M/S. ADOBE SYSTEMS INDIA PVT. LTD.,NOIDA vs. JCIT, NOIDA

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘I-2’, NEW DELHI BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER Assessment Year: 2009-10 Vs. JCIT, Range-1, Noida M/s. Adobe Systems India Pvt. Ltd., Plot No. 1-1A, City Centre, Sector-25A, Noida PAN : AACCA2982J (Appellant) (Respondent) Assessee by Sh. Nageshwar Rao, Adv. Respondent by Sh. H.K. Choudhary, CIT(DR) Date of hearing 25.10.2017 Date of pronouncement 30.11.2017 ORDER PER O.P. KANT, A.M.:

The Hon’ble High Court of Allahabad vide order dated 04/01/2017 has remanded the present appeal of the assessee to the Tribunal for passing a speaking order in accordance with law on ground Nos. 6 and 14 of the appeal, within three months from the date of production of the certified copy of the order before the Tribunal.

“6. The learned AO/TPO/DRP have erred in rejecting certain companies which are comparable to the Appellant and adding certain functionally dissimilar companies to the final set of comparable companies.

S. No. Nature of international Value (in INR) Method Used transactions 1. Provision of software 2,859,782,441 development services TNMM with OP/OC 2. Payment of data linkage 19,875,759 as PLI charges 3. Provision of marketing 138,845,364 TNMM with OP/OC support as PLI 4. Payment of interest on 1,920,838 CUP Method External Commercial Borrowings (“ECB”)

4.1 In the transfer pricing study, the assessee selected 21 comparables for software development service segment and worked out OP/TC at 11.42% as against 18.29% in its own case. In marketing support service segment, the assessee selected 13 comparables and worked out OP/TC at 9.87% as against 26.06% in its own case . 4.2 The learned TPO made detailed analysis of the functional profile of the assessee and the comparables suggested by the assessee. He excluded certain comparables out of the list of comparables of the assessee and also included certain comparables to the said list of comparables to optimize the comparability of the assessee. The learned TPO agreed with analysis undertaken by the assessee for all international transaction with its AEs except software development services and provision of marketing support services, wherein he proposed adjustment as under:

S. Nature of international transaction Adjustment under No. section 92CA Provision of software development services Rs.33,39,88,898 Provision of marketing support services Rs.2,35,01,986 Total Rs.35,74,90,884 4.3 The assessee filed objections before the Ld. DRP. The Ld. DRP included/excluded certain comparables out of the set of the comparables selected by the Ld. TPO, which resulted into reduction in adjustment under both the segments of software development services and marketing support services as follows

S. No. Nature of international transaction Adjustment under section 92CA 1. Provision of software development Rs. 18,73,02,909 services 2. Provision of marketing support Rs. 1,18,51,961 services 3. Total Rs. 19,91,54,870 4.4 Aggrieved, both the assessee and the Revenue filed appeal before the Tribunal. 5. Under ‘software development services’ segment out of the list of comparable suggested by the assessee, the learned TPO rejected few comparables, however the Ld. DRP, allowed request of the assessee for retaining following two comparables:

1. 1. Quintegra Solutions Ltd.

2. Zylog Systems Ltd. 5.1 The Revenue in its appeal challenged retaining (inclusion) of the above two comparables by the Ld. DRP. 5.2 Further, under the ‘software development services’, out of the list of the comparables included by the learned TPO, the DRP considered objections of the assessee and directed to retain/reject comparables as follows:

1. Bodhtree Counselting Ltd. Rejected 2. FCS Software Solutions Ltd. Retained 3. Infosys Technologies Ltd. Retained 4. Tata Counseltancy Services Retained

5.3 Before the Tribunal, the assessee in ground No. 6 challenged retaining (inclusion) of above comparables except FCS Software Solutions Ltd. The Revenue challenged the direction of the DRP to reject (exclude) the comparable, namely, Bodhtree Counselting Ltd. 5.4 The ground of the Revenue challenging the exclusion of comparable, namely, Bodhtree Consulting Ltd. under software development services has been allowed in favour of Revenue by the Tribunal in ITA No. 1004/Del/2014. 5.5 Under the marketing support service segment also, the learned DRP did not accept the contention of the assessee for excluding few comparables, which the assessee challenged in ground No. 6 filed.

6. Thus, in ground No. 6 of the appeal, which we have reproduced above, the assessee challenged comparables under both segments i.e. ‘software development service’ and ‘marketing support service’. The Tribunal in order dated 10th of August, 2016 allowed exclusion of the two comparables under marketing support services segment, namely, ‘Aptico Ltd’ and ‘TSR Darashaw’, however, no finding was given in respect of following four comparables retained by the Ld. DRP under ‘software development services’:

6.1 In background of the above facts, both parties have been heard. 6.2 Addressing the ground No. 6 before us, the learned counsel of the assessee submitted that consequent to the order of the Tribunal, TP adjustment relating to market support services segment got deleted and department’s appeal against the deletion is pending consideration before the Hon’ble High Court of the Allahabad. 6.3 We find that Hon’ble High Court has restored back the entire ground No. 6 of the appeal of the assessee. The ground No. 6 is in respect of rejection of certain comparables and addition of certain functionally dissimilar companies to the final set of comparable companies. Thus, ground No. 6 is both in respect of software development services and marketing support services. Now, the position is that on one hand the appeal of the Department against the exclusion of the comparables under marketing support service (part of ground No. 6 of the appeal of the assessee) is pending before the Hon’ble High Court of Allahabad, but on the other hand, entire ground No. 6 of the appeal of the assessee has been restored back to the Tribunal. In the circumstances, we do not deem it proper to adjudicate in respect of the comparables excluded under the ‘marketing support service’ segment and confine ourselves to the comparables challenged under software development service due to following reasons:

1. 1. The assessee made plea before the Hon’ble High Court that its argument in respect of the comparables has not been considered by the Tribunal and on said plea the Hon’ble High Court has restored the matter back to the Tribunal. Evidently, the plea of the assessee was in respect of comparables under the software development service and not in respect of marketing support service.

2. The Tribunal has already given finding in respect of marketing support service and that finding has been challenged by the Revenue, which is pending before the Hon’ble High Court .

6.4 In the circumstances, as far as ground No. 6 of the appeal of the assessee is concerned, we restrict ourselves to comparables retained by the Ld. DRP and challenged by the assessee under software development services. 6.5 Before us, the Ld. counsel challenged exclusion of the following five comparables, which we are discussing as under:

Bodhtree Consulting Ltd 6.5.1 The learned counsel submitted that the comparable is functionally dissimilar to the assessee and it is engaged in vide array of services including product engineering, analytics and cloud and Enterprises services with no segment results. The learned counsel further submitted that company has shown abnormal growth and peculiar circumstances in the year under reference. He also submitted that said comparable is excluded by the Tribunal, Delhi bench in the case of Cadence Design Systems (India) Private Ltd. in for assessment year 2009-10 and in the case of Cienna India in ITA No. 1453/Del/2014 for AY 2009-10. 6.5.2 The Ld. CIT(DR), on the other hand, opposed that this comparable was already excluded by the Ld. DRP in favour of the assessee and the assessee cannot be said to be aggrieved by the said direction. He said the Revenue was aggrieved and accordingly challenged before the Tribunal, and the appeal of the Revenue has not been allowed by the Tribunal. Therefore, the assessee cannot challenge exclusion of the said comparable in proceedings remitted by the Hon’ble High Court. We have heard the rival submission of the parties. We agree with the contention of the Ld. CIT(DR). Since this comparable was already excluded by the Ld. DRP, and assessee was not aggrieved with the said direction of the Ld. DRP, the assessee could not have challenged this exclusion in ground No.

Infosys Technologies Ltd. 6.5.3 The Ld. counsel requested for exclusion of the company due to the reason that it is engaged in various products and insufficient segmental information is available in the annual report. He further submitted that the comparable fails on filter of ‘onsite revenue earned’ proposed by the Ld. TPO. Other reasons for exclusion of the comparable were submitted by the Ld. Counsel as high turnover, industry giants and significant intangible assets and having high brand value. He further submitted that the said comparable company has been excluded by the ITAT Delhi bench in the case of Sun Life India Service Centre Private Limited (ITA No. 1489/Del/2014). 6.5.4 The Ld. CIT(DR), on the other hand, referred to page 6 of the order of the ld. TPO and submitted that assessee was not merely routine software development service provider, but it was engaged in developing new products through research and development activity for its AE. He also referred to page 61 to 66 of the order of the Ld. TPO and submitted that AE has registered/applied for the patents having source in India, which established that the assessee has provided significantly value- added services to its AE, capable of generating patents for the associated enterprises in US. He submitted that remuneration has to made at much higher level as the economic ownership of the intellectual property intangibles vest with assessee. 6.5.5 Regarding the argument of the Ld. counsel that the comparable company is engaged in various products, the Ld. CIT(DR) submitted that assessee is also engaged in development of various products . On the issue of the high turnover and industry giants, the Ld. CIT(DR) submitted that the assessee is also not a small captive service provider and it is having turnover of more than Rs. 285 crores and having economic ownership of intangibles. 6.5.6 We have heard the rival submission and perused the relevant material on record. We find that the ITAT in assessment year 2008-09 has rejected the Infosys as comparable mainly on the ground of functional dissimilarity. The Tribunal held that Infosys Ltd. is a full risk bearing Entrepreneur entity engaged in diversified activity. The Tribunal relying on the decision of Agnity India Technologies Private Limited vs. ITO, (AY 2006-07) order dated 04.11.2010, held that turnover by itself may not be sufficient to accept or reject a company but it could lead to examination of functional differences, if any. 6.5.7 But in the case before us, from page 65 of the Annual Report of the company (page 938 of the paper book), we find that during the year the company has shown income from software service and products. Further, on page 80 of the Annual Report (page 953 of the paper book) under the head ‘segment reporting’, it is reported that the company’s operations predominately relate to provide end-to-end business solutions that leverage technology, thereby enabling clients to enhance business performance delivered to customers globally operating various industry segments and accordingly segment information in respect of operation in industries and geographic location has been provided.

6.5.8 When we compare the activity of the instant assessee, we find from the transfer pricing study as under: “a) Adobe India provide engineering, research and development services to Adobe US . Adobe India also performs design, development, support improvement in enhancement services for Adobe US products (para-4.2.1 on page 22 of the TP study) b) Adobe India undertakes, the coding and documentation function with respect to the software modules that it develops ( page 24 of the TP study) c) Adobe India is responsible for day-to-day project management and the end deliverables with respect to the models of the software being developed by it.( Page 24 of the TP study) d) Adobe India undertakes quality control procedure with respect to the software modules developed by it. ( Page 24 of the TP study) e) Adobe India also performs unit test for the software modules developed by it.( Page 25 of the TP study).´ 6.5.9 Though, in the TP study the assessee has furnished that conceptualization and design of the software are being done in the supervision or direction of the ‘Adobe US’ and the assessee’s having limited role in these activities, but, in our opinion, it is evident from the transfer pricing study, as far as development of software modules is concerned, the assessee also plays a dominant role. The learned TPO in the order has brought on record that the assessee has not provided the details of software developed or designed and conceptualizations was done abroad and development work was done in India. He also mentioned that details of software developed completely and description of functions in India and abroad was not provided to him despite numerous opportunities given to the assessee. The assessee has even not brought any such evidences before us.

6.5.10 In such circumstances, on the basis of the evidence before us, we conclude that the function of the assessee company becomes similar to the comparable company, who develops products for the client and provide service in respect of those products. 6.5.11 As far as argument of the high turnover of the comparable (Rs.20,264 crores) as compared to turnover of the assessee (Rs. 285 crores), is concerned, we place our reliance on the decision of the Hon’ble Delhi High Court in the case of Agnity India Technologies Private Limited Vs. ITO (supra) wherein it is held that turnover by itself may not be sufficient to accept or reject the company until functional differences exist. Since in the instant case, we do not find any functional differences between the assessee and the comparable company, we are not inclined to reject the comparable mainly on the basis of the turnover. Further, we note that the learned TPO on page 63 of the order has brought on record that the ‘Adobe Systems INC’, has filed 5 patents in calendar year 2009 and 17 patents in calendar year 2010 having originated in India. The learned TPO has further given finding on the economic ownership of the intangibles as under: “It is seen as per clauses of software Research Agreement dt. 01.09.1997 the legal ownership of R&D intangibles developed by the assessee in India automatically gets transferred to the Associated Enterprises without any compensation i.e. by the application of these clauses of the agreement the associated Enterprises becomes legal owner of the intangibles developed by the assessee in India. It is pertinent to mentioned here that the assessee has developed these intangibles in India and had borne cost and risk and had used its asset. Accordingly, the economic ownership of the intangibles is with the assessee. It is now well accepted principle that local economic ownership of intangible can be created separately & distinctly from the legal ownership of parents, trademarks etc. The assessee claim that the Associated Enterprise is the legal owner of the intangibles may be correct, but the economic ownership of the intangible is with the assessee.

That during the period 2008-09 number of patents have been developed with India origin and legal ownership of these patents have been transferred to its AE as per the agreement without any compensation because the compensation model of cost plus 15% is not adequate to compensate the assessee for the functions performed by it because it not include return associated with economic ownership of intangibles.”

6.5.12 We agree with the fact that the assessee has developed these intangibles in India and transferred to the AE, who is registered as legal owner. Thus, though the legally assessee is not owner of the intangibles, but it has carried out all functions to generate intangibles, and thus it becomes functionally similar to the comparable company who has also generated intangibles during the year. The assessee also deserves to be compensated for generation of the intangibles similar to the intangible exploited by the comparable. 6.5.13 Next argument of the learned counsel for rejection of the comparable is on-site filter. The learned counsel submitted that during the year under consideration the comparable earned 49.3% of the revenue from on-site activities. In our opinion, by providing the staff at the site of the client is akin to making the staff available for exclusive work of the client. We find that the assessee also acts as captive service provider for its AE. In both the cases the ultimate function which is carried out is of the software development services. We find that in this manner, the on-site activity of the comparable does not make any functional difference between the assessee and the comparable. 6.5.14 The learned TPO has brought on record in the order that the assessee has employed 1367 employees out of which 1342 employees were engaged in providing software development services. He further submitted that most of the employees were having educational qualification like B Tech/ B. Engg./M Tech/software development professional, MBA etc, and thus the profile of the employees showed that they were performing high-end services of research and development and not routine services . 6.5.15 We find that in the kind of activity carried out by the assessee and the comparable, most of the assets required are human resources and IT infrastructure. The Ld. counsel has not brought out any significant change in the ratio of the human resources or IT infrastructure in terms of the turnover of the assessee and comparable. Similarly, the Ld. counsel has not brought out impact of risks undertaken by the assessee and comparable on the profit level indicator. 6.5.16 Further, the cases relied upon by the assessee are not applicable over the facts of the instant case as the functions carried out and the economic interest in the products developed by the assessee are different as compared to the entities in the cases relied upon by the assessee. Since function of the comparable company and the assessee may differ from year to year, the decision of Tribunal in earlier year, for not treating the company as comparable, cannot be taken as binding precedent. 6.5.17 In view of above discussion, we direct the learned TPO to retain M/s Infosys Technologies Ltd. as one of the comparable to the assessee.

Tata Consultancy Ltd: 6.5.18 The Ld. counsel submitted that income of the said comparable comprising revenue from sale of equipment and software license alongwith revenues from information technology and consulting services. He also submitted that the company is engaged in various products and fails onsite filter proposed by the learned TPO itself. The Ld. counsel referred to page 1056 of the paper book and submitted that the comparable company has acquired certain companies during the year which is having impact on the Profit Level Indicator of the comparable company and thus in view of the extraordinary event during the year, the company cannot be compared with assessee company. Other reasons for exclusion of the said comparable submitted include high turnover, industry giant, significant brand value and significant intangible assets. The Ld. counsel submitted that the company has been excluded by the Tribunal Delhi bench in the case of Sun Life India service Centre private limited (ITA No. 1489/Del/2014). He also submitted that the company should be excluded relying on the assessee’s own order of the Tribunal for assessment year 2008-09 for rejecting of Infosys. 6.5.19 The learned CIT(DR), on the other hand, submitted that the acquisition/merger during the year has not affected the revenue operation during the year and it has not affected the economy of the business. 6.5.20 We have heard the rival submissions and perused the relevant material on record. We find from pages 105 of the Annual Report (page 1138 of the assessee’s paper book) that the company has shown income from information technology and consultancy services of Rs.21,535 crores and bifurcations of information technology and consultancy service has not been provided in the annual report. We also find that the revenue of the assessee include sale of equipment and software licenses, amounting to Rs. 868.25 crores. Thus, in absence of segment result of consultancy and information technology, the result of the company cannot be compared with the result of the assessee company. Further, from the page 23 of the annual report of the comparable (page 1056 of the assesses paper book), we find that during the year the company has acquired ‘Citi Group Inc’ (citi) 96.26% interest for a total consideration of USD 504.54 million. The annual report has mentioned as under: “this acquisition is not only helped in acquiring new capabilities in the banking domain, but has also underscored the importance of TCS’s long- term, sustainable relationship with large customer including city. This acquisition complements TCS’s domain expertise and has brought in new capabilities to TCS that will help drive growth going forward.” 6.5.21 Thus, it is evident that acquisition made by the company during the year has affected its profit level indicator and thus being an extraordinary event, the company cannot be considered as comparable with assessee company during the year. Accordingly, we direct the Ld. TPO/AO to exclude the above company out of the set of the comparables under software developments services segment.

Wipro Ltd 6.5.22 The learned counsel submitted that during the year the company has acquired ‘Wipro Technology Service Ltd.’ in January 2009 and subsidiaries of the company have been merged with the holding companies in USA. He submitted that the company was engaged in diversifying business operations and during the year revenue from software development was only 40%. He said that the company has also shown income from BPO services and consulting services. The Ld. counsel also submitted that the company is dissimilar to the assessee company in view of significant intangible assets, significantly large scale of operations and industry giant and having significant brand value. The learned counsel submitted that the company has been excluded as comparable by the Tribunal Delhi bench in the case of Ciena India Private Limited (ITA No. 1489/Del/2014 for assessment year 2008-09. He also submitted that comparable should be excluded relying on the decision of the Tribunal in assessee’s own case for assessment year 2008-09 for rejecting of Infosys. 6.5.23 The learned CIT(DR), on the other hand, submitted that the comparable company is functionally similar to the assessee company and having significant R&D activity. He further submitted that amalgamation during the year has not affected the PLI of the comparable. 6.5.24 We have heard the rival submission and perused the relevant material on record. We find from page 70 of the Annual Report of company that the company is leading India-based provider of IT service including business process outsourcing (BPO) and further it has other businesses such as IT products and customer care and lighting. In the financial statements no separate segment has been provided in respect of sale of the customer care and lighting products. In absence of such segment result, the entity level result of the company cannot be compared with the assessee. Further on page 49 of the Annual Report (page 1304 of the paper book) of the company following details have been provided in respect of acquisitions and mergers: 1. Acquisitions In January 2009, the Company acquired 100% shareholding in India based Citi Technology Services Limited (subsequently renamed as Wipro Technology Services “WTS”) for a purchase consideration of US $ 127 Million. WTS is an India based provider of information technology services and solutions to Citi Group worldwide. WTS has a strong competency in Technology Infrastructure Services (TIS), application development and maintenance services (ADM) for cards, capital markets and corporate banking. The acquisition will enhance Wipro’s capabilities to compete for both TIS business and ADM business in the financial service industry. (Note 5 in the Notes to Accounts of the annual parent financial statements.) 2. Merger of certain subsidiaries. In March 2008, Pursuant to the scheme of amalgamation approved by the Honorable High Court of Karnataka and High Court of Judicature at Bombay, the Company had merged mPower Software services India Private Limited (‘mPower’), mPact Technology Service Private Limited (‘mPact’) and cMango India Private Limited (‘cMango’) with the Company retrospectively from April 1, 2007, the Appointed Date. mPower, mPact and cMango were fully held by Wipro Inc., which in turn is a wholly owned subsidiary of the company. In the current year, pursuant to the scheme of amalgamation, the Company has allotted 968,803 fully paid equity share with a market value as on April 1, 2007 of Rs.542 Million as consideration to a Wipro Inc. Trust to be held for the benefit of Wipro Inc. (Note 6 in the Notes to Accounts of the annual parent financial statements). 6.5.25 Thus, it is evident that acquisition and mergers has enhanced the capability of the company. This being an extraordinary event during the year under consideration, the company cannot be compared with assessee company. Accordingly we direct the AO/TPO to exclude above company from the list of the comparables.

Zenith Infotech Ltd: 6.5.27 The learned counsel submitted that the company is engaged in various products and no segment information is available in the Annual Report of the company. He submitted that company has shown growth of 76.35 percent as compared to previous year and thus this being exceptional years in terms of financing performance the company should be excluded as comparable. He also submitted that Tribunal in assessment year 2008-09 has excluded the company as comparable. The ld. CIT(DR), on the other hand, submitted that the comparable company is functionally similar to the assessee company. 6.5.28 We have heard the rival submission and perused the relevant material on record. The management discussion and analysis of the comparable company on pages 1401 of the paper book, reads as under:

“The Company's business comprises of domestic and overseas operations: During the year the overseas operations of the company registered strong growth. Revenues from our overseas operatiosn doubled to Rs. 183.72 crores from Rs. 97.33 crores during the previous year. This growth was driven by the sales of the company’s SAAZ remote management software,-Virtual NOC remote management service and the backup and disaster recovery (BDR) product line. Being a software product company, the company sells Its products through a vast network of resellers In North America, UK and Australia. The company's reseller network grew from approximately 1,500 resellers at the end of 2007-2008 to more than 3,000 resellers at the end of 2008- 09. The number of enterprises using the companies SAAZ product and Virtual NOC service increased from approximately 10,000 at the end of 2007-2008 to over 22,000 customers at the end of 2006-2009. With respect to re the company's BDR product, the number of Installations Increased from approximately 3,000 at the end of 2007- 200810 over 9,000 at me end of 2008-2009. Towards the end of the financial year, the company launched a new product in the backup and disaster recovery rent called ARCA (Advanced Recovery and Continuity Appliance). ARCA is a business continuity product designed for mid- market and enterprise customers as compared to the company's BDR product which is meant for SMB (small and medium business) customers. In the current year the company is launching its SmartStyle computing line of products targeted towards the upcoming Cloud Computing segment. As of now the product is in trial with over 50 customers and the company anticipates launching this product towards the end of 2009."

6.5.29 Thus, it is evident that growth during the year is on account of the sales of software product. We find that the assessee is also engaged in supplying services as well as software products to its AE, the function of the assessee are comparable to the comparable company and thus it cannot be excluded merely on the ground that it is having higher profit during the year. No other reason has been raised by the assessee for excluding the above company. In view of above, we direct the Ld. AO/TPO to retain the above comparable in the list of comparables under software development service segment.

7.3 Ld. CIT(DR), on the other hand, relying on the order of the lower authorities submitted that assessee cannot make a request for working capital adjustment at the stage of the Tribunal. 7.4 We have heard the rival submission and perused the relevant material on record. We find that the assessee has requested for allowing working capital adjustment, which the learned TPO has discussed on page 55 of his order. Similarly the Ld. DRP has also discussed the objection of the assessee against denial of working capital adjustment while adjudicating ground 11 and 12 of the objections of the assessee. The Ld. DRP held that adjustment of functional differences if any can be made only if those differences can be ascertained accurately and their impact on the margins can be assessed with reasonable accuracy and in absence of this information it was impossible to quantify the adjustment of such difference. 7.5 In view of the above finding, is evident that the claim of working capital adjustment has not been made for first time before the Tribunal. Further we find that the working capital adjustment has been allowed to the assessee by the Tribunal in assessment year 2008-09 as under:

“18. Having gone through the above cited decision, we find that in the case of Navsite India Pvt. Ltd. Vs. Income Tax Officer (supra), the ITAT after discussing the issue in detail has restored back the issue to the files of the learned TPO for making the working capital adjustment to the profit margins of comparables after affording opportunity to demonstrate that there was difference in the levels of working capital employed, vis-à-vis the comparables. Following the same, we hold that the opening working capital deployed and the closing working capital deployed has to be taken into consideration for making any adjustment to the working capital deployed in the case of a comparable, of course, the assessee for availing the above benefit has to demonstrate that there was difference in the levels of working capital employed, vis-a-vis, the comparables. We thus set aside the matter to the file of the TPO to decide the issue accordingly after affording opportunity of being heard to the assessee. The ground no. 8 is thus allowed for statistical purposes.”

7.6 The assessee submitted that in assessment year 2011-12 and assessment year 2012-13 the learned TPO himself has allowed the working capital adjustment. The Ld. CIT(DR) has not disputed this fact. 7.7 In view of the above, following the Rule of Consistency and finding of the Tribunal in the case of the assessee for assessment year 2008-09, we direct the Ld. AO/TPO to give effect of the working capital adjustment to the working capital employed by the comparables. Thus, we set aside and restore the issue of allowing working capital adjustment to the file of the Ld. AO/TPO for deciding after affording opportunity of being heard to the assessee.