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2016 (1) TMI 1277 - AT - Income TaxTransfer pricing adjustment - computing deduction u/s 10A - Held that:- If export turnover in the numerator was to be arrived at after excluding certain expenses, the said expenses should also be excluded in computing total turnover in the denominator, as export turnover was but a component of total turnover. Therefore, the CIT(A) correctly allowed this ground of appeal and directed the AO to exclude from the assessee’s total turnover the communication expenses and foreign currency travel expenses which he has already excluded from the export turnover and to accordingly modify the computation of relief allowable u/s 10A. See CIT vs. Tata Elxsi Ltd.[2014 (9) TMI 1013 - KARNATAKA HIGH COURT]. Comparable selection - Held that:- We are of the opinion that (i) Flextornics Software, (ii) iGate Global Solutions Ltd., (iii) Infosys Technologies Ltd., (iv) Persistent Systems Ltd., (v) Sasken Communications, where turnover is more than ₹ 200 crores is to be rejected as comparable to that of the assessee. We find that Tata Elxsi Ltd. and Wipro Ltd., are not only having a turnover of more than ₹ 200 crores but are also functionally different as pointed out by the learned counsel for the assessee and hence, cannot be taken as a comparable to that of the assessee. We uphold the order of the CIT(Appeals) in directing the AO to include Maars Software International Ltd. as a comparable. The assessee provides software development services which include embedded and network management, technical documentation, system verification test and associated hardware design for the products developed by Infinera Corp., thus companies disimilar with that of assessee need to be deselected.
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