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2017 (4) TMI 1541 - ITAT BANGALOREComputation of deduction u/s 10B - HELD THAT:- This issue is covered by the decision of coordinate bench of the tribunal in the assessee’s own case [2011 (7) TMI 1259 - ITAT BANGALORE] for the assessment year 2002-03, 2003-04 and 2004-05, wherein it was held that if freight expenses are not included in export turnover and total turnover, then they cannot be reduced while computing the deduction u/s 10B of the Act. In our view this issue is no more res integra and it is covered by the decision of Hon’ble Jurisdictional High Court [2011 (8) TMI 782 - KARNATAKA HIGH COURT] in 349 ITR 98. Therefore, the grounds raised are required to be allowed. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- The Bombay High in the case of Godrej and Boyce Mfg. Co. Ltd., Vs. DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT] has held that Rule 8D is prospective in nature and is not retrospective in nature and is only applicable from asst. year 2008-09 onwards. Therefore, in our view, Rule 8D cannot be invoked by the AO for calculating disallowance u/s 14A. Thus we set aside this issue to the file of the AO for computing reasonable expenditure incurred in relation to income which does not form part of the total income. TP adjustment - Comparable selection - HELD THAT:- Exclusion of Mold-Tek and Eclerx Services as they are into KPO services and the assessee is providing specialized services and is not simply into BPO services provider as projected by the assessee. The work scope and the agreement of the assessee with its AE clearly provides that the assessee is providing high end technical services to its AE and for that purposes has engaged various technical staffs. Vishal Information Technologies Ltd. And Infosys BPO was into outsourcing, therefore, it cannot be comparable with that of the assessee. Moreover, the business model of the comparable company viz., Vishal Information Technologies Ltd. is different from the assessee as it is getting its work done through outsourcing. Similarly, Tribunal has excluded the Infosys BPO Ltd. from the list of comparables after examining the comparability and size of the Infosys BPO in the judgment refereed herein above.
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