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2013 (6) TMI 500 - AT - Income TaxTransfer pricing adjustment - addition as difference in arm's length price - TPO took net operating cost at ₹ 11,54,91,263/- for a revenue of ₹ 12,13,93,695/- as against total revenue cost of ₹ 11,54,91,263/- for a total revenue of ₹ 13,59,91,472/- rectification of mistake application - DRP rejected the appellant's contention of excluding comparables of Wipro Ltd. and Infosys Technology Ltd. & KALS Information System (P) Ltd - Held that:- DRP rejected the appellant's contention without giving cogent reasons. Thus following the case laws, both giant comparables are to be excluded. Wipro Ltd. is into entirely a different business having a turnover of ₹ 8066 crore and Infosys Technology Ltd. is also absolutely un-comparable having a turnover of ₹ 15,648 crore as against a few crore of Rupees turnover of the appellant company. Reliance is placed on Agnity India Technologies Pvt Ltd v. ITO (2010 (11) TMI 852 - ITAT DELHI), DCIT v. Deloitte Consulting India (P.) Ltd. [2011 (7) TMI 583 - ITAT HYDERABAD], Telcordia Technologies India (P.) Ltd. v. ACIT [2012 (6) TMI 388 - ITAT MUMBAI]. As KALS Information System (P) Ltd activities are different hence need to be excluded as relying on Bind View India P. Ltd. vs DCIT [2013 (6) TMI 113 - ITAT PUNE]. Apropos the assessee's contentions about the arithmetical mistakes same have not been controverted and it is find that in the first round the TPO himself agreed to correct the mistake and in second round without pointing out any reason, the same has not been corrected. Since the assessee has been able to demonstrate that though DRP agreed with the assessee's contentions about the software testing services, however, while computing the same has been reduced. Consequently the mistake in this behalf is apparent from the order of the lower authorities. Thus merit in the argument of the assessee in this behalf and these mistakes are directed to be rectified as requested by the assessee. Loss of expenditure incurred on software holding - capital v/s revenue - Held that:- Disallowing of technical consulting fee - Held that:- AO in the preceding years accepted the allowability of deferred revenue expenditure in three years. First instalment of 1/3rd has already been allowed to the assessee. Once the expenditure is treated as revenue in nature, it is to be allowed either in one year or if the AO accepts then on the deferred revenue basis in the agreed years. Therefore, no justification in disallowance of this expenditure which is deleted. If alternate claim of the assessee is accepted in that case the assessee will be entitled to more deduction by way of depreciation if the legal provisions about the WDV and block are strictly applied. In view thereof the corporate addition in respect of 1/3rd expenses is also deleted. Assessee's appeal is allowed
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