin of the assessee would fall within the 35th percentile of the comparable set and the TP adjustment with respect to software segment would not sustain. Hence the other grounds become academic in nature and are not pressed.

We have heard the rival submissions perused the material available on record and gone through the orders of the authorities along with paper book filed and case laws relied upon. The limited controversy pressed before us in Ground No. 4.5 relates to the action of the TPO in applying a lower turnover filter of Rs.1 crore while not applying any upper turnover filter for selecting comparable companies in the Software Development Services ("SWD") segment.

The assessee is engaged in providing software development services to its Associated Enterprises and, for the relevant assessment year, reported operating revenue of Rs.136.86 crores from the SWD segment. The assessee's grievance is that while the TPO excluded companies having turnover below Rs.1 crore, companies having extraordinarily high turnover running into several hundreds and thousands of crores were retained in the final comparable set.

From the record, we note that the TPO selected thirteen comparable companies and determined the arm's length margin after rejecting the assessee's contention regarding the application of an upper turnover filter. The companies objected to by the assessee on this count are:

18 Mindtree Limited 7,764.30 Tata Elxsi Ltd

63 Cybage Software Pvt. Ltd. 1,609.68

The principal contention of the assessee is that, as per the Dun & Bradstreet classification, software companies are broadly classified into small, medium and large companies based on turnover, and companies having turnover in excess of Rs.200 crores cannot be regarded as comparable to companies having turnover below that threshold. Reliance has also been placed on the decisions of the Tribunal in the assessee's own case for Assessment Years 2016-17 and 2017-18 (supra).

We find merit in the submissions advanced on behalf of the assessee. It is now well settled through a series of judicial pronouncements that turnover is a relevant factor for determining comparability in the software development services sector. Companies possessing substantially higher turnover enjoy significant economies of scale, stronger market presence, diversified customer base, greater bargaining power, brand value, access to resources and risk- bearing capacities which materially influence their profitability. Such companies cannot ordinarily be compared with captive service providers operating on a :-9-:

We further note that the Cochin Bench of the Tribunal in the assessee's own case for Assessment Years 2016-17 and 2017-18 (supra), after considering the decision of the Bangalore Bench in Autodesk India (P.) Ltd. and other judicial precedents, accepted the applicability of an upper turnover threshold of Rs.200 crores and directed exclusion of companies exceeding the said limit. The Revenue has not brought on record any contrary decision in the assessee's own case or any distinguishing feature warranting a departure from the view already taken by the Coordinate Bench.

The argument of the Revenue that a turnover range based on one-tenth to ten-times the assessee's turnover should be adopted instead of the Rs.200 crore threshold does not persuade us. We find that the issue has already been examined in several decisions wherein the Rs.200 crore turnover benchmark has been consistently accepted in the case of software development service providers. Judicial discipline requires us to follow the view consistently adopted in the assessee's own case in the absence of any change in facts or law.

Considering the turnover of the assessee at Rs.136.86 crores, we hold that companies having turnover exceeding Rs.200 crores cannot be considered as proper comparables for benchmarking the international transaction relating to software development services. Accordingly, the following companies are directed to be excluded from the final set of comparables:

The AO/TPO is directed to recompute the arm's length margin after excluding the aforesaid companies from the comparable set. The ld.AR submitted that upon exclusion of the above companies, the assessee's margin would fall within the permissible arm's length range and consequently no transfer pricing adjustment would survive in the SWD segment. Since the recomputation exercise is required to be carried out by the TPO, we direct the TPO/AO to verify the computation and determine whether the assessee's margin falls within the prescribed range under section 92C read with Rule 10CA. If, upon such recomputation, the assessee's margin falls within the arm's length range, the transfer pricing adjustment in the SWD segment shall stand deleted.

In view of our decision on Ground No.4.5, and considering the submission of the ld.AR that the remaining transfer pricing grounds were not pressed and would become academic in the event of acceptance of the turnover filter contention, the other grounds relating to the SWD segment do not call for adjudication and are left open. Accordingly, Ground No.4.5 is allowed for statistical purposes.

The expenditure pertains to the salary cost of global sales personnel allocated to the group entities without any mark-up, in proportion to revenues of the entities in view of their services being utilized by all the group entities. The assessee submitted the following documents before the lower authorities substantiate the cost allocation and demonstrate the evidence of service as well as the need-benefit:

However, the submissions of the assessee in respect of evidence of benefit were disregarded by the TPO and the ALP of the said transaction was determined as NIL.

In this regard, the ld.AR submitted that the Chennai Tribunal has ruled in favor of the Assessee in respect of the subject issue in the Assessee’s own case for the A.Y.2021-22 vide ITA No.3252/Chny/2024 (at paras 8 to 11). The ld.AR further submitted that the aforementioned salary cost forms part of the AE segment as the transaction is intrinsically and closely connected to the “sale of software products and services to AE”. Further, the salary cross-charge is part of the operating cost base of the SWD segment which has been benchmarked to be at Arm’s Length by application of the TNMM method, which has also been accepted by the TPO. Accordingly, the acceptance of the net margin for the SWD segment (which includes the salary cross charge), renders the action of the TPO in separately culling out the salary cross charge and making a separate adjustment, unjustifiable. In this regard, the ld.AR relies on the following decision: a. Magneti Merelli Powertrain India Pvt Ltd [2016] 75 Taxmann.com 213 (Delhi); SLP filed by Department dismissed by SC (15244 of 2017) b. Bostik India (P.) Ltd. [2022] 140 taxmann.com 153 (Bangalore - Trib)

Without prejudice to the above, the ld.AR submitted that the determination of ALP of the cross-charge as NIL by the TPO/DRP is not justified. In this regard, the assessee placed reliance on the following decisions:

Accordingly, the ld.AR submitted that no downward adjustment is to be made in respect of the cross charge.

Per contra the ld.DR relied on the orders of the authorities and submitted that the assessee had failed to establish the actual rendition of services and the benefit derived from the alleged services of global sales personnel. Accordingly, the ld.DR supported the determination of ALP at NIL.

We have heard the rival submissions perused the material available on record and gone through the orders of the authorities along with case laws relied on. The issue arising for consideration is with regard to the transfer pricing adjustment made by the TPO/DRP by determining the arm’s length price of the salary cost cross-charged in respect of global sales personnel at NIL.

The facts, in brief, are that the expenditure pertains to salary cost of global sales personnel, which was allocated amongst the group entities without any mark-up, in proportion to the revenues of the respective entities. The case of the assessee is that the said global sales personnel were rendering sales, business development and strategic support services for the benefit of all group entities and, therefore, the cost was allocated on a reasonable and scientific basis. The assessee had placed on record the following documents before the lower authorities to substantiate the cost allocation, rendition of services and need-benefit arising from such services. The TPO, however, disregarded the above evidences and held that the assessee had not demonstrated the receipt of actual services and the benefit derived therefrom. On that basis, the arm’s length price of the said transaction was determined at NIL. The DRP confirmed the approach of the TPO. The assessee is in appeal before us.

We find merit in the submissions of the ld.AR. It is not in dispute that the salary cost was cross-charged without any mark-up. It is also not in dispute that :-13-:

The lower authorities have rejected the assessee’s claim primarily on the ground that the assessee did not prove specific benefit in monetary terms. In transfer pricing proceedings, the assessee is required to demonstrate the nature of services, rendition thereof and the basis of charge. However, once such evidence is produced, the TPO cannot sit in the armchair of a businessman and decide whether the assessee ought to have availed such services or whether the benefit derived was adequate in the opinion of the Revenue. The benefit test cannot be applied in a manner so as to substitute the commercial wi om of the assessee by that of the TPO. The TPO is required to determine the ALP by applying one of the prescribed methods and by carrying out a proper benchmarking exercise. Determination of ALP at NIL, without bringing on record any comparable uncontrolled transactions or any material to show that an independent enterprise would not have paid for such services, is not sustainable.

More importantly, in the present case, the impugned salary cross-charge is not an isolated or standalone transaction divorced from the assessee’s business operations. The said cost is intrinsically and closely linked to the sale of software products and services to AEs. The salary cost forms part of the operating cost base of the relevant AE/SWD segment. The said segment has been benchmarked by the assessee under TNMM and the TPO has accepted the segmental margin as being at arm’s length. Once the TPO has accepted TNMM as the most appropriate method for the relevant segment, after

The above view is supported by the judgment of the Hon’ble Delhi High Court in the case of Magneti Marelli Powertrain India Pvt. Ltd.,(supra) wherein it has been held that where TNMM has been accepted as the most appropriate method for benchmarking the international transactions, the TPO cannot pick out one element of the transaction and apply a different method to benchmark that element separately. Similar view has also been taken in Bostik India (P.) Ltd., (supra) wherein it was held that interlinked and interdependent payments forming part of the main business activity cannot be benchmarked separately when TNMM has been accepted for the aggregated transaction.

We also take note of the decision of the Hon’ble Delhi High Court in EKL Appliances Ltd., (supra) wherein it was held that the Revenue authorities cannot question the commercial expediency of the assessee’s business expenditure while determining ALP. The TPO may examine whether the price is at arm’s length in accordance with law, but he cannot determine the ALP at NIL merely because, in his view, the assessee did not derive sufficient benefit. The same principle has been reiterated in the decisions relied upon by the assessee, including Fosroc Chemicals India (P.) Ltd. and Tudor India (P.) Ltd.(supra).

We, further find that the coordinate Bench of this Tribunal, in the assessee’s own case for AY 2021-22 in ITA No.3252/Chny/2024, has considered an identical issue relating to salary cost of global sales personnel allocated amongst group entities without mark-up. The coordinate Bench, after examining the debit notes, employee pay-slip, details of strategic win, allocation work and other evidence, held that the salary cost was intrinsically and closely connected with sale of software products and services to AEs and formed part

In view of the above discussion, we hold that the TPO/DRP erred in determining the ALP of the salary cost cross-charge at NIL. The assessee has furnished evidence in support of rendition of services, the basis of allocation, and the business nexus of the expenditure. Further, the cost forms part of the operating cost base of the AE/SWD segment, whose margin has already been accepted as arm’s length under TNMM. Therefore, separate benchmarking of the impugned cost and determination of its ALP at NIL is not justified. Accordingly, the transfer pricing adjustment made in respect of the salary cost cross-charge of global sales personnel is deleted. The grounds raised by the assessee on this issue are allowed.

The assessee has claimed total deduction of Rs.2,24,57,438/- as other deduction in schedule BP of ITR filed for the subject AY as follows:

During the assessment, the assessee has submitted the ITR extract of disallowances (PB page number – 477-479) made in earlier years u/s.36(1)(via)

Further the ld.AR would like to place reliance on the following judicial precedence:

In the case of reversal of provision for disputed indirect taxes amounting to Rs.57,82,460/-, the ld.AR submitted the follwoing details: (PB page number – 480-482)

Hence it is evident that, the assessee has already disallowed the provision for disputed taxes at the time of creation (i.e., Rs.78,53,282/-); which is to be greater than the amount of reversal (Rs.57,82,460/-).

Hence, he submitted that since disallowance again in this AY 2020-21 will result in double disallowance of the same item, the ld.AR prayed that the disallowance in this year be deleted. Merely because the full set of ITR of the earlier years is not provided, when the ITR extract showing the disallowance is provided, this cannot be a reason to disallow the provision reversal. Records of previous years are anyways with the AO.

Per contra, the ld.DR relied on the orders of the authorities and prayed for dismissing the grounds of appeal of the assessee.

We have carefully considered the rival submissions and perused the material available on record. The issue involved in the present ground relates to the disallowance of a sum of Rs.2,24,57,438/- claimed by the assessee as deduction under the head "Other Deduction" in Schedule BP of the return of income for Assessment Year 2020-21, comprising (i)reversal of provision for disputed taxes amounting to Rs.57,82,460/- and (ii)reversal/write-off of provision for bad and doubtful debts amounting to Rs.1,66,74,978/-.

The contention of the assessee is that the aforesaid provisions were created in earlier assessment years and, at the time of their creation, the same had already been disallowed while computing taxable income. Consequently, when such provisions were reversed or written back during the year under consideration, the corresponding amount was claimed as deduction so as to neutralize the earlier disallowance and avoid taxation of the same amount twice.

From the documents placed before us, it is noticed that the assessee has furnished extracts of the returns of income of earlier years evidencing that provision for bad and doubtful debts aggregating to Rs.1,65,83,285/- (AYs

The AO has primarily rejected the claim on the ground that complete returns and supporting records of earlier years were not furnished. In our considered view, once the assessee has placed on record prima facie evidence demonstrating that the provisions had already suffered disallowance in the years of creation, the claim cannot be rejected merely on technical grounds without undertaking verification from departmental records. It is well settled that the Revenue cannot subject the same amount to tax twice merely because the reversal takes place in a subsequent year.

The Hon'ble Karnataka High Court in Commissioner of Income-tax v. ING Vysya Bank Ltd. (448 ITR 94) (supra) has recognized that where a provision for bad and doubtful debts had not been allowed as deduction earlier, its subsequent write-back cannot again be brought to tax, as such treatment would result in double taxation of the same amount. Similar principles have been reiterated by the Hon'ble Karnataka High Court in Big Bags International (P.) Ltd. v. DCIT (430 ITR 434), (supra) wherein it was held that an amount already subjected to tax or disallowed in an earlier year cannot once again be taxed merely on account of reversal of the accounting entry.

The substance of the matter is that taxability must be determined having regard to the real income and real deduction principles. If a provision has already been disallowed while computing income in the year of creation, the subsequent reversal thereof does not generate any fresh taxable income. Conversely, denying deduction in the year of reversal would effectively result in the same amount being disallowed twice, which is impermissible in law.

At the same time, the allowability of the claim depends upon factual verification of whether the corresponding provisions were indeed disallowed in the earlier years and whether the amount claimed during the year does not exceed the aggregate of such earlier disallowances. Since the assessee has furnished relevant extracts of the returns evidencing such disallowances and the departmental records are also available with the Revenue, the matter is capable of objective verification.

Accordingly, we hold that the assessee would be entitled to deduction in respect of reversal/write-off of provisions to the extent such provisions had already been disallowed in the years of creation and no deduction thereof had been allowed earlier. We therefore set aside the impugned disallowance and restore the matter to the file of the AO for the limited purpose of verifying the assessee's claim with reference to the returns of income, computation statements and assessment records of the earlier years. Upon such verification, if it is found that the provisions now reversed had already been disallowed while computing taxable income in the preceding years, the corresponding deduction claimed during the year under consideration shall be allowed in full. Needless to say, adequate opportunity of being heard shall be afforded to the assessee.

The assessee had claimed relief u/s.90/90A amounting to Rs.98,28,675/- on account of taxes paid outside India. However, the AO has not allowed the same stating that the certificate of tax payment has not been submitted. The extracts of FTC amount denied are as under: Relief claimed Income from Tax Paid Name of Country/ Specified Territory but denied outside India 49,43,550 United States of America 49,43,550 2,28,41,082

The AO in the remand report as well as the DRP has erroneously denied the credit on the basis that the tax certificate from concerned tax authorities is not submitted (Para 26.2 and 26.3 of the DRP directions).

In this regard, the ld.AR submitted that during the year, the assessee has earned income from the abovementioned overseas countries and had suffered taxes in the overseas countries. Since the said income is also taxed in India, the assessee is eligible to claim of deduction of FTC in India. The relevant extract of Rule 128 – Foreign Tax Credit in this regard is as follows:

As per Rule 128, it is evident the following documents are sufficient for granting FTC for taxes suffered in the overseas countries.

Further the ld.AR stated that the taxes were paid directly to the Treasury and was not a deduction from a customer invoice; for which tax deduction certificate is not available, and has submitted copies of online bank challan payment of taxes during assessment (PB page number – 456-466 and 475- 476). Hence the assessee is in compliance with Rule 128 for granting of FTC. Therefore, the ld.AR submitted that the AO be directed to allow the deduction of FTC as claimed in the return of income by the assessee.

Per contra, the ld.DR submitted that the assessee had not furnished the certificate as required under Rules and hence the authorities have rightly disallowed the credit of FTC.

We have carefully considered the rival submissions and perused the material available on record. The grievance of the assessee is against the denial of Foreign Tax Credit (FTC) amounting to Rs.98,28,675/- claimed in respect of taxes paid in the United States of America, United Kingdom and :-22-:

The undisputed facts emerging from the record are that the assessee had earned income from the aforesaid foreign juri ictions, which was subjected to tax in those countries and has also been offered to tax in India. The assessee had claimed relief u/s.90/90A of the Act by filing Form No.67 and had furnished the computation of foreign income, details of taxes paid abroad and supporting evidences in the form of online tax payment challans and banking records.

The controversy before us is therefore confined to the narrow issue as to whether the claim of FTC can be denied solely on the ground that a tax payment certificate from the foreign tax authority was not furnished. Rule 128(8) of the Income-tax Rules prescribes the documentary requirements for claiming FTC. The Rule contemplates furnishing of Form No.67 along with a certificate or statement specifying the nature of income and amount of tax deducted or paid. Significantly, clause (ii) of Rule 128(8) recognizes three alternative modes of evidencing payment of foreign taxes, namely, a certificate from the foreign tax authority, a certificate from the person responsible for deduction of tax, or a statement signed by the assessee accompanied by prescribed evidences such as acknowledgement of online payment, bank counterfoil, challan, or proof of deduction.

Thus, the Rule itself does not mandate that only a certificate issued by the foreign tax authority can establish payment of foreign taxes. The Rule expressly permits the assessee to substantiate the payment through a self- certified statement accompanied by evidence of payment. Therefore, the interpretation adopted by the AO and the DRP, requiring production of a tax

In the present case, the assessee has placed on record copies of Form No.67 duly filed, details of foreign income offered to tax, computation of FTC, and copies of online tax payment challans evidencing remittance of taxes to the foreign treasury. The explanation of the assessee that the taxes were paid directly to the foreign Governments and were not taxes withheld by customers has also not been controverted by the Revenue. Consequently, the absence of withholding tax certificates cannot be a valid ground for denial of the claim.

It is also pertinent to note that the object of Sections 90 and 90A is to eliminate double taxation of the same income. Once the income earned abroad has been subjected to tax in the foreign juri iction and has also been offered to tax in India, the relief contemplated under the DTAA cannot be denied merely on account of a hyper-technical interpretation of procedural requirements, particularly when substantive evidence of payment of foreign taxes has been furnished.

The Revenue has not disputed either the quantum of foreign income offered to tax in India or the actual payment of taxes abroad. The denial is based solely on the alleged non-furnishing of a particular form of evidence. In our considered view, procedural requirements are intended to aid verification and cannot defeat a substantive claim where the factum of tax payment is otherwise demonstrable from the records. Accordingly, we hold that the assessee has substantially complied with the requirements of Rule 128 by furnishing Form No.67 together with supporting evidences of payment of foreign taxes. The FTC claim, therefore, cannot be denied merely because a certificate from the foreign tax authority was not produced.

We accordingly set aside the findings of the lower authorities and restore the matter to the file of the AO for the limited purpose of verification of the evidences already furnished by the assessee regarding payment of taxes in the respective foreign juri ictions and computation of eligible credit in accordance with the applicable DTAA provisions. Upon such verification, the AO shall grant the foreign tax credit to the extent admissible under law. Needless to state, reasonable opportunity of being heard shall be afforded to the assessee. This ground of appeal is allowed for statistical purposes.

Since, the assessee has not pressed the other grounds of appeal raised in the appeal, we refrain from adjudicating the same.

In the result the appeal of the assessee is partly allowed for statistical purposes.