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2015 (11) TMI 1666 - AT - Income TaxTPA - selection of comparable - Held that:- Assessee, a company engaged in the business of provision of software development services of electronic integrated circuits and firmware development of integrated circuits to its parent company thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable. Risk adjustment - Held that:- In principle, the assessee may be granted risk adjustment, if so required in the peculiar facts of the case for bringing the comparable companies on par with the assessee. However, the quantum of risk adjustment to be granted, if any, is remanded back to the file of the TPO. The TPO is directed to examine the details of the quantitative computation of risk adjustment and attendant details submitted by the assessee justifying its claim for risk adjustment and to take into account the same along with all the relevant material before deciding on the percentage of risk adjustment to be allowed, if any, in accordance with law. TDS u/s 195 - Disallowance of Project Specific Costs under section 40(a)(ia) - Held that:- In the course of hearings before us, the learned Authorised Representative for the assessee fairly conceded that this issue is covered against the assessee and in favour of Revenue by the decision of the Hon'ble High Court of Karnataka in the case of Samsung Electronics Co. Ltd. (2011 (10) TMI 195 - KARNATAKA HIGH COURT), relied on by the A.O./DRP wherein held , in view of the provisions of Section 90 of the Act, agreements with foreign countries DTAA would override the provisions of the Act. In view of the said finding, it is clear that there is obligation on the part of the respondents to deduct tax at source under Section 195 of the Act, and also to which case the assessee was also party before the Hon'ble High Court. Respectfully following it we uphold the decision of the Assessing Officer. - Decided against assessee Advance Tax Credit - Held that:- We find this Ground was raised before the DRP and the DRP had directed the Assessing Officer to examine the claim of the assessee and allow as per the existing system of giving credit for prepaid taxes. In view of the above, the Assessing Officer is directed to comply with the directions of the DRP and give credit for the pre-paid taxes paid by the assessee as per law. Depreciation Adjustment - Held that:- We admit the additional ground raised for grant of depreciation adjustment and remit the matter to the file of the TPO to consider and examine the assessee's claim for adjustment towards depreciation Wrong computation of margins and wrong computation of working capital adjustment - assessee submitted that these are computational issues that are to be examined by the TPO and decided on merits - Held that:- We direct the TPO to examine the issues raised on the computation of margin and computation of working capital adjustment and decide the issues on merits after affording the assessee adequate opportunity of being heard and to make submissions and file details in this regard and to duly consider the same while deciding the issue.
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