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2014 (10) TMI 852 - AT - Income TaxTreatment given to foreign currency expenditure deducted from the export turnover for the purpose of computing the deduction u/s 10A - Held that:- As decided in CIT vs. Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT ] there should be uniformity in the ingredients of both the numerator and the denominator of the formula, Section 10-A is a beneficial section. It is intended to provide incentives to promote exports. If the export turnover in the numerator is to be arrived at after excluding certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator. The reason being the total turnover includes export turnover. The components of the export turnover in the numerator and the denominator cannot be different. Formula will be = Profits of the business of the undertaking × Export turn over / (Export turnover + domestic turn over) Total Turn Over Non deduction of tax at source - foreign currency expenditure in relation to recharge of international assignee cost were considered as technical service fee - Held that:- The issue requires a revisit by the Assessing Officer. Whether the employees of the affiliates abroad were rendering services to the assessee company, as a part of any technical services agreed to be rendered by such affiliates to the assessee, has to be seen based on the verification of actual services rendered by them. Assessee should also be given an opportunity to show that the employees came to India only on a secondment and had not rendered any technical services on behalf of the affiliates abroad. We, therefore, set aside the order of the Assessing Officer in this regard and remit the issue back to the file of the Assessing Officer for consideration afresh. - Decided in favour of assessee for statistical purposes. TPA - selection of comparable - Held that:- Assessee here is engaged in the software development business thus comparbles of same nature are to be accepted .
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