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2022 (4) TMI 1441 - AT - Income TaxTP Adjustment - comparable selection - turnover filter - HELD THAT:- We hold that companies listed in ground raised by the Assessee except Inteq Software Pvt. Ltd., whose turnover in the current year is less than Rs.200 Crores should be excluded from the list of comparable companies. TPO is directed to verify the turnover of these companies for Financial Years 2013-14 and 2014-15 and if in these years the turnover is less than 200 Crores, then the margins of these years shall be taken in working out the average profit margin of 3 years. RPT filter has to be applied adopting the threshold limit of 15%. We hold and direct accordingly. Inclusion of comparable companies compared to assessee engaged in software development services. Assessee cannot seek to exclude the company from the list of comparable companies, unless the Assessee is able to show that the presence of intangibles is owing to factors which can affect the functional comparability of this company with the Assessee. Set off and carry forward of business loss while assessing the total income of the Appellant - Provision of set off and carry forward as contemplated under Chapter-VI of the Act would not be attracted and therefore intra head set off sought by seeking to rely on the provision of section 70(1) of the Act and seeking to restrict the deduction u/s 10A and 10AA of the Act to the extent of gross total income as contemplated u/s 80A(2) of the Act, cannot be sustained. We therefore hold that deduction u/s.10A of the Act has to be allowed without setting off losses of non-10A unit before allowing the deduction under section 10A of the Act. In view of the aforesaid decision of Yokogawa India Ltd., the AO is directed not to set off the losses of non-10A units against profits of 10A units before allowing deduction u/s. 10A of the Act.
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