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2015 (9) TMI 1612 - AT - Income TaxReducing expenditure in foreign currency on telecommunication and travel, both from export turn over as well as total turnover for computation of deduction u/s. 10A - Held that:- High Court in the case of CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT]. Just because the judgment has not been accepted by the Revenue and it has moved an SLP before the Hon'ble Apex Court would not be a reason for not following the judgment. We find no error in the order of AO in this regard. Ground. 1 is dismissed. Comparable selection criteria - Held that:- DRP was justified in directing exclusion of comparables having turnover in excess of ₹ 200 crores. No reason to interfere. Ground 2 is dismissed. There is a clear finding given by the Tribunal in the case of selecting comparables, 15% is the threshould limit of RPTS. Accordingly, we set aside the order of DRP and direct the AO/TPO to consider 15% as threshold limit for RP transactions and consider all the comparables in the list of comparables which do not have RPT exceeding 15%, for the analysis of international transactions of the assessee for the impugned assessment year, provided other conditions for comparability are satisfied. Ordered accordingly. Ground 3 of the Revenue is treated as allowed for statistical purpose. Remit this issue of comparability of Akshay Software Technologies back to the file of the AO/TPO for fresh consideration in accordance with law, after considering the correct RPT of the said company. Kals Information Systems was not a proper comparable to a software development services company. Web site services is generally considered as falling within ITES segment. That ICRA Techno Analytics was also involved in web-development and hosting is clear from the background information mentioned in its significant accounting policies reproduced supra. Hence, in our opinion before considering ICRA Techno analytics as a proper comparable, it is necessary for a segmental analysis of its results. This issue, in our opinion, requires a fresh look by the AO/TPO so that necessary inputs are taken from the said company for proper analysis of its segmental results and deciding the comparability with that of the assessee. AO/TPO is directed to consider both Kals Information Systems Ltd and ICRA Techno Analytics Ltd, for comparability after ensuring that they pass the RPT filter, and if required segmental data can be obtained. We, therefore, set aside the orders of lower authorities with regard to Kals Information Systems Ltd (seg) and ICRA Techno Analytics (seg) back to the file of AO/TPO for consideration afresh.
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