B.R. Baskaran ORDER
George George K., Member (J)
1. The Tribunal has disposed of the above appeal vide its order dated 28.08.2019. The assessee filed MP No. 59/Bang/2020 for non-adjudication of the following two issues, namely--
(i) Assessee's prayer regarding inclusion of Crystal Voxx Limited in the final list of comparable companies with respect of ITES segment (ground No. 4.7);
(ii) Assessee's submission that negative working capital adjustment should not be allowed (ground No. 4.9).
2. The ITAT vide its order dated 06.08.2020 in MP No. 59/Bang/2020 recalled the order in ITA No. 185/Bang/2018 for the limited purpose of adjudicating the above two issues. Accordingly, this case was heard on 09.08.2021. We shall adjudicate the above issues as under.
Assessee's prayer regarding inclusion of Crystal Voxx Limited in the final list of comparable companies with respect of ITES segment (ground No. 4.7)
3. The learned AR submitted that the issue is covered in favour of the assessee by the order of the Co-ordinate Bench of the Bangalore Tribunal in the case of FNF India Private Limited v. ACIT in IT(TP)A Nos. 195/Bang/2016 & 459/Bang/2017 (order dated 03.07.2019). The learned AR submitted that the list of comparable companies and the assessment year in the case of FNF India Private Limited (supra) and in this case are identical. Therefore, it was prayed that Crystal Voxx Limited be included in the final list of comparable companies in respect of ITES segment.
3.1. The learned Departmental Representative, supported the order of the AO/TPO and the CIT(A).
3.2. We have heard rival submissions and perused the material on record. On identical facts, the Bangalore Bench of the Tribunal in FNF India Private Limited v. ACIT (supra) had held that Crystal Voxx Limited should be included in the final list of comparable companies. We find that the list of comparable companies selected by the TPO in this case and the assessment year are identical to the case of FNF India Private Limited (supra). The relevant finding of the Hon'ble Tribunal in the case of FNF India Private Limited v. ACIT (supra) as regards the inclusion of the company Crystal Voxx Limited in the final list of comparables, reads as follow:-
"24. In ground No. 13, the Assessee has prayed for inclusion of Crystal Voxx Ltd. as a comparable company. This company was not regarded as comparable company with the Assessee by the DRP for the reasons given in Para 2.15 of its order i.e., for the reason that in the financial results, the Auditors have mentioned that this company was predominantly a Business Process Outsourcing (BPO) company and therefore this company cannot be said to be an ITES company. The learned counsel for the Assessee brought to our notice that in the very same note, the auditors have also mentioned that the only reportable segment was BPO. Therefore this company was a BPO company and the results of the BPO which is the only segment ought to have weighed in the mind of the TPO to include this company as a comparable company.
25. We have considered the submission of the learned counsel for the Assessee and are of the view that the plea raised by the Assessee is correct and the TPO ought to have regarded this company as comparable company because the only reportable segment of this company was BPO. We direct the TPO to include this company as a comparable company."
3.3. In view of the above order of the Co-ordinate Bench of Bangalore Tribunal in the case of FNF India Limited, we direct the AO/TPO to include Crystal Voxx Limited as a comparable company. It is ordered accordingly.
3.4. In the result, ground No. 4.7 is allowed.
Assessee's submission that negative working capital adjustment should not be allowed (ground No. 4.9)
4. The learned AR submitted that on identical facts, following judicial pronouncements have held that no negative working capital adjustment is required.
(i) Lam Research Indi........