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2016 (3) TMI 1236 - ITAT BANGALORETPA - selection procedure of comparability - Held that:- Assessee is a wholly owned subsidiary of M/s. Citrix Systems, USA and is engaged in providing software development services, thus companies functinally dissimilar with that of assessee need to be deselected from final list of comparability. Comparables on the reason of having accounts of different financial years and was difficult to compare the financial results - Held that:- We are of the opinion that the TPO is correct in rejecting this comparable on the different financial year filter. AS 21 may allow consideration of accounts and Company Law may permit having different financial year ending for consolidation accounts, but the data available in public domain cannot be adjusted to the financial year of assessee-company. There may be many factors which may affect the results in the intervening period. Unless the data is completely available, averaging the financial results to suit assessee’s financial year may give a distorted picture. Since the public data available pertain to a different financial year, we are of the opinion that the same can not be considered as comparable in the absence of suitable financial data. We direct the same to be excluded from the list of comparables. We also find that this company is not selected as a comparable in the similar cases in this assessment year VAT payments indicating product sales - M/s. VJIL Consulting Ltd. - Held that:- The company can be excluded, as there is no clarity on why the VAT was paid be it in UK or India. The same company was rejected in other similarly placed companies and we do not find any case in which this company is selected as comparable. Consequently, we are of the opinion that this company has to be excluded. Deduction u/s 10A - Held that:- Whatever is excluded from export turnover should also be excluded from total turnover for the purpose of computing deduction u/s. 10A of the Act
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