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2016 (4) TMI 1221 - ITAT BANGALORE
TPA - comparable selection - Held that:- Companies into software development need to selected as final comparable similar as that to assessee. Companies need to be deselected on the basis of functional dissimilarities with that of assessee which is involved in providing software services.
The event of merger itself cannot a factor for exclusion of the company from the list of comparables also when the malgamated company is also engaged in the same business as that of the assessee-company.
Denial of relief u/s 10A in respect of recruitment fees earned - Held that:- CIT(A) correctly upheld the action of the AO in denying deduction u/s 10A in respect of recruitment fees placing reliance on the decision of the Hon’ble Supreme Court in the case of Liberty India vs. CIT [2009 (8) TMI 63 - SUPREME COURT] held that a receipt should have direct nexus with export activity, to be eligible for a deduction u/s 10A(1) read with section 10A(4) of the Act. As considered the facts and circumstances of the case and find that the receipts on account of recruitment fees, interest and miscellaneous activity do not have any nexus, whatsoever with the activity of export of computer software. As such they cannot be treated as part of business profits in the computation of deduction u/s/10A - Decided against assessee