Area, Survey No.85 & 86, Sadamangala Village, Krishnarajapuram Hobli, Bangalore560 066. PAN AACCC 2040 B APPELLANT RESPONDENT IT(TP)A No.570/Bang/2015 Assessment Year : 201011 M/s Harman Connected The Dy. Commissioner of Services Corporation Pvt. IncomeTax, Ltd., Circle6(1)(1), No.3&3A, EOIZ Industrial Vs. Bengaluru. Area, Survey No.85 & 86, Sadamangala Village, Krishnarajapuram Hobli, Bangalore560 066. PAN AACCC 2040 B APPELLANT RESPONDENT Page 2 of 55 IT(TP)A No.517 & 570/Bang/2015 Assessee by : Shri Muzaffar Hussain, CIT (DR) Revenue by : Smt. Tanmayee Rajkumar, Advocate Date of Hearing : 02022021 Date of Pronouncement : 01042021 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present cross appeal are filed by revenue and assessee against order dated 30/01/2015 passed by Ld.DCIT Circle 6(1)(2), Bangalore under section 143 (3) read with section 144C(13) of the Act for assessment year 201011 on following grounds of appeal: ITA No.517/B/2015 "1. The directions of the Dispute Resolution Panel are opposed to law and facts of the case. 2. On the facts and in the circumstances of the case the Dispute Resolution Panel erred in law in holding that the size, turnover and brand of the company are the deciding factors for treating a company as a comparable and accordingly erred in excluding Infosys Ltd., M/s. KALS Information Systems Ltd., Persistent Systems Ltd., M/s. Tata Elxsi Ltd., Sasken Communication Tech. Ltd., R.S.Software India Ltd. as comparables without appreciating the fact that the TPO had discussed regarding comparables and included the companies as rule 1OB(3) requires that not only the transactions but the enterprises should also be comparable in TNMM. 3. On the facts and in the circumstances of the case the Dispute Resolution Panel erred in appreciating that the directions issued are beyond the mandate of the provisions of Sec. 144C of the IT Act. 4. On the facts and in the circumstances of the case the Dispute Resolution Panel erred in super imposing the decision of other benches of FIAT in the case of assessee to reject these comparables when selection of comparables in a case depends in transfer pricing on assessee specific FAR analysis. 5. On the facts and in the circumstances of the case the Dispute Resolution Panel erred in relying on decision of other benches of FIAT and Page 3 of 55 IT(TP)A No.517 & 570/Bang/2015 ought to have decided the comparability of these companies on the basis of specific facts brought on record by the TPO in the case of the assessee. 6. On the facts and in the circumstances of the case the Dispute Resolution Panel erred in not appreciating that the payments for the purchase of computer software falls under the purview of 'royalty' as defined in Explanation 2 to sec. 9(1)(iv) of the Act and are liable for TDS u/s 194J of the Act. 7. On the facts and in the circumstances of the case the Dispute Resolution Panel erred in not appreciating that the disallowance u/s 40(a)(ia) of the Act was made on the findings of the AO for not deducting TDS on the purchase of software and also on legal and professional fees. 8. On the facts and in the circumstances of the case the Dispute Resolution Panel erred in not appreciating that the sub leased rental income is taxable without any adjustment against the business expenditure of the STPI units of the assessee. 9. On the facts and in the circumstances of the case the Dispute Resolution Panel erred in directing the AO to reduce expenses on telecommunication, Software expenses, travel and other expenses incurred in foreign currency both from export turnover and as well as from total turnover for the purpose of computation of deduction u/s 10A of the Income tax Act