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2011 (12) TMI 385 - AT - Income TaxArm's length price - Reference to DRP - During the course of assessment proceedings, the AO noticed that the assessee was engaged in the activities of software related to services carried out from STP units - TPO had no mandate to have recourse to external comparables when, in the present case, internal comparables were available, which could be applied for determining the arm's length price of international transactions with AEs - In the instant case, facts and circumstances in the year consideration are , indisputably, parallel to the facts and circumstances in the preceding assessment year while the directions of the DRP are also based on the conclusion of the ITAT in the preceding assessment year - Appeals are disposed of. Regarding deduction u/s 10A - AO during the course of assessment proceedings noticed that originally the assessee company had set up a STP Unit at 2nd Floor, Block-III, Sector-29, Noida and it was registered as STP unit in the year 1995 - assessee company was asked to explain as to why the new STP unit established be not treated as reconstruction of the assessee company's original business and why both units should not be treated as single unit , the nature of business and the kind of services provided by the assessee being the same in the two units - Held that: ITAT in the preceding assessment year accepted the claim of the assessee while holding that new unit was to be treated as a separate and independent unit for the purpose of computing deduction u/s 10A of the Act, following the order of the ITAT for the AY 2003-04 - Decided in favor of the assessee. Regarding set off of profit of non-STPI units against the loss of STPI units - Held that: ITAT in the preceding assessment year restored the matter back to the file of the AO for fresh computation by treating the provisions of section 10A to be in the nature of deduction provision and not exemption - Decided in favor of the assessee
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