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2015 (7) TMI 1276 - AT - Income TaxTransfer pricing addition - comparable selection criteria - functional similarity - Held that:- The assessee is engaged in the business of developing and providing custom Ebusiness applications, thus companies functionally dissimilar with that of assessee need to be deselected from final list. Computation of deduction u/s 10A - Held that:- Direction to reduce the expenses both from export turnover as well as total turnover for computation of deduction u/s 10A of the Act as relying on case of Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT ] Disallowance of interest amount paid on delayed remittance of tax - assessee submitted that interest amount paid on delayed remittance of tax is compensatory in nature and is not penal in nature and therefore it is not disallowable u/s 37(1) - Held that:- We agree with the contention of the assessee that interest paid on delayed deposit of TDS amount into Government account cannot be held to be penal in nature. See case of CIT Vs. Mahalakshmi Sugar Mills(1980 (4) TMI 1 - SUPREME Court) - Thus we direct the AO to allow the said expenditure in the hands of the assessee. TDS u/s 194C or 194I - Non-deduction of tax at source on rent paid towards service apartments - Held that:- These payments made are of ₹ 95,000/- each to three of the employees and not to the owner of the service apartments. Nothing has been brought on record by the AO that there is any contract between the assessee and the service apartment owner for rendering of any regular service during the relevant previous year. The services rendered by service apartments are similar to service rendered by Hotels and therefore clearly provisions of sec.194C are not applicable. Also even if it is exigible to tax as rent under section 194- I, the limit fixed for such application of the provision is ₹ 1,20,000/- for the relevant assessment year and therefore provisions of sec.194-I are also not applicable. - Decided in favour of assessee.
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