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2021 (2) TMI 145 - HC - Income TaxDisallowance u/s 14A - whether assessee has not determined the expenditure incurred in relation to exempt income and Assessing Authority has rightly held that even though there is no dividend income from the investment? - HELD THAT:- This Court in BIOCON LIMITED [2021 (2) TMI 112 - KARNATAKA HIGH COURT] has held that if no exempt income has accrued to the assessee the provisions of Section 14A do not apply.Since no exempt income has accrued to the assessee, therefore we hold that the provisions of Section 14A of the Act do not apply to the fact situation of the case. In the result, the second substantial question of law is answered against the revenue and in favour of the assessee. TP Adjustment - Disallowance of depreciation claimed on Software Expenses - direction issued by the Tribunal to the Transfer Pricing Officer to exclude depreciation from the cost of tax payer as well as comparables and directing the Assessing Officer / Transfer Pricing Officer to re-work the depreciation - Rule 10B of the Rules Applicability - method in which comparability analysis is to be conducted under the transactional net margin method - HELD THAT:- There is a need for making an adjustment to eliminate the differences in the accounting policies of the appellant and the comparable companies, in terms of the above Rules, especially given that in the bench marked international transaction is the sales by a captive service provider to its associated enterprises, on which depreciation would have no bearing and thus can be excluded altogether. The Tribunal, by placing reliance on the Hyderabad Bench of the Tribunal in the case of MARKET RESEARCH TOOLS PVT. LTD. [2014 (2) TMI 312 - ITAT HYDERABAD] held that the Dispute Resolution Panel erred in directing to exclude depreciation from the cost of tax payer as well as comparables. The aforesaid finding cannot be said to be perverse warranting interference of the Court in this appeal.
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