SH. EVALUESERVE.COM PRIVATE LTD.,NEW DELHI vs. ITO, NEW DELHI

2. The assessee has raised the following grounds of appeal:-

1. That on the facts and in the circumstances of the case and in law, the order passed by the Ld. Assessing Officer ( AO") is bad in law and void ab-initio.

3. That on the facts and in the circumstances of the case and in law, the Ld. AO erred in making an addition of Rs. 16,24,01,920/- to the returned income of the Appellant by re-computing the arm's length price of the international transactions under section 92 of the Act.

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4. That on the facts and in the circumstances of the case and in law, the Ld. AO/ Ld. TPO/ Ld. Dispute Resolution Panel ("DRP") erred on facts and in law in determining the arm's length price of the international transactions of the Assessee by :

(a) not adopting the set of comparables selected by the assessee in its Transfer Pricing Study; (b) making erroneous inclusion and exclusion in the set of comparable companies by using erroneous quantitative filers in the search process; (c) using the data of the Financial Year 2005-06 for the comparable companies despite the same being not available to the Assessee at the time of preparation of the documentation under Rule 10D of the Income-tax Rules, 1962; (d) by not accepting the Assessee's selection of comparables carried out during the assessment proceedings based on data of the Financial Year 2005-06; (e) by not allowing any economic adjustment for difference in capacity utilization level of the Assessee and the comparables; (f) by not allowing any economic adjustment for difference in working capital of the Assessee and the comparables; and (g) the Ld. DRP erred in disregarding the Commissioner of Income Tax (Appeals) order for Financial Year 2004-05 wherein the 3 E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 arm's length pricing of the international transactions of the appellant were upheld on similar issues and facts.

6.1 That on facts and circumstances of the case and in law , the Ld. A.O have erred in limiting the deduction u/s 10A of the Act on the gross total income rather than profit and gains of the eligible undertaking (without any set-off of the brought forward losses).

6.2 That on facts and circumstances of the case and in law, Ld. DRP erred to adjudicate on the submissions filed by appellant company on Ground No. 7 of DRP and failed to pass the speaking order.

7 That the Ld. AO erred in facts and in law in charging and computing interest under section 234B, 234D and 244A of the Income Tax Act, 1961.

8 On the facts and circumstances of the case, the Ld. DRP has erred in not examining the validity of initiation of penalty proceedings u/s 271(l)(c).”

i. In its business information segment its analysts cover a range of industries including banking, insurance, telecommunication, Pharma, and biotechnology, chemicals, energy, consumer goods. It uses primary and secondary sources to conduct this research and analysis in this segment. Its research capabilities include industry and value chain analysis, in-depth analysis of customer segments, products channels technologies competitive benchmarking, monitoring and customizing E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 newsletters forecasting modeling and financial analysis, database content creation and management updating of existing research commercialization analysis and business plans. Broadly, it provides services under following segments:- ii. Under the intellectual property segment, the services are provided for patents, drafting, prior art search, and intellectual property asset management. The assessee is in old in carrying out patent assessment, intellectual property research, and analysis, patent consulting, and preparing draft patent application to be filed overseas. This research is delivered overseas to associated enterprises, which is an arrangement with the team of lawyers for filing of the patent applications in the appropriate jurisdiction. It also offers intellectual property asset management and helps in analyzing portfolio patents. It offers assistance on patent overlap infringement and in finding potential companies, which would be interested in licensing a particular invention. iii. In its equity research and financial analysts segment. It focuses on global mutual fund and equities. It involves tricking the performance of specific stocks and mutual funds and analyzing it. The background ties compiled and provided to the clients, which include mainly investment banks etc. This work is E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 customized according to the requirements of the clients in the specific request received by them. iv. In its market research activities. It provides moist based support for conducting telephone customer service in different parts of the world and formulation of preliminary hypothesis based on the surveys. It has extensive primary research capabilities, including the ability to conduct research in multiple languages.

is dismissed.

16. Ground No. 2 of the appeal of the assessee is with respect to the jurisdictional error that the Ld. assessing officer has not recorded any reasons in the draft assessment order for reference to the Ld. transfer pricing officer for computation of the arm‘s length price under section 92CA (1) of the income tax act, 1961. The Ld. authorized representative did not press any argument for this ground and therefore we dismiss it.

17. Ground No. 3 of the appeal of the assessee is against the order of the Ld. assessing officer against addition of Rs. 162401920/- to the returned income of the appellant on account of the arm‘s length price of the international transactions under section 92 of the income tax act. Ground No. 4 of the appeal of the assessee is contesting various issues with respect to the transfer pricing adjustment and ground No. 5 of the appeal of the assessee is with respect to the denial of the benefit of 5% margin under the proviso to section E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 92C (2) of the income tax act. Therefore, as the ground No. 3, 4 and 5 are related to the transfer pricing adjustment they are taken together. 18. Assessee has also made a request for admission of additional ground of appeal vide application dated 24/01/2017. According to that, the assessee raised a legal ground based on facts already on record for exclusion of two comparables namely, vishal information technologies Ltd and Alpha Geo (India) p Ltd. It was submitted that though the transfer pricing adjustment has been contested in its totality assessee would like to raise this specific ground of appeal. He submitted that there are no fresh facts required to be adduced and it goes to the root of the matter and therefore it may kindly be admitted and adjudicated upon. To support its argument for admission of the ground, assessee relied on the decision of the Hon‘ble Supreme Court in the case of National Thermal Power Corporation 229 ITR 383 (SC). He further submitted that these two comparables are not functionally comparable and therefore cannot be used as comparable for the comparability analysis of the international transactions of the assessee. He further relied upon the decision of the special bench in the case of Deputy Commissioner of Income Tax versus Quark systems private limited ITA No. 100/CHD/2009. Therefore, he impressed that the above ground of appeal may kindly be admitted.

19. Ld. departmental representative vehemently objected to the admission of the additional ground stating that this is the new claim being made by the assessee. He further submitted that the assessee himself has taken the above two functionally comparable companies and therefore there is no reason that E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 why these two companies can be excluded as they are functionally comparable. He further submitted that assessee is also a KPO and providing high end IT enabled services and therefore is functionally comparable. He further submitted that if assessee now pleads that functional profile of assessee is different than there is a fresh investigation of fact required and hence the additional ground of appeal raised by the assessee should not be admitted.

20. The Ld. authorized representative contested that regarding the transfer pricing matter (i) Vishal information technologies Ltd and (ii) Alpha Geo India Limited should be excluded. For this, he submitted that Vishal information technologies Ltd is a knowledge process outsourcing company and cannot be compared with the assessee. He submitted that in assessee‘s own case for assessment year 2007 -08 that clear cut finding is given that assessee is engaged in low end service/BackOffice enabled ITES support services and hence cannot be compared to a knowledge process outsourcing unit. He further referred to the decision of the Hon‘ble Delhi High Court in case of Rampgreen solutions Ltd 377 ITR 533 wherein it has been stated that Vishal information technologies Ltd is a KPO and has discussed this comparable in detail and stated that it cannot be compared to companies engaged in low and services/BackOffice enabled ITES support services. He further referred to the plethora of decisions wherein this comparable company has held to be engaged in KPO business.

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“9. In addition to the above two issues, one more issue is raised for our consideration. This is raised by the assessee as an additional ground of appeal

. It is assessee‘s contention that one of the independent comparable which has been included by the assessee as also by the TPO has been wrongly included in the comparable for more reasons than one. Firstly, according to the assessee, in the case of Data Matrix Technologies Ltd., out of total sales of Rs. 54.85 crores, its transactions with the associated concern amount to Rs. 17.15 crores which works out to 31.27 per cent of the total sales made by the Datamatics Technologies Ltd. The assessee submits as is the accepted transfer pricing practice in terms of O.E.C.D. guidelines, as also sanction by law in India, such transactions with the associated parties cannot be considered as uncontrolled transactions. It is also submitted that there is an arithmetical error on account of which operating expenses of Rs. 579 crores were not taken into account while aggregating total expenditure as a result of which the original profit to cost ratio worked out to 138.46 per cent. The assessee‘s contention is that the inclusion of this comparable, which takes into account profit on cost at 138.46 per cent has vitiated the transfer pricing analyses. It is submitted that this mistake is an inadvertent mistake and in any event since the CIT(A) had balance sheet of the Data Matrix Technologies Ltd. before whom he ought to have been taken into account the correct position. Without prejudice

19. E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 to the argument that Datamatics Technologies Ltd., for the above reasons, should not be included as a comparable at all. The assessee also contends that in any event revised operating margin to cost ratio is 93.06 per cent which would have been taken into account in the computation of mean profit and comparable entities. In effect, thus, we are also called upon to adjudicate, subject to admission of this additional ground so raised by the assessee, as to whether or not Datamatics Technologies Ltd. should be excluded from the comparables.

XXXXX “27. We can now proceed to consider the question of exclusion of Datamatics from the list of comparable in computation of arm‘s length price. The relevant facts have been stated by Shri Aggarwal and it is an admitted position that some fundamental mistakes have been committed in computation of the profit ratio as well. It will indeed be gross miscarriage of justice, if we allow these mistakes to be perpetuated. We further add that all the data, to which reference has been made by Shri Aggarwal is available in the balance sheet of Datamatics and is part of record available in public domain it will not be correct to have lope-sighted view and make selection of such figure as would serve one‘s purpose. Every detail in the process for determination of fair arm‘s length price, as is relevant, has to be considered so that a fair view is adopted.

Relevant provisions of Transfer Pricing

28. At this stage, we deem it necessary to refer to the relevant Indian Regulations on Transfer Pricing and to some case laws.

29. Under rule 10B of Income-tax Rules, provision is made for various methods for determination of arm‘s length price. Clause (e) of this rule relates to the step required to be taken where Transactional Net Margin Method (TNMM) is applied. Sub-clause (i) of the said sub-rule is as under:

E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 "10B. Determination of arm’s length price under section 92C.

(e) transactional net margin method, by which— (i )the net profit margin realized by the enterprise from an international transaction entered into with an associated enterprise is computed in relation to costs incurred or sales effected or assets employed or to be employed by the enterprise or having regard to any other relevant base:"

The aforesaid sub-clause has been reproduced only to emphasize that even under TNMM Indian Regulations attach considerable significance to "assets employed or to be employed" and must be taken into consideration; then sub-rule (2) of rule 10B requires application of FAR test for judging comparability of international transaction with uncontrolled transaction and is as under :

10B(2) For the purposes of sub-rule (1), the comparability of an international transaction with an uncontrolled transaction shall be judged with reference to the following, namely— (a )the specific characteristics of the property transferred or services provided in either transaction; (b )the functions performed, taking into account assets employed or to be employed and the risks assumed, by the respective parties to the transactions; (c )the contractual terms (whether or not such terms are formal or in writing) of the transactions which lay down explicitly or implicitly how the responsibilities, risks and benefits are to be divided between the respective parties to the transactions; E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 (d )conditions prevailing in the markets in which the respective parties to the transactions operate, including the geographical location and size of the markets, the taws and Government orders in force, costs of labour and capital in the markets, overall economic development and level of competition and whether the markets are wholesale or retail.

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It is true that the assessee itself had included that dividend income in is return for the year in question but there is no estoppel in the Income-tax Act and the assessee having itself challenged the validity of taxing the dividend during the year of assessment in question it must be taken that it had resiled from the position which it had wrongly taken while filing the return. Quit apart from it, it is incumbent on the Income-tax Department to find out whether a particular income was assessable in the particular year or not. Merely because the assessee wrongly included the income in its return for a particular year, it cannot confer jurisdiction on the department to tax that income in that year even though legally such income did not pertain to that year.

Mr. Brijlal Gupta appearing for the department pointed out that the assessee itself filed separate returns for the two parts of a single accounting period. The assessee applied for registration for the first period only. The assessment for the second period proceeded as against an unregistered firm. It was, therefore, urged by Mr. Gupta that it is not open to the assessee to urge now that a single assessment under section 26(1) ought to have been made. Now, there cannot be an estoppel against statute. If in fact the procedure adopted by the Income-tax Officer was incorrect, the defect is not cured by the attitude taken up by the assessee.

On the question of the admissibility of the deduction of Rs. 1,23,719, the contention of the appellant is that as the respondent had itself split up the commission of Rs. 3,12,699 paid to the managing agents, 23 E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 and appropriated Rs. 1,23,719 thereof to the profits earned at Karachi and had debited the same with it, it was not entitled to go back upon it, and claim the amount as a deduction against the Indian profits. We do not see any force in this contention. Whether the respondent is entitled to a particular deduction or not will depend on the provision of law relating thereto, and not on the view which it might take of its rights, and consequently, if the whole of the commission is under the law liable to be deducted against the Indian profits, the respondent cannot be estopped from claiming the benefit of such deduction, by reason of the fact that it erroneously allocated a part of it towards the profits earned in Karachi. What has, therefore, to be determined is whether, notwithstanding the apportionment made by the respondent in the profit and loss statements, the deduction is admissible under the law.

The decision in Amarendra Narayan Roy v. CIT AIR 1954 Cal. 271 has no bearing on the question raised before us. There the concessional scheme tempted the assessee to disclose voluntarily all his concealed income and he agreed to pay the proper tax upon it. The agreement there related to the quantification of taxable income but in the present case what is sought to be taxed is not a taxable income. The assessee in such a case can certainly raise the plea that his income is not taxable under the Act. We, therefore, reject this plea.

In practice, neither countries nor taxpayers should misuse the burden of proof in the manner described above. Because of the difficulties with transfer pricing analysis, it would be appropriate for both taxpayers and tax administrations to take special care and to use restraint in relying on the burden of proof in the course of the examination of a transfer pricing case. More particularly, as a matter 24 E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 of good practice the burden of proof should not be misused by tax administrations or taxpayers as a justification for making groundless or unverifiable assertions about transfer pricing. A tax administration should be prepared to make good faith showing that its determination of transfer pricing is consistent with the arm‘s length principle even where the burden of proof is on the taxpayer, and the taxpayers similarly should be prepared to make good faith showing that their transfer pricing is consistent with the arm‘s length principle regardless of where the burden of proof lies.

38. Accordingly, on facts and circumstances of the case, we hold that taxpayer is not estopped from pointing out that Datamatics has wrongly been taken as comparable. While admitting additional ground of appeal raised by the assessee to require us to consider whether or not Datamatics should be included in the comparable, we make no comments on merit except observing that assessee from record has shown its prima facie case. Further claim may be examined by the Assessing Officer. This course we adopt as objection to the inclusion of Datamatics as comparable has been raised now and not before revenue authorities. Therefore, we deem it fit and proper to remit the matter to the file of the Assessing Officer for consideration of claim of the taxpayer and make a de novo adjudication of the arm‘s length price after providing reasonable opportunity of being heard to the assessee. We order accordingly.

39. We have, however, also noted that the very basis of selection of comparables and application of filters leaves lot to be desired. As we have noted earlier as well, the transfer pricing was in the initial stages in this year and we are inclined to take a rather liberal approach by 25 E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 giving assessee an opportunity to make out its case properly and place all the relevant facts before the tax authorities so that proper arm‘s length price can be determined in accordance with the law the proceedings before the tax authorities are not adversarial proceedings and the assessee should not, therefore, be placed at under advantage because of his inadvertent and bona fide mistakes. With this objective in sight, and having no led inconsistencies in selection of compatibles, while we uphold the exclusion of Imercius from comparables, we also deem it fit and proper to remit the matter to the file of the Assessing Officer for adjudication de novo in the light of the above observations and in accordance with the law. We direct the assessee to place all the relevant material before the Assessing Officer and/or Transfer Pricing Officer and fully co-operate in expeditious disposal of the matter in accordance with the law. The matter stands restored to the file of the Assessing Officer as such. [ Extracted from taxmann.com , Underline supplied by us] 30. On perusing the above decision it is apparent that assessee was allowed to resile from the comparable selected by it for the reason that a. those were the initial years of T P assessments , b. the assessee showed that related party transaction in the comparables case were 31 % and c. there was error in computation of margin of comparables. . d. Further in that case assessee resiled from that comparable before Tribunal in 2009 where the appeal for AY 2004-05 was being heard. 31. However in the present case we are deciding the appeal of the assessee for AY 2006-07 in 2017 i.e. after 11 years and the appeal of the assessee has already travelled once before the coordinate bench and twice before ld DRP. Further before us it is also not stated that for what reason assessee is resiling from the earlier stand . No errors or misreading originally is also pointed out before us with respect to both the comparables. Assessee has also not pointed out that how these comparables were originally selected and 26 E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 now it is said that they are functionally dissimilar. Hence, merely making a reference about their functional dissimilarity without pointing out specific functional dissimilarity in the function of assessee vis a vis comparable prima facie, assessee cannot be allowed to resile from comparables selected by it. This shows that assessee has taken government machinery for a ride for 11 years. Therefore the claim of the assessee for admission of additional ground is on weak footing except that assessment year involved is AY 2006-07 which is very near to the Assessment year ( AY 2004-05) for which appeal is decided by the special bench in DCIT V Quark Systems P Ltd. (supra), holding that those were the initial years of T P Assessments. Coordinate bench has not laid down a law that anytime and every time assessee can resile from a comparable. Therefore , after pointing out above facts, respectfully following we admit the additional ground of appeal

of the assessee in interest of justice.

32. Now, there are issues with respect to the determination of functional profile of the assessee whether it is high End Service provider or low-end service provider. The LD AR has argued on the premises that assessee is a low end I T Enabled service provider based on para no 5 of the order of the coordinate bench for AY 2007-08 where as the revenue has submitted that assessee is a high end ITES services provider and is engaged in the business of Knowledge management services relying on para no 43 of the order of the coordinate bench in case of the assessee for AY 2005-06. In ITA E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 No 393/Del/2010 and Co No 85/Del/2010 dated 30/9/2016 for AY 2007-08 it has been held that :- ―38. Ld. counsel pointed out that assessee is only in data calculation and there is no value addition at assessee's end. Assessee actually acts as support service provider. Ld. counsel relied on the decision of the Hon'ble Delhi High Court in the case of Rampgreen Solution Pvt. Ltd. Vs. CIT (ITA no. 102/2015 dated 10.08.2015) 377 ITR 533, wherein the Hon'ble Delhi High Court has noted with reference to the decision of Special Bench of the Tribunal in Maersk Global Centers (India ) Pvt. Ltd. (ITA 7466/Mum/2012), that there might be a case where an entity may be rendering a mix of services, some of which may be functionally comparable to KPO while other services may not. In such case, classification of BPO and KPO may not be feasible. Accordingly, it was held that no strait jacket formula can be applied. Further, it was held that in case where the categorization of services rendered cannot be defined with certainty, it would be apposite to employ the broad functionality test and then exclude uncontrolled entities, which were found to be materially dissimilar in aspects and features that have a bearing on the profitability of those entities.

39. It was further held that where the controlled transactions were clearly in the nature of low-end ITES such as call centres etc., for rendering data processing not involving domain knowledge, inclusion of any KPO service provider as a comparable would not be warranted.‖ E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07

XXXX ―43. Nothing has been brought on record to controvert the findings recorded by ld. CIT(A). It is not disputed that assessee is not in software development services and is primarily providing IT enabled services to its AEs. In the TP study it has been described as high end IT enabled service because the assessee conducts research activity and provides knowledge management services to its AEs. But this could not be compared with a company which was engaged in software development services. The assessee's essential service were IT enabled services only. We, accordingly, confirm the order of ld. CIT(A) on this count.‖ [ Emphasis supplied by us] 33. In for assessment year 2007 – 08 coordinate bench in assessee‘s own case vide para No. 5 has held as under:- ―5. We have perused the submissions advanced by both the sides in the light of the records placed before us. On perusal of the order of this tribunal in assessee‘s own case for assessment year 2005 – 06 in ITA No. 393/del/2010, we also that assessee has been treated as a low and ITES service provider, rendering data processing erred in IT enabled services who is not involved in domain knowledge so as to include any Year service provider as a comparable (refer paragraph 38 – 39 of the decision).‖ 34. On reading of the above decision it is apparent that coordinate bench in its order for AY 2007-08 while reading the orders for AY 2005-06 of the E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 coordinate bench in case of the assessee, has entered in to an error by not looking at the para no 43 of the order, where findings are contained, where in it has been held that assessee is high end ITES services provider in its T P Study report because the assessee conducts research activity and provides knowledge management services to its AEs. The coordinate bench has looked at the reference and finding in case of Maersk Global Centers (India ) Pvt. Ltd. (ITA 7466/Mum/2012) in para no 38 and 39 of that judgment and has held that assessee is a low end ITES service provider. According to us those paras of order for AY 2005-06 do not contain the finding about the functional profile of the assessee. Assessee has submitted at page no 245 onwards of the paper book order of Ld TPO for Ay 2005-06 where in where in at para no 2 ld TPO has described the business description of the assessee and at para no 2.3 assessee has mentioned the description of the assessee‘s business as under :- ― The assessee is engaged in the business of providing high end IT enables services to its associated enterprises. the company is registered with software technology of the government of India. The assessee conducts research activities and provides knowledge management services to its associated enterprises.‖ The above functional profile matches with the website information submitted by the ld DR (source:- www.financewalk.com/work-evalueserve-jobs-review). Looking at the order of the ld TPO for impugned AY 2006-07, we could not E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 find, on the basis of services mentioned, whether assessee is classified as High end ITES or Low End ITES service provider. Even assessee has also not submitted its search criteria ( Para No (iv) at page no 15 of TPO order) and it is also mentioned that assessee has conducted fresh search process without assigning any reason for conducting fresh search and also not provided details of search process employed and its distinction with earlier search process for the same year. This has lead to an ambiguity in selection of comparables qua the functional profile of the assessee. On the basis of facts pointed out by the ld DR and examining the submission of the assessee before us coupled with the documents relied upon, we cannot close our eyes to this startling facts staring at us. In view of the above categorical finding of the coordinate bench for AY 2005-06 based on the T P Study report of the assessee itself now it is not possible to assume the functional profile of the assessee as low End ITES provider. Further it is also not possible to ignore the findings of the coordinate bench for AY 2007-08 further the appeal before us is AY 2006-07 which is in between year of both the above years decided by the coordinate bench. The two comparables objected by the assessee also cannot be directed for its exclusion without reaching at the correct functional profile of the assessee. Therefore, in the interest of justice and to dig out the correct functional profile of the assessee amidst host of confusion, we set aside the whole issue of transfer pricing adjustment back to the file of Ld AO/ TPO for ascertaining the correct functional profile of the assessee for this year without being influenced by the order of the E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 coordinate bench for AY 2007-08, then carry out examination of comparability analysis and then determine ALP of the International transactions. Needless to say that assessee shall be duty bound to provide correct functional profile of the assessee and its complete search process and its stepwise results to the ld TPO/ AO along with its justification for claim of working capital adjustments or capacity utilization for examination by the ld AO/ TPO. In the result ground no 3, 4, 5 and additional ground are remitted back to the file of ld AO/ TPO to decide the whole issue afresh and hence these grounds of appeal of the assessee are allowed with above directions.

35. Ground No. 6 of the appeal of the assessee is against the issue whether deduction under section 10 A of the income tax is allowable after setting of brought forward losses of the previous year, or before that. The assessee has claimed it before setting off brought forward losses of the earlier years. The Ld. assessing officer is of the view that forced assessee should have set off brought forward losses from assessment year 2002 – 03 of Rs. 9 508868/–. Assessee relied upon the decision of the coordinate bench which is pending for adjudication at that particular time before the Hon‘ble Delhi High Court. It was objected by the assessee before Ld. dispute resolution panel wide objection No. 7 which is rejected, therefore, in the final assessment order. The about treatment was given. Assessee aggrieved with this has preferred an appeal before us and it is stated by the Ld. authorized representative that now the issue is squarely covered in favour of the assessee by the decision of the Hon‘ble Supreme Court and therefore the issue needs to be decided in favour E Valueserve.com Pvt Ltd V ITO ITA 4001/del/2013 AY 2006-07 of the assessee. The Ld. departmental representative in his written submission has stated that section 10 A is not an exemption section but deduction section. The above section has been categorized as deduction section after the amendment made by finance act 2000, Which has further been clarified by the Central board of direct taxes vide its circular No. 7 dated 16/07/2013.

36. We have carefully considered the rival contention and also perused the various judicial precedents cited before us. According to us after the decision of the Hon‘ble Supreme Court in case of CIT V Yokogawa India Limited [2017] 77 taxmann.com 41 (SC)/[2017] 244 Taxman 273 (SC)/[2017] 391 ITR 274 (SC)/[2017] 291 CTR 1 (SC) issue is squarely covered in favour of the assessee. In view of this ground No. 6 of the appeal of the assessee is allowed.

37. Ground No. 7 of the appeal of the assessee is against charging and computing interest under section 234B, 234D and 244A of the income tax act, 1961. No specific arguments were raised before us and is charging of interest is consequential to the computation of total income of the assessee we dismiss ground No. 7 of the appeal.

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