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2013 (1) TMI 794 - AT - Income TaxDetermination of Arm's length Price - Held that:- assessee adopted transaction net margin method (TNMM)to determine the ALP - TPO however rejected the assessee’s objections and selected 26 external companies as comparables - In the case of software services rendered by the appellant to its AE the functions performed by the appellant were the same as those performed by unrelated parties (Non-AEs) - internal” TNMM was selected as the most appropriate method - internal comparables are more appropriate and are to be given precedence over external comparables - The computation of arm’s length price in case of TNMM is done as per Rule 10B(1)(e) - assessee had also filed detailed functional similarity as well as the methodology of apportionment of expenses - TPO to adopt the internal TNMM instead of external TNMM - TPO to verify the cost allocation and the PLI and margin computation of software services rendered by the assessee to its AE - Remanded back for statistical purposes Deduction u/s 10A - computed the business loss - Held that:- deduction under section 10A is undertaking specific and should be computed without considering the losses of other industrial units, which is a non-STP unit - Decided in favor of assessee
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