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2016 (11) TMI 1534 - AT - Income TaxTPA - comparable selection criteria - Held that:- Assessee is into software development services thus companies functionally dissimilar with that of assessee need to be deselected from final list. Suitable adjustments on account of differences in the risk profile of the appellant vis-à-vis the comparables, while conducting comparability analysis - Held that:- Controlled and uncontrolled transactions are comparable only when adjustments with respect to significant differences between them in terms of risks assumed is made. The risk attributed to the assessee by the TPO is an anticipated risk whereas the risk attributed by the assessee to the comparables is an existing risk. In such situation, the TPO ought to have given the risk adjustment to the net margin of the corn parables for bringing them on par with the assessee company. Therefore, we direct the TPO to consider all the contentions of the assessee and after taking into account all the relevant material decide the percentage of risk adjustment to be made in accordance with law. This ground is accordingly, allowed for statistical purposes Computation of deduction u/s 10A - leased line charges, IPLC service charges (Leased Circuit) & foreign travel expenses exclusions - Held that:- The leased line charges, IPLC service charges (Leased Circuit) & foreign travel expenses ought not to have been excluded or Alternatively, if they are excluded from the export turnover similar exclusion be made in the Total turnover for arriving the deduction u/s 10A, which are in accordance with the decision in CIT v Tata Elxsi and accordingly we direct the AO to exclude them from the export turnover and also from the Total turnover, while computing the deduction u/s 10A.
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