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2016 (7) TMI 1406 - ITAT BANGALOREComputation of deduction u/s. 10A - Exclude the reimbursement of expenses incurred in foreign currency both from the export turnover as well as from total turnover - Held that:- We find that it was held in the Tata Elxsi Ltd. case [2011 (8) TMI 782 - KARNATAKA HIGH COURT ] that if an amount is reduced from the export turnover, the same amount has to be reduced from the total turnover also because the total turnover is nothing but sum total of export turnover and domestic turnover. Respectfully following this judgment, we decline to interfere with the order of the ld. CIT(A) on this issue. Accordingly, ground No. 2 of the revenue is rejected. Comparability selection criteria - Held that:- Certain companies should be excluded from the list of comparables merely on the basis of abnormal profits and losses is not sustainable. Although, the same company may be excluded if such exclusion is proper because of other reasons such a functional dissimilarities etc. but we find that as per the order of the ld. CIT(A), the is no discussion about some of the comparable companies on the basis of other aspects such as functional dissimilarity etc., and in the absence of any finding of the ld. CIT(A) on these aspects, we do not consider it proper to examine and decide these aspects in the absence of any finding on these aspects. In our considered opinion, the matter should go back to the file of the ld. CIT(A) for his decision on these aspects. We hold accordingly and set aside the order of the ld. CIT(A) and restore back this issue to his file for fresh decision for exclusion of these companies which are objected to by the revenue in ground No. 3 in the light of various arguments of the assessee on the basis of functional dissimilarities etc. Cogent reasoning by CIT-A for rejecting the diminishing revenue filter used by the TPO and therefore, on this issue, we find no reason to interfere with the order of the ld. CIT(A). Even if the accounting year of the comparable is not financial year, but the accounting year of the comparable company is closing within six months’ time frame then such company can be considered as comparable - Held that:- If the assessee or TPO wants that such company should be considered as a comparable then the assessee/TPO should be able to provide the data of the same company for the same financial year by adding the data of two years and then making exclusion of preceding period data and subsequent period data and hence, we feel it proper to set aside this matter back to the file of ld. CIT(A) for a fresh decision and if the assessee can furnish data of such comparable for the relevant financial year then such company may be considered as a comparable and not without that. Ld. CIT(A) should pass necessary order as per law after providing reasonable opportunity of being heard to both sides. Ground is allowed for statistical purposes. Companies functionally dissimilar with that of assessee need to be deselected from final list of comparability.
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