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2015 (1) TMI 559 - AT - Income TaxTransfer pricing adjustment - assessee pressed adoption of turnover filter and to exclude the companies which are having turnover of more than ₹ 200 crores - selection of comparable - Held that:- Turnover is an important filter which has to be adopted for determination of the ALP. The FAR analysis would not alter the turnover of the company. In view of the turnover being higher than ₹ 200 crores in the case of the above companies, we direct the AO to exclude these companies from the list of comparables. - Decided in favour of assessee. We direct that KALS Information Systems Ltd., a software product company, be excluded from the comparables. The assessee before us is not developing any niche product,therefore direct that Tata Elxsi Ltd. be excluded from the comparables.Lucid Software Ltd. was not functionally similar to the assessee and the same has to be excluded from the comparables.here is no dispute that RPT filter in the case of Megasoft Ltd. was 17.08%, that of Aztech Software Ltd. was 17.78% and that of Geometric Software Ltd. was 19.34%. Coordinate Benches of the Tribunal are consistently following 15% as cut off mark for applying the RPT filter. Accordingly, we direct exclusion of Megasoft Ltd., Aztech Software Ltd. and Geometric Software Ltd. from the comparables. The AO is, therefore, directed to re-compute the ALP after excluding the companies directed by this Tribunal in this order. - Decided in favour of assessee by way of remand. Computation of deduction u/s 10A - Held that:- Computation of deduction u/s 10A of the Act and to adjust both export turnover as well as total turnover by reducing 50% of data link charges of ₹ 33,96,939/- for computing deduction u/s 10A of the Act is covered in favour of the assessee by the decision of the jurisdictional High Court in the case of CIT vs. Tata Elxsi Ltd. (2011 (8) TMI 782 - KARNATAKA HIGH COURT ). Thus we allow the said ground of appeal of the assessee and direct the AO to exclude data link charges both from the export turnover as well as the total turnover for computing deduction u/s 10A of the Act. - Decided in favour of assessee
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