TMI Blog2010 (7) TMI 795X X X X Extracts X X X X X X X X Extracts X X X X ..... It operates through two software development centers which are set up in Mumbai and Bangalore. Both these centers are registered under Software Technology Park License Scheme. The return of income for the year under consideration was filed by the assessee on 30-10-2004 declaring total income of Rs. 35,95,334. In the said return, deduction under section 10A was claimed by the assessee at Rs. 3,06,82,829 in respect of S.T.P.I, units. In the year under consideration, the assessee had entered into various international transactions with its overseas associate enterprises. A reference, therefore, was made by the Assessing Officer to the TPO to ascertain whether the said transactions are at arm s length or not. As per the report submitted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred by the assessee before the ld. CIT(A). During the course of appellate proceedings before the ld. CIT(A), the reasons for the alleged non-compliance to the notices issued by the Assessing Officer were explained by the assessee. It was also pointed out that proper and sufficient opportunity of being heard was not given by the Assessing Officer during the course of assessment proceedings. As regards its claim for deduction under section 10A, it was submitted on behalf of the assessee before the ld. CIT(A) that the said claim was duly supported by the auditor s report furnished along with the return of income in Form No. 56-F giving all the relevant details. It was also pointed out that the Assessing Officer himself had allowed the deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany that the difference between price shown by the assessee company in respect of transactions with overseas associated enterprises and the arm s length price determined on the basis of TPO s report was less than 5 per cent. Relying on proviso to section 92C(2), he held that no adjustment on account of arm s length price in respect of transactions with overseas associated enterprises, therefore, was called for. Accordingly, the addition made by the Assessing Officer on the basis of TPO s report was deleted by the ld. CIT(A). 4. Aggrieved by the order of the ld. CIT(A) giving relief to the assessee as mentioned above, the Revenue has preferred this appeal before the Tribunal on the following grounds : "1. On the facts and in the cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and to adopt only the relative party operating costs would defeat the purpose of adopting the comparables enterprise level profit level indicators." 5. We have heard the arguments of both the sides and also perused the relevant material on record. As regards the issue raided in ground No. 1 relating to the assessee s claim for deduction under section 10A, it is observed that the said claim was disallowed by the Assessing Officer,on the ground that there was no evidence produced by the assessee to support and substantiate the same. As noted by the ld. CIT(A) in this regard, the report in Form No. 56F giving all the details, however, was furnished by the assessee along with its return of income itself. Moreover, the similar claim of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his regard. We, therefore, find no justifiable reason to interfere with the impugned order of the ld. CIT(A) giving relief to the assessee on this issue and upholding the same, we dismiss ground No. 2 of Revenue s appeal. 7. As regards ground No. 3 4 relating to the adjustment on account of arm s length price in respect of transactions of the assessee company with its overseas associated enterprises, it is observed that there were certain mistakes in the relevant figures adopted by the TPO in his report as pointed out by the assessee before the ld. CIT(A). After correcting the said figures, a fresh working was prepared and furnished by the assessee before the ld. CIT(A) as under : Sl No. Particulars Amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso, if the difference between the price charged by the assessee and arm s length price determined by the most appropriate method is less than 5 per cent. the assessee has an option to take the price charged by him as arm s length price and no adjustment therefore is required to such price under section 92C(2). In the present case, it was found by the ld. CIT(A) on verification of the working prepared and furnished by the assessee that such difference is less than 5 per cent and this being an undisputed position, we find no infirmity in the order of the ld. CIT(A) deleting the addition made by the Assessing Officer on the basis of TPO s report by relying on the proviso to section 92C(2). The impugned order of the ld. CIT(A) on this iss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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