Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (4) TMI 1480 - ITAT BANGALORETP Adjustment - exclusion of companies from the set of comparables by applying the turnover filter of more than ₹ 200 Crores - HELD THAT:- Turnover of the assessee from international transactions is ₹ 17.07 Crores. Since the Dispute Resolution Panel (‘DRP’) has excluded six companies by applying the turnover filter of more than ₹ 200 Crores, the revenue has challenged the directions of the DRP and consequent assessment order. Though the filter of ₹ 200 Crores may not be appropriate filter however even if we apply the turnover filter of 10 times of the assessee's turnover on both sides, the companies which are having more than ₹ 171 Crores of turnover are required to be excluded. In view of the fact that the DRP has excluded the companies which are having more than ₹ 200 Crores turnover which is more than the filter to be applied at 10 times of the assessee's turnover which comes to ₹ 171 Crores, we do not find any reason to interfere with the impugned order and directions of the DRP as by applying the filter of 10 multiples all these six companies are required to be excluded from the set of comparables. Risk adjustment allowed by the DRP - HELD THAT:- When the assessee has not given any details and computation for risk adjustment then the claim of the assessee is purely hypothetical in nature. The co-ordinate bench of this Tribunal in the case of Zyme Solutions Pvt. Ltd. Vs. ITO [2016 (1) TMI 1436 - ITAT BANGALORE] has considered an identical issue. When the assessee has not made any attempt to quantify the risk or furnish the details for computation of risk adjustment then by following the decision of the co-ordinate bench, we decide this issue in favour of the revenue and set aside the directions of the DRP. Deduction under section 10A - Exclusion of expenditure incurred towards telecommunications, insurance and travel in foreign currency both from export turnover and total turnover - HELD THAT:- Respectfully following the aforementioned decision of the Hon’ble High Court of Karnataka in the case of Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] we uphold the directions of DRP in directing the Assessing Officer to reduce the expenditure incurred towards telecommunications, insurance and travel in foreign currency from both export turnover and total turnover for the purpose of computing the deduction under section 10A of the Act in the case on hand. Consequently this ground raised by revenue is dismissed. Restricting the deduction under Section 10A by reducing the foreign exchange loss from the export turnover - HELD THAT:- Foreign exchange loss has to be considered only arising from the sale proceeds and pertaining to the period relevant to the assessment year under consideration. Since the assessee has contended that it was not given an appropriate opportunity to make submissions therefore, in the facts and circumstances of the case and in the interest of justice, we set aside this issue to the record of the Assessing Officer for proper verification and adjudication of this issue as per law. We make it clear that foreign exchange loss is reduced from the export turnover, the same has to be also reduced from the total turnover for the purpose of computing the deduction under Section 10A
|