Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2014 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (11) TMI 137 - AT - Income TaxTransfer pricing adjustment – Selection of comparables - Inclusion of Axis IT & T Ltd. - Held that:- The company was found to be engaged in the business of providing ITES services as well as software development services and the Revenue generated from ITES services was only 53.26% of the total revenue - Since the relevant details of ITES segment were not available, the TPO held that M/s. Axis IT & T Ltd. could not be included in the list of final comparables - the relevant segmental details of Axis IT&T Ltd. are available - the details prepared and furnished by the assessee are not tallying with the corresponding figures appearing in the final accounts of Axis IT&T Ltd. As a matter of fact, policy adopted by Axis IT&T Ltd. for segment reporting is given in the relevant schedule forming part of the consolidated financial statements which shows that there are many items of revenue and expenditure, which relate to the group as a whole, are not allocable to segments on a reasonable basis - M/s. Axis IT&T Ltd. cannot be included in the list of final comparables in the absence of reliable segmental details. Exclusion of Genesys International Corporation Ltd. – eClerx Services Ltd. - Cosmic Global Ltd. - Functionally different company - Held that:- Following the decision in M/s. Parexel International (India) Private Limited Versus Asst. Commissioner of Income-tax [2014 (11) TMI 129 - ITAT HYDERABAD] - assessee is basically providing various services to the customers of its AEs in relation to human resources which are more or less centered around the employees of the prospective clients - they are providing full range of geospatial services to its customers - the mere fact that two services are placed under this category do not become automatically comparable - If a case providing one category of services under ITES is claimed as comparable with another in the category of service under ITES as per this circular, then it must be shown ex facie that it is broadly similar - there is a vast difference which make one quite distinct from the other - this company cannot be treated as comparable – Decided in favour of assessee. Computation of deduction u/s 10A - Inclusion/exclusion of the communication costs from the total turnover – Held that:- Following the decision in The Commissioner of Income Tax Versus M/s. Gem Plus Jewellery India Ltd. [2010 (6) TMI 65 - BOMBAY HIGH COURT] - wherein it was held that although the expression ‘total turnover’ has not been defined at all by the Parliament for the purposes of S.10A, when the definition of ‘export turnover’ excludes specifically certain items, the expression ‘total turnover’ cannot have a different meaning than the total turnover especially when the export turnover forms a constituent part of the total turnover for the purpose of the application of the formula - any item which is excluded for the purpose of computing export turnover has necessarily to be excluded for computing the total turnover for the purpose of computing deduction u/s 10A of the Act – Decided against revenue.
|