TMI Blog2018 (7) TMI 472X X X X Extracts X X X X X X X X Extracts X X X X ..... as well as this Court and unless an established ex-facie perversity is found in the findings of the learned Tribunal, the appeal u/s.260A of the Act is not maintainable. - I.T.A.No.507/2016 - - - Dated:- 28-6-2018 - Dr. Vineet Kothari And Mrs. S. Sujatha, J.J. Mr. Sanmathi. E.I, Advocate- For the Appellant Mr. T. Suryanarayana, Advocate.- For the Respondent JUDGMENT 1. The Appellants - Revenue have filed this appeal raising purported substantial questions of law arising from the Order of the learned Income Tax Appellate Tribunal B Bench: Bangalore, Annexure A dated 13/05/2016 in IT(TP)A.No.1381/Bang/2010 for AY 2006-07. 2. The appellants - Revenue have suggested five substantial questions of law which are quoted be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertain comparables on the ground of having RPT in excess of 15% of the total sales/Revenue ignoring the TPO s observation that the basis for determining the threshold limit for eliminating companies having RPT transactions more than 25% was through the determination of Indian companies with foreign shareholding greater than 26% and, therefore, had its basis in the provisions of the IT Act, 1961, and the Accounting Standards AS-18? 3. In so far as the first purported substantial question of law raised by the Revenue is concerned, the same is covered by the Division Bench decision of this Court in the case of M/s.Tata Elxsi Ltd., Vs. Asst. Commissioner of Income Tax, decided on 20/10/2015 (2015) 127 DTR 0327 (Kar), which has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is treated as deemed export . Therefore, when Section 10A of the Act was introduced to give effect to the Exim Policy, the supplies made from one STP to another STP has to be treated as deemed export because Clause 6.19 specifically provides for export through Status Holder. It provides that an EOU/EHTP/STP/BTP unit may export goods manufactured/software developed by it through other exporter or Status holder recognized under this policy or any other EOU/EHTP/STP/BTP unit. What follows from this provision is that to be eligible for exemption from payment of income tax, export should earn foreign exchange. It does not mean that the undertaking should personally export goods manufactured / software developed by it outside the country. It m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was correct in holding that while computing relief under Section 10A of the IT Act, the amount of communication expenses should be excluded from the total turnover if the same are reduced from the export turnover? While giving the answer to the issue, the High Court, inter-alia, held that when a particular word is not defined by the legislature and an ordinary meaning is to be attributed to it, the said ordinary meaning is to be in conformity with the context in which it is used. Hence, what is excluded from export turnover must also be excluded from total turnover , since one of the components of total turnover is export turnover. Any other interpretation would run counter to the legislative intent and would be impermissible. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more than 15% RPT. 1. Aztec Software Ltd. 2. Geometric Software Ltd. (Seg.) 3. Megasoft Ltd. 21 to 23 . 24. Since the functional comparability of 5 companies which are in dispute before us have been discussed by the coordinate Bench of this Tribunal in case cited supra for the assessment year under consideration, therefore in view of the finding of the coordinate Bench of this Tribunal, we direct the AO/TPO to exclude 4 companies from the list of comparables for determination of ALP and re-examine the comparability of Flextronics Software Ltd. in light of the directions given by the coordinate Bench. 25 to 29 30. We find from the profit loss account of this company that there is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estic Legislations or the questions like Treaty Shopping, Base Erosion and Profit Shifting (BEPS), Transfer of Shares in Tax Havens (like in the case of Vodafone etc.), if based on relevant facts, such substantial questions of law could be raised before the High Court under Section 260-A of the Act, the Courts could have embarked upon such exercise of framing and answering such substantial question of law. On the other hand, the appeals of the present tenor as to whether the comparables have been rightly picked up or not, Filters for arriving at the correct list of comparables have been rightly applied or not, do not in our considered opinion, give rise to any substantial question of law. 56. We are therefore of the considered opinio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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