TaxTMI 
TaxTMI 
TaxTMI 
2021 (12) TMI 1528
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....rred by rejecting Sasken Communications Technologies Limited as comparable company on unjustifiable grounds ad Hon'ble Dispute Resolution Panel has erred in confirming the same. 2. The learned Transfer Pricing Officer has erred in accepting the following companies which as an entirely different functional and risk profile: 2.1 The learned Transfer Pricing Officer erred on facts and law by comparing the Assessee with Tata Elxsi Limited which has an entirely different functional and risk profile and Hon'ble Dispute Resolution Panel has erred in confirming the same. 2.2 The learned Transfer Pricing Officer erred on facts and law by comparing the Assessee E-infochips Limited which has an entirely different functional and risk profile and Hon'ble Dispute Resolution Panel has erred in confirming the same. 2.3 The learned Transfer Pricing Officer erred on facts and law by comparing the Assessee with Larsen &Toubro infotech Ltd. which has an entirely different functional and risk profile and Hon'ble Dispute Resolution Panel has erred in confirming the same. 2.4 The learned Transfer Pricing officer erred on facts and law by comparing the same Assessee with Infosys Limited whi....
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....onably high average margin of 34.69% whereas the lawmakers have prescribed a reasonable margin of 20% under the Safe harbor rules for the software development industry." 2. The assessee is engaged in the Software Development Services and filed its return of income for the year under consideration on 25.11.2014 declaring total income of Rs. 05,70,83,190/-. The case was selected for scrutiny through CASS and since the assessee has entered into international transactions during the previous year relevant to the year under consideration. Therefore, the case was referred to the TPO for determination of the Arm's Length price (ALP). The profile of the assessee as taken from the transfer pricing study document and recorded by the TPO in para 3 is as under:- "3. WaveCrest India is a wholly owned subsidiary of WaveCrest Group Ltd. Gibraltor ("WaveCrest Group Ltd. along with its subsidiaries is collectively referred to as "WaveCrest Group"). WaveCrest India provides backend software development and support services to tis associated enterprise (AE in singular and AE's in aggregate). WaveCrest India has responsibility to develop & test new applications/enhancements and provide mainte....
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.... as under:- S. No. Company Name OR OC Operating Profit OP/O C (%) 1. SOS INDIA BFSI LTD 164,09,33,805 164,09,33,805 36,51,44,689 22.25 2. TATA ELXSI LTD (seg) 558,25,94,000 558,25,94,000 124,4,28,000 22.29 3. MINDTREE LTD 2501,90,00,000 2501,90,00,000 541,50,00,000 21.64 4. R S SOFTWARE (INDIA) LTD 283,71,11,000 283,71,11,000 68,17,09,000 23.83 5. TECH MAHINDRA LTD (seg) 13739,35,00,000 13739,35,00,000 3274,55,00,000 81.00 6. e-INFOCHIPS LTD 113,59,89,199 113,59,89,199 92,01,23,238 24.04 7. LARSEN & TOUBRO INFOTECH LTD 3666,51,02,339 3666,51,02,339 881,52,69,543 27 8. CIGNITI TECHNOLOGIES LTD 43,58,33,603 43,58,38,603 12,04,59,559 64 9. INFOSYS LTD 32741,00,00,000 32741,00,00,000 11904,00,00,000 36.36 10. PERSISTENT SYSTEMS LTD 871,00,90,000 43,58,38,603 314,10,80,000 36.06 11. INFOBEANS TECHNOLOGIES LTD 22,23,74,867 32741,00,00,000 9,77,81,523 42.08 12. ICRA TECHNO ANALYTICS LTD 19,18,00,000 871,00,90,000 9,38,46,000 48.93 13. THIRDWARE SOLTIONS LTD 206,75,74,000 23,23,74,867 69,38,66,000 50.51 Average 35.44 The TPO also adopted TNMM as most appropriate method and oper....
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....making an addition on account of TP adjustment of Rs. 5,17,51,115/-. The assessee filed the objections against the draft assessment before the DRP on 24th January, 2018 which were disposed of by this DRP vide directions dated 11.09.2018. Thereafter the assessee filed an application dated 24.09.2018 for rectification of mistakes which was disposed by the DRP vide directions dated 26.10.2018. There are two set of directions by the DRP; first on the original objections raised by the assessee and thereafter on the rectification application filed by the assessee. Before the DRP, the assessee prayed inclusion of a set of comparables which were excluded by the TPO. The DRP accepted one comparable from the new set of the companies namely C.G.-VAK Software Export Ltd., as functionally comparable and added to the list of comparables. In pursuance to the directions of the DRP, the Assessing Officer passed the final assessment order dated 31st October, 2018 whereby the Assessing Officer taken the arm's length margin of ten comparables at 34.69% as under:- SI No. Comparable NCP 1. Mindtree Ltd. 21.64 2. RS Software (India) Ltd. 24.03 3. Tata Elxsi Ltd. 22.29 4. E....
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....nue filter cannot be excluded from the set of comaprables. He has relied upon the decision of Bangalore Benches dated 24.11.2020 in the case of M/s ARM Embedded Technologies Pvt. Ltd., vs. Income Tax Officer in IT(TP)A No. 3374/Bang/2018 dated 24.11.2020. 5. On the other hand, the learned DR has submitted that the DRP has considered the relevant facts regarding the Revenue from the different segments and noted that this company has income from sale of Software License to the tune of Rs. 27,28,760/- and commission received of Rs. 05,62,522/-. Further this company is in a different business model of providing onsite Software Development Services and a substantial part of the expenditure has been incurred in respect of foreign branch comprising of employees benefit expenditure of Rs. 20.02 Crores out of total expenditure of Rs. 22.73 Crores. Thus 85% of the total expenditure pertains to the foreign branch expenditure and substantial part of such expenditure has been incurred towards employees' benefit which shows that the business model adopted by this comparable company is different from the assessee. He has relied upon the order of the TPO as well as DRP. ....
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....re license constitute meager 0.5% of total revenue and TPO has not applied transfer development filter. The said company was rejected by the TPO for the reason that the company is engaged in providing provisional services, procurement installation, and employment support of ERP products. The DRP has rejected the comparable without applying the filter and there is no difference in the business model adopted by the company and the assessee. We on perusal of the Annual Report at Page 1373 of Paper Book, found IT(TP)A No. 3374/Bang/2018 that major revenues are from operations as per Note 19 being income from software services and commission received on sale of software licenses. The earnings as per Note 28 as per the financial statements, the company has earning from export of software and in the F.Y. 2013-14 which constitute more than 95% of income. Therefore we found these facts are not considered by the TPO or DRP and accordingly we restore this issue to the file of TPO for examination and verification." We found there is a functional comparability in respect of assessee profile and accordingly, we direct the TPO to include the comparable in the final list for determination ....
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....ion Technologies Ltd. : The company has a margin of 10.25% and was rejected by the TPO on the functional dissimilarity and was confirmed by the DRP observing that the company fails export turnover filter. The company earns revenue from licensing and software development and royalty and the company offers software products. The learned Authorised Representative submissions are that the company is functionally similar to the assessee's profile and services rendered are predominantly software development services and income from software products constitute a meager amount of total revenue shall not have any impact on the profitability of the company's software development IT(TP)A No. 3374/Bang/2018 segment. The learned Authorised Representative referred to the profit and loss account at page 1455 where the abridged statement profit and loss account was disclosed and as on 31.3.2014, the revenue from the operations of software products is Rs. 309.17 lakhs and software services are Rs. 3508.49 lakhs. The learned Authorised Representative emphasizing that there is no impact on the profits. We are of the opinion that the assessee company has customers in US and Eur....
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....e of M/s Global Logic India Ltd. vs. DCIT in ITA No. 4740/Del/2018 and submitted that the Tribunal has rejected this company as comparable to a Software Development Company on the ground of functional dissimilarity. He has also relied upon the decision of Hyderabad Benches of the Tribunal dated 6.8.2019 in the case of M/s Infor (India) P. Ltd. vs. DCIT in ITA Nos. 161 & 2307/Hyd/2018. 8.2 On the other hand, learned DR has submitted that as per annual report of this company, it provides Software Development Services and the activity under this segment is functionally comparable to the assessee and fulfil filters applied by the TPO. The TPO as well as DRP considers the segmental data only in respect of the Software Development Services and not in respect of product sales. He has referred to the directions of the DRP and submitted that the business of this company is primarily Software Development and Services and system integration and support. The Software Development and Services segment comprises of three divisions (a) Embedded Product Design (b) Industrial Design (c) Visual computing lab. Once the segmental financial data is available in the annual report then the othe....
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....ch points at Mumbai International Airport's new integrated terminal-2. The relevant part of the Annual Report has been reproduced by the learned TPO in his order. From the various achievements of the company mentioned in the Annual Report, we are of the opinion that the company has earned revenue from designing using softwares rather than software development services and software maintenance services. The other services of graphic animation and gaming includes major project for animation and visual effects for two feature films, which won the 59th Filmfare award and the star Guild Award 2014 for Best visual effects for it works in film " Dhoom 3". The company also carried out visual effects for the film "Bhag Milka Bhag". The services under the revenue from graphics animation and gaming are also different from services of software development." The Tribunal has noted that the company has earned Revenue from the designing using software than Software Development Services and software maintenance services. The other services of graphic animation and gaming includes major project for animation and visual effects for two feature films which are different from the services of the Sof....
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....pment services. Thus, the company is functionally different from the assessee. Considering the aforesaid aspect, the Co- ordinate Bench in case of Telcordia Technologies India (P.) Ltd. (supra), which is for the very same assessment year, has excluded this company as a ITA No. 1689/HYD/2019 and S.A. No.98/Hyd/2020, A.Y. 2015-16 M/s Infor (India) Private Limited, Hyderabad comparable. Similar view has also been expressed in the other decisions cited by the learned Authorized Representative. Thus, keeping in view the decisions of the Tribunal referred to above, we hold that this company cannot be a comparable to the assessee. 38. We have considered rival submissions and perused materials on record. Though, it may be a fact that the assessee may not have objected to selection of this company before the Transfer Pricing Officer, however, the assessee raised objections against selection of this company before the DRP as well as before us. The grievance of the assessee is, the company being involved in development of products and since no segmental details are available in the annual report, it cannot be treated as comparable. The Co-ordinate Bench in Tech Mahindra Ltd. (supra) h....
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....ns shall be considered as comparable to an international transaction. He has relied upon the direction of the DRP. 10. We have considered the rival submission as well as relevant material on record. The DRP has accepted this fact that this company is generating Revenue from sale of product though the same is not considered as in significant in comparison to the Revenue from Software Development Services. Further the objection of the assessee regarding the R&D activities and I.P./Intangibles were rejected by DRP for want of any supporting material. At the outset we note that the co-ordinate Bench of this Tribunal in the case of M/s. Infor India Pvt. Ltd. vs. DCIT (supra) has considered the functional comparability of this company in para 85 as under: "As regards E-Infochips Ltd is concerned, the contention of the assessee is that it is functionally different as it is engaged to software develop ent of software products and ITeS and that there no segmental data. The TPO &DRP have rejected the objections of the assessee. The learned Counsel for the assessee has referred to the disclosure of segments explanatory wherein the company has disclosed itself as primarily engaged in softwa....
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....ival submissions and as well as relevant material on record. At the outset, we note that the Delhi Benches of the Tribunal in the case of M/s Global Logic India Ltd. vs. DCIT (supra) has considered the functional comparability of this company in para 6.4 to 6.7 as under: "6.4 We have heard rival submission of the parties on the issue in dispute. The learned Counsel of the assessee submitted that the company owns significant intangibles (Rs.75,04,78,329/-) in the ITA No. 4740/Del./2018 form of the software and intangible assets under development. On perusal of fixed assets schedule, available on page S-1245 of the Annual Report ( page 116 of PB-2), we find that at the beginning of the year the assessee owned intangible assets of Rs. 153,42,45,196/- which included software of Rs. 143,61,95,196 ( 93 %), thus the intangible other than the software are insignificant. During the year, the company has sold/transferred the software and claimed depreciation, which resulted in net block of software at the end of the year to Rs. 33,22,11,879/-. The assessee has also shown intangible assets under development of Rs. 41,82,66,450/-, which makes the net intangibles owne....
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.... PES, in Director's report, (available on page S-1225 of the Annual Report or page 96 of PB-2), it is reported as under: "TRANSFER OF PRODUCT ENGINEERING SERVICES (PES) BUSINESS TO L&T TECHNOLOGY SERVICES LIMITED (LTTSL) AND WINDING UP OF GDA TECHNOLOGIES INC. (GDA INC.) As part of business restructuring undertaken within L&T Group, it was decided to consolidate the engineering services business under a separate subsidiary of L&T, L&T Technology Services Ltd. (LTTSL). Pursuant to this, the Company initiated and completed transfer of its Product Engineering Services (PES) Business Unit to LTTSL effective January 1, 2014, PES Business Unit was transferred by way of slump sale for total sales consideration of Rs. 489.53 crs based on ITA No. 4740/Del./2018 fair valuation, GDA Technologies Inc., USA (GDA Inc.), a wholly owned subsidiary of the Company was part of PES business with synergy in terms of the end customers they serve, primarily the semiconductor companies. Over last few years, the performance of GDA Inc. was adversely affected resulting in falling revenues and operational losses. Consequent to the transfer of PES business, certain IPs (Intellectual Propertie....
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.... Bench in the case of EMC Software and Services Pvt. Ltd. Vs. JCIT (supra) at para 6(ii) at page 592 & 593 of Paper Book as under : "6 (ii) L & T Infotech Limited : The company has a margin of 24.61% and has high brand value and is a market leader, high presence and the intangible income in proprietary products. Significant expenditure in foreign currency to the extent of 57.13%. During the year the product engineering business service of the company was transferred to its subsidiary. The company segments are divided into service cluster, industrial cluster and telecom business. As per the Annual Report of the company, the company has a significant capital work-in-progress and the company has developmental products. The comparable was excluded from the final list of comparable in assessee's own case for the Assessment Year 2011-12 by the DRP and further the comparable company was excluded by the co-ordinate Bench of Delhi Tribunal in the case of Pitney Bowes Software India Pvt. Ltd. Vs. ACIT 101 Taxman.com 350. The learned Authorised Representative also relied on CGI Information Systems & Management Consultants (P) Ltd. Vs. ACIT (2018) 94 taxman.com 97 and DCIT Vs. Taxman In....
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....of the assessee has submitted that as per the financials of this company, it provides solutions that span the entire software life cycle encompassing consulting, design, development, re-engineering, maintenance systems integration, package evaluation and implementation. In addition, the company develops/owns proprietary products like Finacle, Infosys m-Connect. It has also earned revenue by sale of its products. This company derives substantial portion of its revenue from proprietary products (including its flagship banking product suite Finacle). In the segmental P&L has a segment of software services & products. However, the allocation of income for software services & product is not provided. He has further submitted that the company has created a brand name for it, in the market and this 'brand value' has significant impact on the profits of the company. He has relied upon the following two decisions as under:- i. M/s Kony IT Services Private Limited, I.T.A.T. Hyderabad, ITA No. 2304/Hyd/2018, for A.Y. 2014-15. ii. M/s Infor (India) P. Ltd., I.T.A.T., Hyderabad, ITA Nos. 161 and 2307/Hyd/2018 A.Y. 2014-15. 16. On the other hand, learned DR has relied upon the o....
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....irm headquartered in Zurich, Switzerland. The acquisition was executed through a share purchase agreement for an upfront cash consideration of Rs. 1, 87 crore and a deferred consideration of up to Rs. 608 Cr. The deferred consideration is payable to the selling shareholders of Lodestone on the third anniversary of the acquisition date and is contingent upon their continued employment for a period of three years. The investment in Lodestone has been recorded at the acquisition cost and the deferred consideration is being recognized on a proportionate basis over a period of three years from the date of acquisition. An amount of Rs. 228 Crore and Rs. 85 Cr representing the proportionate charge of the deferred consideration has been recognized as an expense during the years ended March 31, 2014 and March 31, 2013 respectively." Extraction from Page 357 of PB-II 2.26 Merger of Infosys Consulting India Limited The Honorable High Court of Karnataka sanctioned the scheme of amalgamation of Infosys Consulting India Limited (ICIL) with Infosys Limited with an effective date of August 23, 2013 and an appointed date of January 12, 2012 ICIL was a wholly- owned subs....
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....ed Analytics, Security and Dependability, Advanced Mobility, Experience, and Innovation Co-Creation. The CoEs work towards establishing technology- based client innovation and differentiation through the establishment of Client Innovation Centres, publishing focused technology points of view, implementing proofs of concepts driven by our focus on client value, and conducting client workshops. Additionally, we have set up innovation centres with a number of our clients, university partners, and industry research consortia to drive co-creation. Infosys Labs focuses on developing significant new intellectual property to enhance the productivity and quality of our services while enabling differentiation in client offerings. During fiscal year 2014, Inlosys Labs filed 79 unique patent applications in the United States Patent and Trademark Office (USPTO), the Indian Patent Office and other jurisdictions. On a standalone basis, our research and development expenses for fiscal years 2014, 2013 and 2012 were Rs. 873 crore Rs. 907 crore and Rs. 655 crore, respectively." Extraction from Page 311 of PB-II "Research and development expenditure The R&D centers of the C....
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....le Delhi High Court in the case of CIT vs. Agnity India Technologies Pvt. Ltd (supra), we direct the TPO to exclude this company from the set of comparables. 18. Persistent Systems Ltd., The learned AR of the assessee has submitted that as per the segmental information in the annual report of the company, it is into Telecom and Wireless. Life science and Healthcare and infrastructure and Systems. Further, it is engaged in rendering "software product development" services to its customers as against the contract software development services provided by the Assessee. No segmental information is available for this company. It has diversified operations, which inter alia includes Intellectual Property ('IP') led business. This company is focusing on product development activities and product vertical contribute significant amount of revenue. 19. On the other hand, the Ld. DR has submitted that as per the annual report of this company, it is specializing in software product services and technology. Though there is revenue from sale of software services however, predominately this company earns revenue from foreign currency from sale of software and there is no reference to sale of ....
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....counts and Growth Accounts. Driven by growth in the platform based solutions and IP led business, the consolidated revenue of your Company recorded an increase of 15.2% in the US Dollar terms and 28.9% in the Rupee term during the year under review. The consolidated EBIDTA increased by 28.4% and the net profit after tax went up by 32.9% during the same period." (b) It is also evident from page no.701 of PB-II that the company is also engaged in R & D Activities and has incurred Revenue and Capital expenditure towards the same for Rs. 3.96 Crs. Extraction from Page 701 of PB-II "35. Research and development expenditure. The particulars of expenditure incurred on in-house research and development centre approved by the Department of Scientific and Industrial Research (DSIR) are as follows: For the year ended March 31, 2014 March 31, 2013 Capital 2.43 - For the year ended March 31, 2014 March 31, 2013 Capital 2.43 - Revenue 37.18 27.87 39.61 27.87 (c) Though the company's revenue flows from the three streams viz., products (IP Business), platforms (Solutions Integration) and services (Product Engineering), the main segments....
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.... comparables. 22. Infobeans Technologies Ltd. The Ld. AR has submitted that as per the Financials of the company it has revenue from sale of software products. The company has earnings in foreign exchange by export of goods calculated on F.O.B. basis. Further, the company also has MODVAT and sales tax deposits. Infobeans in engaged in Custom Application Development (CAD), content Management Systems (CMS), Enterprises Mobility (EM) and Big Data Analytics (BDA) which is high end service and distinct from routine software development services. These services also fall within the definition of knowledge process outsourcing (KPO) services as published in the Safe Harbour by CBDT. He has relied upon the decisions as under: (i) M/s Kony IT Services Private Limited. (ii) M/s. Alcatel Lucent India Ltd. 22.1 On the other hand, the learned DR has submitted that as per the annual report of this company, the entire Revenue drived by this company is from Software Services. 23. We considered the rival submissions as well as the relevant material on record. The co-ordinate Bench of this Tribunal in the case of M/s Kony IT Services Private Limited (supra) has considered the functional comp....
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....and, the learned DR has submitted that as per the annual report of this company it is engaged in the business of Software Development and Consultancy Services. The company's revenue recognition disclosure shows the Revenue from services from Software Development and implementation. Though in the profit and loss account, the company has mentioned the Revenue from sale of products however in the foot note, it is clearly mentioned that the Revenue was on account of export of software services. The Revenue from sale of license is very meagre of 0.03% of total operating Revenue. He has relied upon the directions of the DRP. 25. We have considered the rival submissions as well as relevant material on record. The DRP has not disputed the fact that this company is generating Revenue from various activities which includes export of software services being sale of software and separately on account of software services sales subscription and training. This company has also shown Revenue from sale of licenses. The Bangalore Benches of the Tribunal in the case of M/s ARM Embedded Technologies Private Ltd. vs. Income Tax Officer, Bangalore (supra) has considered the functional comparability of....
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....." 25.1 The Tribunal noted that this company is engaged in the development of software products and earns Revenue from sale of user license. There is purchase of stock during the year and also has intangibles. The coordinate Bench of this Tribunal in the case of M/s Kony I.T. Services Private Ltd., vs. DCIT, Hyderabad (supra) has also considered the functional comparability of this company at page 13 to 15 as under: "(ii) Thirdware Solutions Limited: (a) As argued by the Ld. AR it is evident from the Annual Report (page No. 235 of PB-II) that the company has derived revenue from sale of products amounting to Rs. 206.75 Crs. Further, there is no revenue from sale of services during the previous year. The assessee has also purchased stock amounting to Rs. 40.21 Crs. While as the assessee company is not engaged into any activity of producing physical goods. Page No. 235 of PB-II (b) It is also apparent that the company is receiving revenue from various streams and none of them were pertaining to software development services. As apparent from page 237 of PB-II, the company has received Revenue from training and subscription amounting to Rs. 59.32 la....
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....gible assets acquired the respective units of Thirdware Solution Limited are used in relation to the operation / services by the respective units only. Intangible assets internally developed by the company are capitalised at the total cost attributable towards the development of the product and is amortized on the straight-line method over its estimated useful life of three years, as perceived by the management." 10.1. In the case of the assessee company neither such expenses are incurred, or any intangibles are acquired during the relevant period. 11. Since the assessee company is primarily engaged in custom-built mobile applications and software support and maintenance related services to M/s. Kony Group of Companies, we are of the considered view that M/s. Third-ware Solutions Limited cannot be considered as a comparable company because of the reasons stated hereinabove." Following the earlier orders of this Tribunal, we direct the TPO to exclude this company from the set of comparables. 26. Ground No. 3 Ground no. 3 is regarding exclusion of certain companies by the TPO while selecting final set of comparables in pursuance to the fresh search undertaken by the TPO.....
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....6% of turnover, when no filter was applied by the TPO to exclude companies incurring R&D expenses. The company was included as comparable in IT(TP)A No. 3374/Bang/2018 the decision of co-ordinate Bench in the case of EMC Software and Services Pvt. Ltd. Vs. JCIT (supra) at para 7(iii) page 595 of Paper Book as under : " 7 (iii) Maveric Systems Limited : This comparable was rejected by the TPO and it was sought for inclusion by the assessee and whereas TPO has rejected without any basis and was excluded on the ground that the company was engaged in R & D activity and expenditure is 6% of total turnover. Similarly, the DRP has upheld the exclusion of the company. The learned Authorised Representative submitted that company's functional profile is comparable and applied the TPO filters. Whereas the DRP has observed that the company has incurred substantial expenses to the tune of 6% of turnover towards R & D and the tolerable limit is 3%. We found the observations of the DRP are without any basis. Accordingly we restore this issue to the file of TPO to give a logical conclusion and findings." We found there is a functional comparability in respect of assessee's profile and....
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....ompany is engaged in the Software Development and Consultancy Services which is functionally comparable with the assessee and shall be included in the set of comparables. 29.1 On the other hand, the learned DR has submitted that undisputedly this company has a negative network in the last three years and has been incurring persistent losses over the last three years. As per the NASSCOM report, the I.T. industry is growing @ 13 to 15% in these years. Further as per Note 14 of annual report, the company has reported inventory of Rs. 5.84 crores and cost of material at Rs. 1.07 Lacs which shows this company is not functionally comparable to the assessee. He has relied upon the TPO and directions of the DRP. 30. Having considered the rival submissions as well as relevant material on record, we note that the assessee has not disputed this fact that this company is having a negative network in last three years. Further this company is also showing the inventory which mean the company is engaged in software products. Even though, there may not be change in the inventory for the year but this fact cannot be denied that the company is having products and therefore, having regard....
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....revenue of one branch outside India which are unaudited and hence are not reliable. The learned Counsel for the assessee however, drew our attention to page 963 of the Paper Book, which is part of the Annual Report of Evoke Technologies Ltd wherein the revenue of Indian Branch of assessee is separately shown. Taking the same into consideration, we direct the AO/TPO to reconsider the comparability of this company by taking the revenue from Indian Branch only. Thus, the ground for Maveric Systems Ltd is rejected and for Evoke Technologies Ltd is allowed for statistical purposes." Accordingly, we remit this issue to the record of the TPO for re-verification of export turnover of this company to the total turnover and by taking only the Revenue of Indian branch of this company and excluding the foreign branches because the accounts of which are not audited. Needless to say before passing a fresh order, the assessee be given an opportunity of hearing. 34. Kals Information Systems Limited This company was excluded by the DRP on the ground that no information is available on the contribution of the Software Development Services to the total operating Revenue. Further this company is ....