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2017 (8) TMI 1433 - AT - Income TaxAccrued income shown as unmatured advances in the Balance Sheet - Held that:- As decided in assessee’s own case [2017 (4) TMI 358 - ITAT HYDERABAD] what is to be seen is whether the assessee has followed a recognized method of accounting or not. If method followed by the assessee is such whereby correct income cannot be deduced, then only the assessing officer has the authority to adopt a reasonable basis to determine the total income. In the instant case it cannot be disputed that the assessee has followed a recognized method of accounting and hence, there is no question of adding any further amount to the total income. - Decided in favour of assessee Arm’s length Price adjustment u/s 92CA - comparable selection - Held that:- Assessee company entered into certain International Transactions pertaining to BPO services by way of Tele-calling services and sales Agency Services in respect of data bank belonging to the Associated Enterprises. The assessee company has been adopting cost plus 15% mark up for invoicing these Associated Enterprises in respect of Tele-calling Services. The assessee company in respect of sales agency, has been charging and paying sales commission of 10%. For purpose of complying with Transfer Pricing Regulations, the assessee company adopted cost plus 15% mark up as Arms Length Price in respect of Tele-calling and Comparative Uncontrolled, thus companies functionally dissimilar with that of assess need to be deselected from final list. Disallowance of expenditure included in employees cost - Held that:- We are of the opinion that this issue required to be examined by the Assessing Officer/TPO in detail whether the said amount claimed to have received by the assessee as reimbursement expenses are indeed reimbursement or not. In case of reimbursement at cost of the expenditure incurred on behalf of the AEs and has not formed part of the expenditure claimed as operating cost of the assessee then, the reimbursement should not be considered as part of assessee's sales. The amounts should be excluded in computing the operating profits. Since the Assessing Officer has not examined and it is also not on record whether the said expenditure was not part of claim under section 37(1) in the regular computation or not, in the interest of justice, we remit the matter back to the file of the TPO to examine the facts and to exclude only in the case the said amount is reimbursement of expenditure and there was no claim by the assessee in its computation of income
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