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2013 (11) TMI 422 - AT - Income TaxSelection of companies as comparables by the TPO – Held that:- The issue of comparability of Infosys to companies which are merely captive service provider is no longer RES INTEGRA as different benches of the Tribunal have held that Infosys being a giant company and into diversified activities cannot be treated as comparable - The fact that Avani Cimcon Technologies Ltd. is earning revenue from product development - The aforesaid company since is involved in software product development cannot be treated as comparable with companies which are providing only software development services and directed exclusion of the said company – As regards, Ishir Infotech Pvt. Ltd., is not a comparable company as it has failed both on account of employee cost filter as well as related party transaction filter – As regards, Lucid Software Ltd. and Megasoft Ltd., relying upon the order passed by the coordinate bench in case of Intoto Software India (P.) Ltd. [2013 (10) TMI 599 - ITAT HYDERABAD], it has been denied as being considered as comparables – As regards, Tata Elxi Ltd., relying upon the judgment of Mumbai Tribunal in the case of Telcordia Technologies India (P.) Ltd. [2012 (6) TMI 388 - ITAT MUMBAI], it was held that Tata Elxsi is engaged in development of niche product and development services, which is entirely different from the assessee company. Deduction u/s 10A of the Income Tax Act - Chennai and Hyderabad units should be considered as two distinct and separate units for benefit u/s 10A - It was submitted that benefit u/s 10A has to be granted separately for both the units as each of the unit has separate source of income – Held that:- Reliance has been placed on the assessee’ own case [2013 (11) TMI 1311 - ITAT HYDERABAD] - Chennai Unit is not formed by reconstruction of the Hyderabad unit, but, they ultimately held that Chennai Unit and Hyderabad Unit are not two distinct and independent units - Following the decision of the coordinate bench, allowed the ground of the assessee and direct the AO to allow benefit u/s 10A of the Act to the Chennai Unit – Decided in favor of Assessee. Whether there should be rejection of reimbursement of expenses to Virtusa Corporation, USA of an amount of ₹ 62,71,942/- from the export turnover while computing deduction u/s 10A of the Act – Held that:- Reliance has been placed on the decision of the Hon'ble Mumbai High Court in case of CIT v. Gem Plus Jewellery (India) Ltd. [2010 (6) TMI 65 - BOMBAY HIGH COURT], wherein it has been held that if communication charges, insurance charges and reimbursement of expenses attributable to the delivery of computer software outside India, are to be reduced from the export turnover then the same should as well be reduced from total turnover while computing deduction u/s 10A of the Act - Following the aforesaid ratio laid down in the said decisions, AO directed to reduce the amount of ₹ 62,71,942/- both from the export turnover as well as total turnover while computing deduction u/s 10A of the Act – Decided in favor of Assessee.
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