Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (1) TMI 775 - ITAT BANGALORETP Adjustment - Comparable selection - HELD THAT:- Assessee is a company engaged in the business of software development. It rendered software development services to its Associated Enterprise (AE), thus companies functionally dissimilar with that of assessee need to be deselected. CIT(A) directed computation of margins of company on a segmental basis - The plea of revenue is that the profit margin at the entity level should be taken, which in our view, cannot be accepted. In the TNMM, what is to be compared is only the transaction and margin from the transaction. The transaction for which the ALP is sought to be determined is rendering of software development services and therefore the plea of revenue to take the enterprise level profit margin is devoid of any merit. Whether working capital adjustment should be given or not? - We find that the reasons given by the CIT(A) for not allowing working capital adjustment are not the same reasons as was given in the case of Huawei Technologies India Pvt. Ltd. v. JCIT [2018 (10) TMI 1796 - ITAT BANGALORE] wherein Tribunal held that working capital adjustment has to be given. Deduction u/s 10A - Computation of deduction - HELD THAT:- Taking into consideration the decision rendered by the Hon'ble High Court of Karnataka in the case of CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] we are of the view that communication charges should be excluded both from export turnover and total turnover. We are of the view that as of today, law declared by the Hon'ble High Court of Karnataka which is the jurisdictional High Court is binding on us.
|