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2015 (7) TMI 1049 - AT - Income TaxTransfer pricing adjustment - selection of comparable - Held that:- Bodhtree Ltd., Tata Elxsi Ltd. and Infosys Technologies Ltd. as not comparable with a software development service provider such as the Assessee as dissimilar as compared to software development services provider. Working capital adjustment - Held that:- On going through the TPO’s order as well as annexure D referred to in the transfer pricing order on working capital adjustment, we find that the TPO has computed it at 5.97% but has not given any basis for restricting the adjustment to 1.71%. In various cases relating to transfer pricing adjustment, this Tribunal has been directing to give working capital adjustment on actual basis and the TPO, having arrived at 5.97%, ought to have adopted the same instead of restricting it to 1.71%. In view of the same, we deem it proper to remand this issue to the file of the AO/TPO for working out the ALP after giving adjustment of working capital as per the calculation of the AO in annexure D annexed to the transfer pricing order. Income tax of employee - whether treated as business expenditure or personal liability of the employee and is not the liability in the hands of the assessee-company ? - Held that:- Remuneration and the income-tax thereon paid on behalf of the employee therein, is an allowable expenditure u/s 37 of the Act. See Tata Yadogawa Ltd. vs. CIT [2010 (9) TMI 715 - Jharkhand High Court] and ABN Amro Bank vs. JCIT (2005 (6) TMI 218 - ITAT CALCUTTA-E) - Decided against revenue Disallowance of reimbursement of software expenses - Held that:- Since the issue is covered in favour of the revenue by the decision of the jurisdictional High Court, in the case of Samsung Electronic Co. Ltd. (2011 (10) TMI 195 - KARNATAKA HIGH COURT ) we see no reason to interfere with the order of the CIT(A) in making disallowance. - Decided against revenue Deduction u/s 10A - Held that:- The direction of the CIT(A) to reduce the expenditure incurred in travel, telecommunication etc., both from export turnover as well as total turnover for the purpose of computation of deduction u/s 10A of the Act as confirmed in the case of CIT vs. Tata Elxsi (2011 (8) TMI 782 - KARNATAKA HIGH COURT ) - Decided against revenue Rate of depreciation at 60% on circuit test boards - Held that:- The assessee had submitted before CIT (Appeals) that the ‘Circuit Test Boards’ are used as a specialized functional accessory to the ‘computer systems’. The CIT (Appeals) has accepted this contention of the assessee and following the decisions in the case of BSES Rajadhani Powers Ltd.[2010 (8) TMI 58 - DELHI HIGH COURT] held the ‘circuit test boards’ to be accessories and peripherals of computers and further held that the customs duty paid for purchase of such circuit test boards also qualifies for depreciation at the rate of 60%. We find that the CIT(A) has followed the precedents to allow depreciation at the rate of 60% and the learned Departmental Representative has not been able to rebut this finding with any evidence to the contrary. Therefore, we see no reason to interfere with the same.- Decided against revenue
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