India Private Limited, Income Tax, No.52, 3rd Floor, Circle 12(5), 100 Ft. Road, Bangalore. Koramangala, Bangalore560 034 PAN: AAACL8712L (Appellant) (Respondent) IT(T.P) A. No.2511/Bang/2017 (Assessment Year: 201011) (By Revenue) Assessee By: Shri Umashankar Gautam, Advocate. Revenue By: Shri C.H.Sundar Rao, CIT (D.R) Date of Hearing : 26.09.2019 Date of Pronouncement : 15.10.2019 ORDER PER SHRI PAVAN KUMAR GADALE, JM : These are the cross appeals filed by the assessee and revenue against the order of learned CIT(Appeals) 7, Bangalore passed 2 IT(TP)A Nos.2532 & 2511/Bang/2017 under Section 143(3) r.w.s. 144C and 250 of the Income Tax Act, 1961 ('the Act'). 2. The assessee has filed the revised Grounds of appeal which are as under : 3 IT(TP)A Nos.2532 & 2511/Bang/2017 4 IT(TP)A Nos.2532 & 2511/Bang/2017 3. The Brief facts of the case are that the assessee is a wholly owned subsidiary of Veri Sign Inc, USA and is engaged in the business of providing Capital Software Services and Marketing Support Services to its Associated Enterprises (AEs) and with STPI Scheme of Govt. of India for claiming deduction under Section 10A of the Act and Software Development Services and sales and support services. The assessee filed the Return of Income on 12.10.2010 with total income of Rs.7,14,01,486 under normal IT provisions and Rs.10,01,14,926 under MAT provisions and Return of Income was processed under Section 143(1) of the Act. Subsequently the case was selected scrutiny and Notices under Section 143(2) and 142(1) of the Act along with Questionnaire were issued. In compliance, the learned Authorised Representative of the assessee appeared from time to time and Books of Accounts are produced and details were furnished. The Assessing Officer found that the assessee has claimed deduction 5 IT(TP)A Nos.2532 & 2511/Bang/2017 under Section 10A of the Act of Rs.5,14,98,661 and the assessee company has entered into international transactions with AE which exceeded the prescribed limit and matter was referred to the TPO with prior approval of CIT. The assessee has Indian Infrastructure to provide authority of services and busineses to find internet security transact across Internet, telecommunications and networks. The TPO found the PLI of operating profit on cost is as under : 4. The assessee's international and segmental information as per the TP Document referred at paras 3.1 and 3.2 as under : 6 IT(TP)A Nos.2532 & 2511/Bang/2017 5. The TPO called for the documents maintained under Section 92D of the Act, financials and copies of agreements. The assessee has filed the details on 14.3.2013 by letter dt.14.3.2013 with TP documents containing 16 comparables in respect of software development activities and applied the filters and TNMM method is treated as MAM. Whereas the TPO has issued Show Cause Notice and rejected the TP Study and applied the filter on companies current data and where the companies software development services in less than income of Rs.1 Crore was excluded and companies who have more than 25% Related Party Transactions (RPT) of sales were excluded and companies who have exports of less than 75% of sales were excluded and companies with Employees Cost which is having predominant losses for last three years including F.Y. are excluded whereas the TPO has rejected the assessee's submissions vide para 6 of the order and accepted assessee's comparables qualifying the filters applied by TPO in respect of L&T Infotech Ltd., Mindtree Limited, Sasken Communication Technologies, Think Soft Global Services. Whereas the TPO also selected comparables and made 7 IT(TP)A Nos.2532 & 2511/Bang/2017 analysis and a final set of comparables referred at para 9 page 23 of the TPO order as under : The TPO granted working cap