Page 1 of 31 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I-2 : NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA No.510/Del/2014 (Assessment Year:2005-06) AT Kearney India Private ITO, Limited, Ward-1(1), 6 th Floor, Tower-D, Global Vs. New Delhi Business Park, Gurgaon PAN:AADCA1436G (Appellant) (Respondent) ITA No.511/Del/2014 (Assessment Year: 2007-08) AT Kearney India Private ITO, Limited, Ward-1(1), 6th Floor, Tower-D, Global Vs. New Delhi Business Park, Gurgaon PAN:AADCA1436G (Appellant) (Respondent) Assessee by : Shri Salil Kapoor, Adv Ms. Ananya Kapoor, Adv Revenue by: Sh. Amit Ray, Sr. DR Date of Hearing 14/07/2016 Date of pronouncement 23/09/2016 ORDER PER PRASHANT MAHARISHI, A. M. T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510 & 511/Del/2014 Page 2 of 31 1. There are two appeal filed by assessee for Ay 2005-06 and AY 2007-08 which were heard together and disposed off as under :- ITA NO 510/Del/2014 Y 2005-06. 2. This is appeal filed by assessee against order of ld CIT (A) IV, New Delhi dated 2011.2013 for Assessment Year 2005-06. 3. assessee has raised following grounds of appeal:- 1. Based on facts and circumstances of case and in law, Hon'ble Commissioner of Income-tax (Appeals) ['CIT(A)'] has erred in upholding order of learned Income-tax officer, Ward 1(1), New Delhi ('the learned assessing officer1) in assuming jurisdiction under section 147 of Income Tax Act, 1961 ('Act') and issuing notice under section 148 of Act to appellant. 1.1. Based on facts and circumstances of case and in law, Hon'ble CIT(A) has erred in upholding order passed under section 148 of Act by learned assessing officer as reasons to believe are invalid and reassessment proceedings cannot be initiated on mere change of opinion especially when claim of deduction under section 10A of Act has been verified in detail during course of assessment proceedings for earlier assessment years. 1.2. Based on facts and circumstances of case and in law, Hon'ble CIT(A) has erred in confirming action of learned assessing officer in initiating reassessment proceedings under section 147 of Act on basis of proceedings concluded for subsequent assessment year and not on basis of any tangible material available for concerned assessment year. 1.3. Based on facts and circumstances of case and in law, Hon'ble CIT(A) has erred in upholding order passed under section 147/143(3) of Act by learned assessing officer since same was based on surmises and conjectures and is therefore, bad in law and void ab-initio. Non applicability of Section 10A(7) read with 80IA(10) T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 3 of 31 2. Based on facts and circumstances of case and in law, Hon'ble CIT (A) has erred in confirming action of learned assessing officer in invoking Section 10A(7) read with Section 80IA(10) of Act and thereby restricting amount of deduction available under Section 10A of Act to Rs. 11,374,842 as against Rs. 39,280,361 claimed by appellant. 2.1. Based on facts and circumstances of case and in law, Hon'ble CIT (A) has erred in ignoring fact that all customers of appellant are overseas entities outside jurisdiction of Indian tax laws, and therefore there cannot be any motive to abuse tax concession provided under section 10A of Act. 2.2. Based on facts and circumstances of case and in iaw, Hon'ble CIT (A) has erred in not appreciating fact that appellant has paid MAT under section 115JB of Act on book-profits beginning from Assessment Year 2006-07 and Dividend Distribution taxes in India and therefore, allegation that no taxes are paid in India is baseless. 2.3. Based on facts and circumstances of case and in law, Hon'ble CIT (A) has erred in upholding action of learned assessing officer in applying provisions of section 80IA(10) of Act to determine profits earned from international transactions and further using Transfer Pricing Study to determine "ordinary profit" for purpose of section 10A(7) read with section 80IA(10) of Act. 2.4. Based on facts and circumstances of case and in law, Hon'ble CIT (A) has erred in not appreciating various judicial precedents relied upon by appellant in this regard. 2.5. Without prejudice to Grounds 2.1 to 2.4 above, based on facts and circumstances of case and in law, Hon'ble CIT(A) has erred in not appreciating that section 10A of Act is beneficial provision and should be given such interpretation so as to grant tax incentive intended by legislation. 4. Brief facts of case are that assessee, company engaged in business of providing ITes services, filed return of income on 28.10.2005 declaring Nil income. While filing return of income it T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 4 of 31 claimed deduction u/s 10A of Income Tax Act, 1961 of Rs. 39280361/-. Its return was processed u/s 143(1) of Act on 17.05.2006. Subsequently, notice u/s 148 of Act was issued on 23.03.2012 for reopening of assessment recording following reasons:- assessee had filed its Return of Income vide acknowledgement no. 0101000559 dated 28-10-2005, declaring its total income at Rs.Nil, and claiming exempt income of Rs.3,92,80,361/-. refund of Rs.28,30l/- was claimed on basis of TDS. return was processed under section 143(1) of I.T. Act. 1961 on 17-05-2006, determining Refund of Rs.30.282/- including interest. From perusal of I.T. Return, following was observed: 1.1. As per annexure 5, notes to computation, assessee is engaged in providing IT enabled services involving research and production support to overseas group entities engaged in consulting projects. nature of services are of 'back office operations' (as per schedule 8 to Audited Accounts). 2. assessee has claimed deduction u/s IDA of Act to tune of fts.3,92,80,361/-. Its turnover of Rsfi,24,85,165/- was 100% from Export of its services as detailed in (1) above, to its overseas associate enterprises (as per Form 3CEB doted 22'10-2005). 3. After deducting expenditure of Rs.4,75,70,229/- from turnover of Rs.8,24,85,165/-, Operating Profit comes to Rs.3,49,14,936/-. in percentage terms, this Operating Profit is 73.496 over Operating Cost. 4. Operating Profit ratio is prima-facie at very high level. This becomes matter of dose watch when such huge margins are being earned by virtue of transactions with associate enterprises and assessee is claiming deductions u/s 10A of Act. Section 10A(7) of Act refers to Section 80-IA(10) of Act, Section 80-IA(10) creates limitations on quantum of eligible deduction. According to this section, where, owing to mutual T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 5 of 31 arrangement, transaction between connected parties is yielding more than ordinary profits in eligible entity, then AO shall re-compute amount of profits as may be reasonably deemed to have derived there-from. 5. As per me general trends in such stream of business, average Operating Profits in IT enables services are approximately 15-20% over Operating Costs. It is pertinent to mention that same issue was adjudicated upon during scrutiny proceedings for A.Y.2009-10 in case at same assessee. In that year, after elaborate discussions deduction u/s 10A was restricted to 20% over Operating Cost. 6. Therefore, I have reason to believe that assessee has claimed excessive deduction u/s 10A of Act. As already discussed in (5) above, average Operating Profits in I.T. enables services are approximately 15-20% over Operating Costs. Even at liberal estimate, for purpose of computing deduction u/s 10A of Act, if assessee is considered eligible for mark-up of 20% over Operating Cost, assessee has claimed excessive deduction, calculated as Turnover As per P&L Account 82485165 B Operating Cost Exp. as per P&L 47570229 Account C Operating Profit 'A' - 'B' 34914936 (approx. 73.4% of 'B'} D Operating Profit 20% on 'B' 9514046 (eligible for deduction u/s 10 A) E Balance Operating C - 'D' (Excessive 25400890 Profits (not eligible Deduction claimed for deduction u/s u/s IDA) 10A) Further, as per P&L A/c, assessee has earned interest income on deposits with banks to j tune of Rs.1,26,118/-. In case of assessee, same is taxable under head Income from Other Sources'. However, same has also not been offered to tax. T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 6 of 31 Hence I have reason to believe that income of east Rs.2,55,27.008/- (25400890 + 126118} has escaped assessment and case is fit for issuing Notice U/s 14B of I.T. Act, 19 61." 5. Ld AO supplied reasons for reopening to assessee on 23.04.2012 against which assessee filed objection dated 14.05.2012 and order disposing objections was passed on 18.05.2012. Subsequently, assessment order u/s 143(3) read with section 147 of Act was passed making following two additions/disallowances:- i. interest income of Rs. 126118/- shown by assessee as business income was treated by ld Assessing Officer as income from other sources . ii. assessee claimed deduction u/s 10A of Act of Rs. 39280361/- which was reduced to Rs. 11374842/- by ld Assessing Officer holding that assessee s profit from eligible undertaking is more than ordinary and therefore applying provisions of section 10A(7) read with section 80IA(10), ld Assessing Officer arrived at sum of Rs. 27779401/- which is more than ordinary profit and consequently reduced deduction by this sum. 6. Against this order assessee preferred appeal before first appellate authority challenging reopening of assessment, quantum of deduction u/s 10A and lastly on account of treatment of interest income of Rs. 126118/- as income from other sources. Ld CIT (A) confirmed validity of reopening of assessment u/s 147 of Act and also confirmed deduction u/s 10A of Act to Rs. 11374842/- as against claim of Rs. 39280361/-. On issue interest income chargeable as income T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 7 of 31 from other sources he also confirmed treatment given by ld AO. On being aggrieved by order of ld CIT(A), assessee has preferred this appeal before us. 7. first ground of appeal is against reassessment proceedings arguing that same are bad in law. ld AR first submitted that for Assessment Year 2008-09 case of assessee was reopened u/s 148 of Act on reappreciation of same facts which were available in original assessment proceedings. Further based on assessment proceedings u/s 143(3) of Act for subsequent Assessment Year i.e. AY 2009-10, present assessment is reopened. In those proceedings it was alleged that assessee is earning high level of operating profits and consequently claim of assessee of deduction u/s 10A of Act is excessive. Subsequently Coordinate bench has decided this issue for Ay 2009-10 in favour of assessee. However on that basis ld AO has reopened assessment for this year. Similar proceedings were also initiated for AY 2006-07 which as challenged before Hon'ble Delhi High Court and Hon'ble High Court vide its decision dated 16.09.2014 held as under:- 6. We find that there is one factor which is different from that case and, that is, that while in previous case no appeal had been filed against Tribunal's order, in present case Tribunal's order had been passed only on 26.08.2014 and there is still time for filing of appeal on part of Revenue. In these circumstances, while very basis for issuance of notice under Section 148 no longer survives, we are of view that as there is still time for filing of appeal by Revenue before this court, different order would be required to be passed. 7. It is clear that as position stands today, reasons do not survive. However, subsequently position may be altered in case Revenue files and appeal and succeeds T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 8 of 31 therein. Therefore, Revenue also has to be protected. Consequently, we are inclined to adopt approach indicated in National Agricultural Co-operative 'Marketing Federation of India Ltd. v. Assistant Commissioner of Income Tax - Circle 32(1), VV.P.(C) 5895/2010 decided on 07.08.2014 wherein we passed following order:- In these circumstances, we find that as of no\f, very basis of initiating re-assessment proceedings by virtue of (he notice dated 02,02.2010 issued under Section 148 of Income Tax Act, 1961 does not survive. Therefore, we arc disposing of this writ petition with liberty to both sides to seek revival in case need arises. We make it clear that in case it is ultimately held in favour of revenue, then revenue shall be entitled to revive its proceedings pursuant to notice under Section 148 of said Act and assessee shall not take up plea of limitation. writ petition stands disposed of accordingly. 8. Consequently, we direct that re-assessment proceedings stand closed and present writ petition is disposed of with liberty to both sides to seek revival in case need arises. We make it clear that if case is ultimately decided in favour of Revenue in respect of assessment year 2009-10, then Revenue shall be entitled to revive its proceedings pursuant to impugned notice under Section 148 of said Act and assessee shall not take up pica of limitation. As of now, re-assessment proceedings initiated by virtue of impugned notice under Sectional 48 does not survive. We are making it clear that we have not expressed any opinion with regard to validity of issuance of notice under Section 148 on date on which it was issued. 8. Therefore, he submitted that order of ITAT dated 26.08.2014 referred to by Hon'ble Delhi High Court has not been challenged and therefore on this ground reopening may be held to be invalid for this year. ld AR further submitted that T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 9 of 31 revenue has not filed any appeal against decision of ITAT for Assessment Year 2009-10 in ITA No. 348/Del/2013. 9. Against this ld DR submitted that ld CIT(A) has upheld reopening relying on decision of Hon'ble Supreme Court in case of ACIT Vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. 219 ITR 500 (SC) and therefore reopening has been correctly initiated by ld Assessing Officer. He vehemently relied on para 4.3 of order of ld CIT(A), further, he submitted that assessment proceedings in case of assessee of subsequent years becomes tangible material based on which assessment can be reopened. 10. We have carefully considered rival contentions and also perused decision of Hon'ble Delhi High Court placed before us. On reading of decision of Hon'ble Delhi High Court , it is clear that identical issue was decided. Though Hon ble High Court relying on decision of Silver Oak Laboratory Pvt Ltd. Vs. DCIT dated 18.12.2008 as held that in earlier years additions has been deleted by tribunal and it was noted that against that decision of tribunal revenue has not filed any appeal. reopening based on findings in assessment proceedings of subsequent years cannot be used to reopen assessment of previous assessment years when there was no specific allegation with regard to order in question. Here also we have perused order of Tribunal dated 26.08.2014 in case of assessee for Assessment Year 2009-10 whereby addition with respect to disallowance u/s 10A has been deleted. Almost two years have passed after date of pronouncement of order. On specific question of bench T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 10 of 31 about filing of appeal against this order before higher forum parties could not point out whether appeal has been filed before Hon ble Hon'ble Delhi High Court against order of Tribunal. In AY 2006-07, Hon'ble Delhi High Court did not quashed reopening notice only because of reason that there was still time for filing appeal by revenue before Hon'ble High Court. In present case time limit has already been expired for filing of appeal against that order. In view of this respectfully following decision of Hon'ble Delhi High Court and assessee own case we are of opinion that when very basis for issue of notice u/s 148 no longer survives, reopening is invalid on that count. 11. However on looking to second issue of reasons recorded which shows that assessee has shown interest earned on deposits with banks to tune of Rs. 126118/- shown by assessee under head business income but according Assessing Officer same is taxable under head income from other source . As there is no order framed in case of assessee u/s 143(3) and return is accepted u/s 143(1) of Act we are of view that there is no error in order of ld CIT(A) in upholding validity of reopening following decision of Hon'ble Supreme Court in case of ACIT Vs. Rajesh Javeri Stock Brokers Pvt. Ltd. (supra). We also draw support from decision of Hon'ble Delhi High Court in case of Indu Lata Rangwala 348 ITR 337 (del) dated 18.05.2016 wherein it has been held that where reopening is sought of assessment in situation where initial return is processed u/s 143(1) Assessing Officer can form reasons to believe that T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 11 of 31 income has escaped assessment by examining very return and on documents accompanying return. In such cases it is not necessary for Assessing Officer to come across, tangible material to form reasons to believe that income has escaped assessment. Hon'ble Delhi High Court while deciding above issue has considered all decisions cited before us regarding reopening of assessment. Hon'ble Delhi High Court in above case has also considered decision of Hon'ble Supreme Court in case of CIT Vs. Kelvinator India Ltd. 320 ITR 561 (SC) and decision of Hon'ble Delhi High Court in case of CIT Vs. Orient Craft Ltd. 354 ITR 546 (Del). In view of this we uphold reopening of assessment in case of assessee u/s 147 of Act. In result, Ground No. 1 of appeal of assessee is dismissed. 12. Ground No. 2 of appeal of assessee is against reduction in deduction available u/s 10A of Act of Rs. 11374842/- as against Rs. 39280361/- claimed by appellant. It was submitted before us that identical issue has been considered by coordinate bench in assessee s own case for Assessment Year 2009-10 in ITA No. 348/Del/2013 dated 26th August 2014. parties before us have also agreed that there is no change in facts and circumstances in this year compared to year for which decision is rendered. 13. We have carefully considered rival contentions and also perused decision of coordinate bench. appellant is software technology park unit engaged in business of providing information technology enabled serviced to its overseas group entities. entire proceeds received by assessee are T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 12 of 31 from export of services to its associated enterprises. On profit of this unit it has claimed deduction u/s 10A of Act. According to Assessing Officer assessee has earned huge margins over and above margins of comparable companies and therefore it invoked provision of section 10A(7) of Act read with section 80IA (10) wherein it has provided that where Assessing Officer owning to close connection between parties, is of view that assessee is earning more than ordinary profit then he shall compute reasonable profit derived from such eligible industrial undertaking. coordinate bench in Assessment Year 2009-10 has dealt with this issue vide para No. 5 to 11 as under:- 5. We have heard rival submissions and perused relevant material on record. Revenue has made out case that reduction in amount of deduction u/s 10A was justified because of operation of provisions of sub-section (10) of section 80IA. Sub-sec. (7) of sec. 10A provides that: provisions of sub-sec. (8) and sub-sec. (10) of section 80IA shall, so far as may be, apply in relation to undertaking referred to in this section as they apply for purposes of undertaking referred to in section 80IA . essence of this provision is that disabling provisions contained in sub- secs. (8) and (10) of sec. 80IA have full application to sec. 10A as well, wherever applicable. Assessing Officer has applied only sub-sec. (10) of sec. 80IA to restrict ITA No. 348/Del/2013 A. T. Kearney India Pvt. Ltd. 4 amount of deduction u/s 10A to this level. It is clear from facts of case narrated above that assessee is otherwise entitled to deduction u/s 10A in respect of export of eligible goods. fact that Assessing Officer himself allowed deduction u/s 10A @ 20% proves that all eligible conditions set out in sec. 10A of Act were satisfied by assessee. sole reason assigned by AO for restricting amount of benefit u/s 10A is applicability of 80IA(10) in terms of which assessee and its foreign AE arranged course of business in T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 13 of 31 such way so as to produce more than ordinary profits to assessee carrying on eligible business in India. 6. In order to evaluate and examine rival contentions on action of authorities below in restricting amount of deduction u/s 10A, it would be apposite to consider mandate of sub-sec. (10) of sec. 80IA as applicable at relevant time, as under:- (10) Where it appears to Assessing Officer that, owing to close connection between assessee carrying on eligible business to which this section applies and any other person, or for any other reason, course of business between them is so arranged that business transacted between them produces to assessee more than ordinary profits which might be expected to arise in such eligible business, Assessing Officer shall, in computing profits and gains of such eligible business for purposes of deduction under this section, take amount of profits as may be reasonably deemed to have been derived therefrom: With this backdrop, we will deal with issues taken up before us, one by one. I. Whether sec. 80IA(10) applies when second party to transaction is non-resident. 7.1. ld. AR vehemently argued that sub-sec (10) of sec. 80IA cannot be applied to transactions between two enterprises, one of which is not resident of India. In support of this contention, he sought to rely on Circular No. 308 dated 29.6.1981 explaining provisions of sec. 10A. Referring to para 6.10 of Circular, dealing with applicability of sub-sec. (8) and (9) of sec. 80I to sec. 10A, ld. AR argued that its last line clearly provides that this provision has been made with view to avoid abuse of tax concession by manipulation of profits between associate concerns or different units of same concern. Drawing strength from these lines, ld. AR canvassed view that manipulation of profits between two enterprises can only be in situation where both such enterprises are residents of India, so that increase in profit of eligible business results in corresponding decrease in profit of other non-eligible business. If assessee having eligible assessee T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 14 of 31 is resident of India and other person having non-eligible business is resident of another country, there can be no question of manipulation of profit, as in such scenario it is only resident assessee whose profits are taxable in India and there can be no ITA No. 348/Del/2013 A. T. Kearney India Pvt. Ltd. 6 corresponding decrease in profits of assessee having non-eligible business. 7.2. We do not find any force in this contention made on behalf of assessee. plain reading of sub-sec. (10) of sec. 80IA makes it explicit that Assessing Officer of assessee having eligible business is empowered to scale down profits where it appears to him that owing to close connection between assessee carrying on eligible business and any other person , course of business is so arranged that business transacted between them produces to assessee more than ordinary profits, which might be expected to arise in such eligible business. essential requirement for invoking sub-sec. (10) of sec. 80IA is that course of business between assessee having eligible business and closely connected any other person should be arranged. expression `any other person has not been qualified by phrase `resident of India . It has no where been provided in any part of this provision that such connected person also must be resident of India. essence of this disabling provision is that when close connection between two related persons artificially produces more than ordinary profits to assessee having eligible business, then same should be set right. It does not matter that such other related person assisting in artificially increasing profits of eligible assessee, is resident of India or of any other country. Further, we are unable comprehend from unambiguous language of provision that there should be shifting of profits from one taxable entity in India to another taxable entity in India, as pre-condition for invoking sub-section (10). There is no such stipulation in provision that increase in profits of assessee having eligible business must correspond with decrease in taxable profits in India of person carrying noneligible business. This provision is simply concerned with increase in profits of assessee having eligible business. To argue that unless there is corresponding decrease in profits of other assessee, T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 15 of 31 also resident of India, mandate of sub-sec. (10) is not activated, is akin to reading more than actual content of provision, which is obviously impermissible. We, therefore, hold that section 80IA(10) applies notwithstanding fact that other related person is resident or non- resident. This contention is thus rejected as devoid of any merit. II. It should be arranged course of business between related persons to produce more than ordinary profits. 8.1. We have set out sub-section (10) above as was applicable at material time. As AO has made out case that owing to close connection between assessee and foreign AE, course of business between them was so arranged as to produce more than ordinary profit to assessee, thus, part of provision stipulating - or for any other reason -, is not applicable to facts of instant case. Thus on analysis of parts of sub-section (10), as are relevant and applicable to factual matrix under consideration, it can be seen that it has following ingredients : - i. There should be close connection between assessee carrying on eligible business and any other person ; and ii. course of business between assessee and such other closely connected person should be so arranged that business transacted between them produces more than ordinary profits to assessee carrying on eligible business. If above i. and ii. are cumulatively satisfied, then iii. Assessing Officer shall take amount of profits as may be reasonably deemed to have been derived from transactions of such arranged course of business in computing profits of such eligible business for purposes of deduction under this section. 8.2. There is no dispute as regards applicability of i. above inasmuch as there is close connection between assessee carrying on eligible business in India and its T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 16 of 31 associated enterprise, being any other person, carrying on business outside India. 8.3. Now we espouse ii. above, which is crucial for our decision and major thrust of arguments has been on it. This ingredient provides that course of business between assessee and such other closely connected person should be so arranged that it produces more than ordinary profits to assessee carrying on eligible business. bare reading of relevant part of provision indicates that in order to invoke this provision, it is of utmost importance on part of AO to first demonstrate that transactions between assessee and other related person were `arranged with view to produce more profit to assessee carrying on eligible business. 8.4. At this juncture, it is of significant to note from iii. above that sub-section (10) is fictional provision, deeming reasonable profits as actual profits for purposes of computing amount of eligible deduction u/s 10A in case conditions under i. and ii. above are satisfied. noteworthy point is that instantly we are dealing with deeming provision. deeming provision or legal fiction is one whose mandate does not exist but for such provision. Because of such deeming provision alone, given imaginary state of affairs is taken as reality notwithstanding fact that it is at variance with reality and other relevant provision of enactment. It has been fairly settled that scope of deeming provision should be restricted to what is expressly stated in such provision. There can be no inference or intendment as regards such provision. Hon ble Supreme Court in CIT Vs. Amarchand N. Shroff (1963) 48 ITR 59 (SC) and CIT Vs. Mother India Refrigeration Industries P. Ltd. (1985) 155 ITR 711 (SC) considered ambit of deeming provisions and held that fiction cannot be extended beyond object for which these were enacted. Hon ble Bombay High Court in CIT Vs. Ace Builders P. Ltd. (2006) 281 ITR 210 (Bom.) has also taken similar view. On appraisal of above judgments, position which emerges is that whenever legal fiction is created by way of deeming provision, it is vital to go strictly by express prescription of this provision. Such deeming provision cannot be extended beyond what is expressly stated therein. If certain consequences have been made to follow on A T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 17 of 31 fulfillment of certain set out conditions in deeming provision, then unless such conditions are strictly fulfilled, consequences cannot be deduced. In other words, deeming provision is to be strictly construed. 8.5. With this background that sub-section (10) is deeming provision and it must be strictly construed, we revert to point under consideration that Assessing Officer must show at first instance that course of business between these closely connected persons was arranged so as to produce more than ordinary profits in hands of person carrying on eligible business. Such position has to be necessarily proved. There can be no inference as to fulfillment of such condition. Thus, it is vivid that unless such `arrangement or manipulation is shown to exist, there can be no question of discarding declared actual profit and substituting it with reasonable profit. It is manifest that there are two components of this. First is arrangement between related parties and second, such arrangement should lead to higher profit. High profit must necessarily be consequence of such arrangement. To put it simply, if such `arrangement is cause, higher profit is its `effect . It is well known that higher or lower profit of business can be as result of cumulative effect of several factors. To cite example, if one person succeeds in cutting down its costs without affecting quality of output, he will naturally earn more profit than others in same line of business. Similarly, economies of scale also affect profit. In like manner, extent of administrative, marketing and selling expenses also has bearing on overall profit of business. Other factors for increase in profits may be economical purchases or costly sales. If businessman manages to make economical purchases from market, he will naturally earn more profit. On other hand, if purchases are not actually economical, but because of close connection with seller, arrangement is such so as to show low purchase price in accounts of person carrying on eligible business, apparent profit will still be high. Though in both such cases, profit of eligible business has shot up, but in first instance, it is higher due to efficiencies and in second, it is higher due to `arrangement . Similarly, if businessman manages to make sales in market at higher price T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 18 of 31 because of its effective selling techniques, he will earn more profit. On other hand, if sales are not at high price because of effective marketing strategy, but because of close connection with buyer, arrangement is such so as to show higher sale price in accounts of person carrying on eligible business, profit will still be high. Though in both cases profit of eligible business will be higher, but in first instance it will be higher due to better marketing strategy and in second, it will be higher due to `arrangement . What is relevant for invoking subsection (10) is prevalence of second situation above where higher profit has resulted due to arrangement between assessee and its closely connected person and not first, where higher profit resulted due to assessee s effectively managing business. Thus it is evident that though in both situations, profit is higher, but recourse to sub-section (10) can be taken only in case of `arrangement between assessee and closely connected person. In other words, mere higher profit of person carrying on eligible business is no criteria to press into service this provision, unless `arrangement is proved in first instance. `arrangement needs to be specifically proved by AO by showing that assessee intentionally made purchases at relatively lower rate from closely connected person vis- -vis that available in market for same products or assessee made sales to closely connected person at relatively higher rate vis- -vis prevailing market price of similar products etc. or that assessee having eligible income booked relatively less expenses or showed relatively more income on other counts in transactions with closely connected person. It is only when existence of` `arrangement is proved in this manner that provisions of sub-section (10) can be employed to reduce extraordinary profits resulting from such lower payments or excess recoveries to/from related person. To put it simply, higher profit shown by eligible assessee is end point of exercise to be undertaken by AO in this regard, starting with expressly showing as to how transactions were specifically arranged to produce more than ordinary profits to assessee carrying on eligible business. mere higher profit earned by such eligible T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 19 of 31 assessee can be no reason to conclude that assessee transacted in such `arranged manner with its related persons so as to produce more profits to it. At cost of repetition, we reiterate that higher profit should be `effect of such `arrangement and cannot be substitute of such `arrangement itself, which is `cause , for invoking sub-section (10) of section 80IA. 8.6. It can be seen from facts of instant case that AO has simply treated high profit earned by assessee as reason to summon sub-section (10), without even remotely demonstrating existence of any `arrangement between assessee and its AEs aimed at producing extra ordinary profits in hands of assessee. conclusion drawn by authorities below in such circumstances cannot be ex consequenti sustained. ITA No. 348/Del/2013 A. T. Kearney India Pvt. Ltd. 14 III. Effect of insertion of proviso to sub-section (10) w.e.f. 1.4.2013 9.1. It can be seen that Assessing Officer simply took support of Transfer Pricing study report furnished by assessee for coming to conclusion that A.Es. and assessee company, owing to their close connection, had so arranged course of business amongst themselves so that business transacted between them produced more than ordinary profits to assessee. Now question arises as to whether TP study report can be construed as sufficient evidence to prove that course of business was arranged between assessee and its foreign A.Es to produce more profits in hands of assessee. ld. DR strongly argued that Transfer pricing study report submitted by assessee clearly proved that assessee charged higher profit from its associated enterprises. In his opinion, lower profits earned by other comparable cases in similar circumstances was sufficiently indicative of fact that assessee arranged transactions with its related parties so as to produce more profits in its accounts. He forcefully relied on proviso to sub-section (10) of section 80IA, which talks of computing ordinary profits having regard to arm s length price 9.2. In order to scrutinize this contention, it is relevant to note text of proviso to sub-sec. (10) which has been inserted by A T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 20 of 31 Finance Act, 2012 w.e.f. 1.4.2013. This proviso reads as under:- `Provided that in case aforesaid arrangement involves specified domestic transaction referred to in section 92BA, amount of profits from such transaction shall be determined having regard to arm's length price as defined in clause (ii) of section 92F. 9.3. close scrutiny of above proviso transpires that in case `the aforesaid arrangement (that is, arrangement referred to in main sub-section (10) between eligible assessee and related person under which transactions are so arranged as to produce more than ordinary profits to eligible assessee) involves specified domestic transaction, then amount of reasonable profits from such transactions between eligible assessee and related person shall be determined having regard to arm s length price of such transactions. Meaning of `Specified domestic transaction has been given in section 92BA of Act as any of given five specific and one general transaction, not being international transaction, including, inter alia, (iv) any business transacted between assessee and other person as referred to in sub-section (10) of section 80-IA, where aggregate of such transactions entered into by assessee in previous year exceeds sum of five crore rupees. When we read proviso in entirety, it divulges following components :- i. There should be arrangement between eligible assessee and other related person under which transactions are so recorded as to produce more than ordinary profits in hands of eligible assessee; and ii. Such arrangement should involve specified domestic transaction, that is, aggregate of all six types of given transactions should exceed sum of five crore rupees. iii. In such case, reasonable profits to be substituted with declared profits, is one determined having regard to ALP. 9.4. It is only when i. and ii. above are collectively satisfied that iii. above is set in motion so as to determine A T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 21 of 31 amount of reasonable profits, as determined having regard to ALP, to be substituted with declared profit of eligible assessee. If aggregate of all given six transactions does not exceed sum of five crore rupees, then it would not become specified domestic transactions. But in such case also, wherever relevant provisions are applicable, those will hold field. mandate of main part of section 80IA(10) will also continue to apply in case aggregate of six transactions is less than sum of five crore rupees, in which case amount of reasonable profit will still have to be computed by AO himself but without taking recourse to ALP, which in any case will not be available as assessee will not be required in that situation to make its Transfer ITA No. 348/Del/2013 A. T. Kearney India Pvt. Ltd. 17 pricing study report. However, important factor, which needs to be highlighted here is that in case of specified domestic transaction, that is, where aggregate of six transactions exceeds sum of five crore rupees, proviso simply provides mechanism for computation of reasonable profit to be determined having regard to ALP. This is only mandate of proviso. Even in that case also, existence of arrangement between assessee and its related party, aiming to increase profits of eligible assessee, is pre-requisite for resorting to sub-section (10). Notwithstanding fact that profit of eligible assessee is higher in comparison with profit computed having regard to ALP of specified domestic transactions, still substitution of such profits with that computed having regard to ALP, will be possible only if AO firstly demonstrates existence of such `arrangement . only change which has been made by insertion of this proviso is that in case of `arranged specified domestic transaction, AO now need not separately find out and establish genuineness of `reasonable profits to be substituted for declared profits. In such scenario, profit determined having regard to ALP shall be automatically considered as `reasonable profits to be substituted with declared profits by eligible T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 22 of 31 assessee. To contend that proviso has dispensed with need on part of AO to establish such `arrangement , is not correct. What has been dispensed with is calculation of `reasonable profits . existence of such `arrangement is still required to be proved by AO. crux of insertion of proviso to sub-sec. (10) is that where course of business between two connected resident assessees is so arranged that business transacted between them produces more than ordinary profits to assessee carrying on eligible business, then reasonableness of profits so charged shall be judged with reference to ALP of such transaction. 9.5. It is paramount to note that proviso to sub-sec. (10) has been inserted w.e.f. 1.4.2013 simultaneous with inclusion of `specified domestic transaction within ambit of transfer pricing provision, whereas Chapter-X dealing with computation of income from international transaction having regard to Arm s Length Price was inserted by Finance Act, 2001 w.e.f. 1.4.2002. At that time, subsec. (10) of sec. 80IA was very much on statute. legislature did not consider it expedient to deem profit from international transaction having regard to ALP as reasonable profit in course of arranged course of business between Indian assessee carrying on eligible business and foreign A.E. fact that only profit from specified domestic transaction determined having regard to ALP has been considered as reasonable for purposes of sec. 10A w.e.f. 1.4.2013, goes to prove that legislature did not intend to consider profit from international transaction computed having regard to ALP, as relevant ITA No. 348/Del/2013 A. T. Kearney India Pvt. Ltd. 19 for sub- sec. 10A from 1.4.2002. further fact that proviso to subsec. (10) of sec. 80IA inserted by Finance Act, 2012 encompasses only specified domestic transaction and not international transaction, as is case under consideration, amply proves that legislature neither intended nor intends to have recourse to profits from international transaction having regard to their ALP as yardstick of `reasonable T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 23 of 31 profits to be substituted for declared profits as per sub-section (10) of section 80IA. 10. ld. AR has commended to us judgment of Hon ble Bombay High Court in CIT Vs Schmetz India Pvt. Ltd. (2012) 254 CTR (Bom.) 504 in which it has been held that merely because assessee makes extra ordinary profit, it would not lead to conclusion that same was organized/arranged for purpose of claiming higher deduction u/s 10A of Act. Our attention has also been drawn towards order passed by Hyderabad Bench of Tribunal in Zavata India Pvt. Ltd. Vs ITO (ITA No. 628/Hyd./2008) and another passed by Chennai Bench of Tribunal in M/s Visual Graphics Computing Services (India) Pvt. Ltd. Vs ACIT (2073/Mds/2011) in which it has been held that TP study report cannot be considered for determining excess profit and thereby denying/restricting amount of deduction u/s 10A. No contrary precedent has been brought to our notice by ld. DR. 11. Adverting to facts of extant case, we find that AO simply relied on TP study report submitted by assessee to form bedrock for disallowance of part of amount of deduction u/s 10A, without firstly showing that there existed any arrangement between assessee and its overseas related party, by which transactions were so arranged as to produce more than ordinary profits in hands of assessee. assessment year under consideration is 2009-10. Neither proviso to sub- section (10) existed at that time, nor such proviso can be applied as we are dealing with international transaction and not specified domestic transaction. Under these circumstances, we are of considered opinion that impugned order upholding invocation of sub-sec. (10) of sec. 80IA cannot be countenanced to this extent. Ergo, it is held that ld. CIT(A) erred in sustaining disallowance made by Assessing Officer by restricting amount of deduction u/s 10A of Act to Rs. 2.63 crore as against Rs. 8.22 crore claimed by assessee. impugned order on this issue is overturned and it is directed to allow deduction as claimed. T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 24 of 31 14. In view of admission of parties that there is no change in facts and circumstances of case in present year compared to Assessment Year 2009-10 , therefore following decision of coordinate bench we delete addition made by Assessing Officer in restricting amount of deduction claimed u/s 10A of Rs. 39280361/- to Rs. 11374842/-. In view of this we allow ground No. 2 of appeal of assessee reversing order of ld CIT(A). 15. Ground No. 3 of appeal is against denying deduction u/s 10A on interest income from bank deposits amounting to Rs. 126118/- considering it as income from other sources. ld AR submitted that issue is squarely covered in favour of assessee by order of Hon ble Hon'ble Delhi High Court in case of CIT Vs. Hritinik Export Pvt Ltd. dated 13.11.2014. He further relied on decision of Hon'ble Karnataka High Court in case of CIT Vs. Motorola India Electronics Pvt. Ltd. 46 Taxmann. Com. 167. 16. Against this ld DR submitted that interest income is earned from fixed deposits and issue is squarely covered against assessee in view of this decision of Hon'ble Supreme Court in case of Liberty India Vs CIT 317 ITR 218 and Pandian Chemicals Ltd Vs. CIT 262 ITR 278 (SC). 17. We have carefully considered rival contentions. Assessee has earned interest on short term deposit with bank and appellant treated it as business income whereas ld Assessing Officer was of view that interest income is chargeable to tax as income from other sources and as it is not business income deduction on this sum is not allowable u/s 10A of Act. ld T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 25 of 31 CIT(A) has dealt with this issue at Page 6.3 of his order as under:- 6.3 I have carefully considered submissions of Id. AR and perused order passed by AO. Section 10A provides deduction of profits and gains derived by industrial undertaking from export of articles, earthings or computer software, Hon'ble Supreme Court has examined meaning of word derived in various cases. In case of Pandian Chemicals Ltd. vs. CIT 262 ITR 278 (SC) it was held that words derived from must be understood as something which has direct or immediate nexus with industrial undertaking. Hon'ble Apex Court in case of Liberty India vs. CIT 317 ITR 218 (SC) has held that by using expression 'derived from', Parliament intended to cover sources not beyond first degree. Hon'ble Madras High Court in case of CIT vs. N.S.C. Shoes 258 ITR 749 has held that interest on amount deposited with bank cannot be said to be income derived from industrial undertaking. interest income was held to be not having any direct and proximate link with industrial undertaking. In view of facts of case and judicial pronouncements discussed above, ! hold that AO was fully justified in treating income of Rs. 1,26,1187- as income from other sources and rejecting claim of appellant for deduction u/s 10A in respect of this amount. same is therefore upheld. This ground of appeal is rejected. 18. We have carefully considered decision of Hon'ble Delhi High Court in case of CIT Vs. Hritnik excessive pvt Ltd. (supra). issue in that case was with respect to duty draw back in form of DEPB benefits whether they are deemed to be part of business income , thus it was treated as profit derived from business undertaking. In present case first issue to be decided as whether interest income falls under head of business or not. Therefore, ratio laid down by that decision do not apply to present case. Consequently, reliance on this decision does not help assessee. Decision of Hon ble T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 26 of 31 Karnataka High Court was also with respect to interest income earned from inter corporate loan and deposit lying EEFC account. Hon'ble High Court did not have question before it whether interest income is chargeable to tax under head business income or income from other sources. In view of this We do not find any infirmity in order of ld CIT(A) in holding that interest income earned by assessee on surplus funds is chargeable to tax under head income from other sources and not business income therefore ground No. 3 of appeal is dismissed. 19. In view this appeal of assessee for Assessment Year 2005-06 is partly allowed. ITA No. 511/Del/2014 Assessment Year 2007-08 20. This appeal is filed by assessee against order of ld CIT(A) dated 28.11.2013 raising following grounds of appeal:- Re-assessment proceedings are bad in law 1. Based on facts and circumstances of case and in law, Hon'ble Commissioner of Income-tax (Appeals) ['CIT(A)'] has erred in upholding order of learned Income-tax officer, Ward 1(1), New Delhi ('the learned assessing officer1) in assuming jurisdiction under section 147 of Income Tax Act, 1961 ('Act') and issuing notice under section 148 of Act to appellant. 1.1. Based on facts and circumstances of case and in law, Hon'ble CIT(A) has erred in upholding order passed under section 148 of Act by learned assessing officer as reasons to believe are invalid and reassessment proceedings cannot be initiated on mere change of opinion especially when claim of deduction under section 10A of Act has been verified in detail during course of assessment proceedings for earlier assessment years. 1.2. Based on facts and circumstances of case and in law, Hon'ble CIT(A) has erred in confirming action of learned assessing officer in initiating reassessment proceedings under section 147 of Act on basis of proceedings concluded for subsequent assessment year and not T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 27 of 31 on basis of any tangible material available for concerned assessment year. 1.3. Based on facts and circumstances of case and in law, Hon'ble CIT(A) has erred in upholding order passed under section 147/143(3) of Act by learned assessing officer since same was based on surmises and conjectures and is therefore, bad in law and void ab-initio. Non applicability of Section 10A(7) read with 80IA(10) 2. Based on facts and circumstances of case and in law, Hon'ble CIT (A) has erred in confirming action of learned assessing officer in invoking Section 1QA(7) read with Section 80IA(10) of Act and thereby restricting amount of deduction available under Section 10A of Act to Rs. 15,636,462 as against Rs. 27,957,136 claimed by appellant. 2.1. Based on facts and circumstances of case and in law, Hon'ble CIT (A) has erred in ignoring fact that all customers of appellant are overseas entities outside jurisdiction of Indian tax laws, and therefore there cannot be any motive to abuse tax concession provided under section 10A of Act. 2.2. Based on facts and circumstances of case and in law, Hon'ble CIT (A) has erred in not appreciating fact that appellant has paid MAT under section 115JB of Act on book-profits beginning from Assessment Year 2006-07 and Dividend Distribution taxes in India and therefore, allegation that no taxes are paid in India is baseless. 2.3. Based on facts and circumstances of case and in law, Hon'ble CIT (A) has erred in upholding action of learned assessing officer in applying provisions of section 80IA(10) of Act to determine profits earned from international transactions and further using Transfer Pricing Study to determine "ordinary profit" for purpose of section 10A(7) read with section 801A(10) of Act. 2.4. Based on facts and circumstances of case and in law, Hon'ble CIT (A) has erred in not appreciating various judicial precedents relied upon by appellant in this regard. 2.5. Without prejudice to Grounds 2.1 to 2.4 above, based on facts and circumstances of case and in law, Hon'ble CIT(A) has erred in not appreciating that section 10A of Act is beneficial provision and should be given such interpretation so as to grant tax incentive intended by legislation. 2.6. Without prejudice to Grounds 2.1 to 2.5 above, based on facts and circumstances of case and in law, Hon'ble CIT (A) has erred in confirming incorrect estimation of operating margin percentage and actual profit margin by learned assessing officer. T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 28 of 31 Allowability of deduction u/s 10A on Interest Income 3. Based on facts and circumstances of case and in law, Hon'ble CIT(A) has erred in confirming action of learned assessing officer in denying deduction u/s 10A on interest income and considering interest income of Rs. 113,340 as'Income from other sources'., Set off of Unafasorbed Depreciation 4. Based on facts and circumstances of case and in law, Hon'ble CIT (A) has erred in upholding action of learned assessing officer in not granting set off of brought forward unabsorbed depreciation amounting to Rs. 2,58,273 as claimed by appellant in return of income. 4.1. Without prejudice to Ground 4 above, based on facts and circumstances of case and in law, Hon'ble CIT(A) has erred in upholding action of learned assessing officer in not granting benefit of set off of unabsorbed depreciation against interest income which has been treated as 'Income from Other Sources' by learned assessing officer. 21. first ground of appeal is against reopening of assessment u/s 147 of Act by issue of notice u/s 148 of Act. assessee filed return of income on 8.11.2007 showing annual income and claiming deduction 10A of Act of Rs. 27957136/-. On 27.03.2012 notice u/s 148 was issued and reasons for reopening which are identical to Assessment Year 2005-06 except figures. In nutshell reopening was made for disallowance excess deduction u/s 10A of Rs. 13343719/- on account of more than ordinary profits earned by assessee and consequently issue of interest income earned of deposit with banks of Rs. 113340/- offered for taxation of business income against view of Assessing Officer that it is chargeable to tax as income from other sources. We have already decided identical issue in Assessment Year 2005-06 in case of assessee wherein we have held that reopening made by LD AO is valid as no assessment was T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 29 of 31 framed u/s 143(3) of Act. Similarly in this appeal we hold that reopening has been validly initiated by Assessing Officer. Therefore, ground No. 1 of appeal of assessee is dismissed. 22. Ground No. 2 of appeal is with respect to restriction of deduction u/s 10A to Rs. 15636462/- against Rs. 27957136/- claimed by appellant. parties before us submitted that this issue is identical to issue decided in assessee s appeal for Assessment Year 2005-06 passed by coordinate bench in Assessment Year 2009-10. We have carefully considered rival contentions and also perused facts of case. As we have already decided this issue following order of coordinate bench in assessee s own case reversing order of ld CIT(A) in restricting amount of deduction to Rs. 15636462/- as against Rs. 27957136/-., we similarly allow appeal of assessee on this ground. In result ground No. 2 of appeal of assessee is allowed. 23. Ground No. 3 of appeal is against considering interest income of Rs. 113340/- as income from other sources by ld Assessing Officer as against sum offered for taxation by assessee as business income and thereby claiming deduction u/s 10A on this sum. 24. parties have confirmed that issue is identical to ground No. 3 of appeal of assessee for Assessment Year 2005-06. 25. We have carefully considered rival contentions. While disposing ground No. 3 of appeal of assessee in Assessment Year 2005-06 we have held against assessee holding that interest income is chargeable to tax under head T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 30 of 31 income from other sources. Accordingly, we also decided ground No. 3 against assessee. In result ground No. 3 of appeal of assessee is dismissed. 26. Ground No. 4 of appeal is against not granting set off and carry forward unabsorbed amount of depreciation amounting to Rs. 258273/-. It was submitted before us that unabsorbed depreciation of Rs. 258273/- claimed by appellant in return of income was not allowed as adjustment made to total income of assessee in Assessment Year 2006-07 for which appeal is pending before ITAT. ld CIT(A) has also given same reasons vide para No. 8.2 of his appellate order. From detail available on record it is not possible to ascertain about exact claim of depreciation which remained unabsorbed in hands of assessee same is allowable to assessee as current years depreciation as per provisions of section 32(2) of Act. In view this we set aside this ground of appeal to file of Assessing Officer to grant set off of this, sum if any remaining unabsorbed , in accordance with provision of section 32(2) of Act making consequential adjustment to computation of income after affording opportunity of hearing to assessee. In result ground No. 4 of appeal of assessee is allowed for statistical purposes. 27. In result appeal of assessee for Y 2007-08 is partly allowed. Order pronounced in open court on 23/09/2016. -Sd/- -Sd/- (DIVA SINGH) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated:23/09/2016 K Keot T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511 /Del/2014 Page 31 of 31 Copy forwarded to 1. Applicant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi T Kearney India Private Limited V ITO Y 2005-06 & 2007-08 ITA no 510& 511/Del/2014 AT Kearney India Private Limited v. ITO, Ward-1(1), New Delhi