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2018 (5) TMI 1785 - AT - Income TaxMAT - Manner of computation of brought forward loss or unabsorbed depreciation, whichever is less to be deducted while computing books profit - Accounting treatment of MAT credit entitlement - Held that:- In principle we hold that the assessee is eligible for claiming MAT credit entitlement as reversal for Income Tax provisions. At the time of assessment proceedings the Assessing Officer has failed to examine as to whether MAT credit entitlement claimed by the assessee is on account of prepayment of tax. This fact requires verification. Accordingly, we direct the Assessing Officer to verify the same and decide the issue accordingly. Comparable selection - Held that:- Companies functionally different from that of assessee as engaged in software development business need to be deselected from final list. Addition is to be made by applying net profit rate the same should be applied to be expenditure incurred by the assessee for providing services to its AEs only - Held that:- In the case of Commissioner of Income Tax Vs. Thyssen Krupp Industries India (P.) Ltd. [2015 (12) TMI 1076 - BOMBAY HIGH COURT] affirming the view of Tribunal on this issue held that the adjustment which is mandated in terms of Chapter X is only in respect of international transaction and not transactions entered into by assessee with independent unrelated third parties. The adjustment in respect of international transactions should be restricted to international transactions and not to the transactions entered into with independent parties. AR has pointed that the CIT(Appeals) has accepted this proposition in assessment years 2002-03 and 2003-04 and the Department did not file any appeal against the order of Commissioner of Income Tax (Appeals) on this issue. This fact has not been rebutted by the DR. Thus, in view of the fact that this issue has been settled by the Jurisdictional High Court we find merit in the ground raised by the assessee.
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