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2017 (7) TMI 768 - AT - Income TaxTPO - ALP determination - selection of comparable - Held that:- As the assessee company is engaged in development of software in various stages like engineering, research, development, debugging, coding, quality control checks, testing application, designing and programming and is exporting its services to M/s Adobe Systems Inc., USA and to M/s Adobe Systems Software, Ireland, thus companies functionally dissimilar with that of assessee need to be deselected from final set of comparable. Reimbursement charges disallowed by the A.O. having treated it to be the payment on account of royalty - assessee contended that he has claimed deduction u/s 10A and if any disallowance is made u/s 40(a)(ia) it would increase the deductions claimed by the assessee - Held that:- A.O. has disallowed the payment having treated the same as payment on account of royalty on non deduction of TDS. While adjudicating the issue the AO has not examined the aspect of increase in deduction claimed u./s 10A of the Act on disallowance of payment u/s 40(a)(ia) of the Act and therefore there would be no tax implication. Accordingly we set aside the order of A.O. in this regard and restore the matter to the A.O./T.P.O. to readjudicate the issue in terms indicated above. Accordingly the appeal is disposed of.
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