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2015 (1) TMI 1360 - AT - Income TaxTransfer pricing adjustment - selection of comparables - Held that:- Assessee being a software development company,thus companies functionally dissimilar with that of assessee need to be deselected from final list. Deduction u/s 10A computation - Held that:- Vis-ŕ-vis the expenditure of foreign travel we are of the opinion that the definition of “export turnover” given in clause-iv of Explanation to Section 10A of the Act, does not give room to the interpretation sought by the assessee. Assessee has no case that such expenditure was not incurred in foreign exchange for providing technical services outside India. However, its claim that foreign travel expenditure as well as telecommunication expenses once excluded from the export turnover have also to be excluded from the total turnover, while computing the deduction u/s 10A of the IT Act, is acceptable in view of the decision of the Honble jurisdictional High Court in the case of CIT Vs M/s Tata Elxsi Ltd., (2011 (8) TMI 782 - KARNATAKA HIGH COURT). We therefore, direct the AO to exclude these amounts from the total turnover, while computing the eligible deduction u/s 10A of the Act. Claim of expenditure relating to lease rental income - suh rental income was considered as part of income from other sources - Held that:- We find from the records that assessee had made such a claim before the DRP in its submissions. If the assessee had incurred expenditure for earning lease rental income which was considered under the head” Income from other sources” then the expenditure incurred by it for earning such income will have to be allowed under section 57(iii) of the Act. However, the claim of the assessee needs to be examined by the AO. We are of the opinion that the issue has to be considered by the AO and appropriate relief to be given to the assessee, if it is eligible according to law. Ground is allowed for statistical purposes.
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