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2013 (11) TMI 417 - AT - Income TaxTransfer pricing adjustments - selection of internal comparables - Held that:- The assessee was justified in undertaking internal bench marking analysis on stand alone basis by placing on record working of operating profit margin from international transactions with AEs and transactions with unrelated parties undertaken in similar functional and economic scenario, and the same should be the basis for determination of arm's length price in respect of international transactions undertaken with the associated enterprise. It was further concluded that the TPO had no mandate to have recourse to external comparables when in the present case, internal comparables were available, which could be applied for determining the arm's length price of international transactions with AEs. - Decision in Assistant Commissioner of Income-tax, Circle 3(1), New Delhi Versus Birla Soft Ltd. [2011 (1) TMI 406 - ITAT, DELHI] followed - matter restored before AO - Decided in favor of assessee. Deduction / Exemption u/s 11A - AO was of the opinion that this new unit was not altogether different unit but it was the extension of the existing unit as both the units were situated in the same building and doing same business. - Held that:- G-GDC STP unit situated at third floor, Sector 29, Noida is to be treated as separate unit and, accordingly, deduction u/s 10A was allowable. Deduction is available under section 10A - Losses of STP units to be set off against income from other units on the ground that STP units were exempt u/s 10A of the Act while profits of non STP units were taxable as normal business income – Held that:- Reliance has been placed upon the case of Hindustan Unilever Ltd. v. DCIT [2010 (4) TMI 206 - BOMBAY HIGH COURT], wherein it has been held that the losses of the unit eligible for deduction u/s 10B of the Act were held allowable to be set off against profits of the business – Further, reliance has been placed upon the Special Bench decision of ITAT, Bench 'C' Chennai (SB) in the case of M/s Scientific Atlanta India Technology Pvt. Ltd. vs. ACIT [2010 (2) TMI 658 - ITAT, CHENNAI], where it has been held that even though sec. 10A falls under Chapter III, it has been mentioned in the section itself that what is to be given is only a deduction and not exemption after amendment made with effect from 1st April, 2001. It was further held therein that the intention of this legislature w.e.f. 1st April, 2001 was to give only deduction and not exclusion from total income – In the instant case, matter restored to the file of A.O. for his fresh computation by treating the provisions of sec. 10A to be in the nature of deduction provision and not exemption – Appeal allowed for statistical purpose - Decided in favor of Assessee. Deduction u/s 10A for the income earned during the notice period – Sum of ₹ 35,52,781/- was received by assessee on account of notice pay and deduction u/s 10A was claimed – Held that:- amount received towards notice period is to be treated as income derived from the eligible undertaking and deduction u/s 10A shall be allowed accordingly - Assessee was entitled for deduction u/s 10A in respect of amount received on account of Notice Pay – Decided in favor of Assessee.
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