Dy. Commissioner of Income Tax, Circle 11(1), Bangalore. ..... Respondent. I.T.(T.P) A. No.1438/Bang/2014 (Assessment Year : 200910) (By Revenue) Assessee By : Shri Chavali Narayan, CA Revenue By : Shri B.R. Ramesh, JCIT (D.R) Date of Hearing : 09.08.2017. Date of Pronouncement : 15.09.2017. O R D E R Per Shri Vijay Pal Rao, J.M. : These cross appeals are directed against the order dt.8.9.2016 of Commissioner of Income Tax (Appeals)IV, Bangalore for the Assessment Year 200910. 2 IT(TP)A Nos.1370 & 1438/Bang/2014 2. First we take up the appeal filed by the assessee wherein the assessee has raised the following grounds : 1. " The learned CIT(A) has erred in law and facts, by upholding the addition of Rs. 6,16,22,813 made by the learned Assessing Officer ("AO") / Transfer Pricing Officer ("TPO") on account of corporate tax and transfer pricing matters. Corporate tax matters 2. The learned CIT(A) has erred in law and facts by upholding the order of the learned AO that the payments made by the Appellant amounting to Rs.2,60,62,411 in relation to 'software' license are in the nature of 'royalty' 3. The learned CIT(A) has erred in law and facts by upholding the order of the learned AO that the payments made by the Appellant amounting to Rs.39,62,893 in relation to 'software' license are in the nature of 'royalty'. 4. The learned CIT(A) has erred in law and in facts, by not accepting the contentions filed by the Appellant while distinguishing the case of the Appellant from the decision of the Karnataka High Court in the case of CIT Vs Samsung Electronics Co Ltd and Others (ITA No 2808 of 2006 and others) 5. The learned CIT(A) has erred in law and in facts, by upholding the actions of the learnedAO in considering some of the 'software' expenses amounting to Rs. 2,10,206 to be in the nature of capital expenditure and disallowing the same. Transfer pricing matters 6. The learned CIT(A) has erred in law and facts, by upholding the addition of Rs. 3,14,50,365 made by the learned AO / TPO on account of adjustment to the arm's length price of the international transactions entered by the Appellant with its Associated Enterprises ('AEs').; 7. The learned CIT(A) has erred in law and facts by not accepting the Appellant's plea in entirety and confirming with the learned AO/TPO on not accepting the economic analysis undertaken by the Appellant in accordance with the provisions of the Act read with the Incometax Rules, 1962 ("Rules"), and conducting a fresh economic analysis for the determination of the arm's length price in connection with the impugned international transaction and holding that the Appellant's international transaction is not at arm's length; 3 IT(TP)A Nos.1370 & 1438/Bang/2014 8. The learned CIT(A) has erred in law and facts by upholding the action of AO/ TPO in determination of the arm's length margin/ price using only single year data i.e. for FY 200809 and not allowing the use of multiple year data as applied by the Appellant in the transfer pricing documentation; 9. The learned CIT(A) has erred in upholding the action of AO/ TPO in disregarding the segmental financial information for the software development and IT enabled services rendered to its AE's provided in the transfer pricing documentation. Further the learned CIT(A) erred in upholding the action of AO/ TPO in reallocating the total costs on the basis of revenue and not providing an opportunity of being heard while reallocating the costs. Software development services transaction 10. The learned CIT(A) has erred in law and facts by upholding the action of AO/TPO in rejecting certain comparables considered by the Appellant in the comparability analysis by applying different quantitative and qualitative filters: a. The learned CIT(A) has erred, in law and in facts, by not accepting the Appellant's p