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2013 (11) TMI 190 - AT - Income TaxAdjustment to Arm's Length Price u/s 92A - Comparability of the Comparable relied upon by the TPO - Transfer pricing adjustments - selection of comparables - Held that:- comparables of companies having turnover of less than ₹ 2000 crores and above ₹ 200 crores only need to be considered – Companies having turnover of more than 200 crores have to be eliminated from the list of comparables - ‘Turnover filter’ to be used as a guidelines for selection of companies as comparables in Transfer Pricing – Relying upon Genisys Integrating Systems (India) (P.) Ltd.[ 2011 (8) TMI 952 - ITAT BANGALORE] - for the purpose of classification of companies on the basis of net sales or turnover and also taking into consideration the Indian scenario, the classification made by Dun & Bradstreet is more suitable and reasonable. Computation of deduction u/s 10A of the Income Tax Act – Interpretation of Total Turnover & Export Turnover under 10A - Held that:- While computing deduction under section 10A of the Income Tax Act, 1961 expenditure incurred by the assessee, if excluded from the Export Turnover should also be excluded from the Total Turnover - Following CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] There should be uniformity in the ingredients of both the numerator and the denominator of the formula, Section 10-A was a beneficial section - It was intended to provide incentives to promote exports - If the export turnover in the numerator was to be arrived at after excluding certain expenses, the same should also be excluded in computing the export turnover as a component of total turnover in the denominator - The reason being the total turnover included export turnover - The components of the export turnover in the numerator and the denominator cannot be different The grievance of the assessee projected in the aforesaid grounds would get redressed, if the AO was directed to reduce the communication and travel expenses from the export turnover as well as the total turnover, while computing deduction u/s. 10A of the Act.
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