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2016 (3) TMI 1442 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee deselected. Exclusion on the ‘abnormal profits’- As seen from the order of CIT(A) the reasons for rejection are that they are having ‘negative margins’/ losses. Therefore, grounds raised by the Revenue are not maintainable. Hence, rejected. Foreign Exchange Gain/Loss as operating in nature - HELD THAT:- This issue is held in favour of assessee and against Revenue in all the cases as the foreign exchange gain/loss is accruing as part of business activity and on the billing/billed amount. So, the same is rightly treated as part of operating income. M/S. CISCO SYSTEMS (INDIA) PRIVATE LTD. [2014 (11) TMI 849 - ITAT BANGALORE], SAP LABS INDIA (P.) LTD.[2010 (8) TMI 676 - ITAT, BANGALORE] AND M/S. GEM PLUS JEWELLERY INDIA LTD. [2010 (6) TMI 65 - BOMBAY HIGH COURT]. Deduction u/s 10A - exclusion of Telecommunication Charges for export turnover and total turnover - HELD THAT:- AO excluded the Telecommunications charges and Travelling charges from estimated turnover. Ld.CIT(A) following the Co-ordinate Bench decision has directed the AO to exclude the same from total turnover as well. This direction is as per the principles on the subject. The jurisdictional High Court in the case of CIT Vs. Tata Elxsi [2011 (8) TMI 782 - KARNATAKA HIGH COURT] has held that whatever is excluded from estimated turnover should also be excluded from total turnover. The direction of Ld.CIT(A) is upheld. Grounds are rejected.
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