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2015 (3) TMI 267 - AT - Income TaxTransfer Pricing adjustment - Improper Selection of Comparables - Held that:- Following the decision of the co-ordinate bench of this Tribunal in the case of Agile Software Enterprises Pvt. Ltd. (2015 (1) TMI 600 - ITAT BANGALORE), we hold that the three companies Megasoft Ltd., Aztech Software Ltd. and Geometric Software Ltd. be excluded from the list of comparables. - Decided against revenue KALS Information Systems Ltd. was developing software products and not purely or mainly software development service provider. We therefore accept the plea of the Assessee that this company is not comparable was not comparable in the case of the assessees engaged in software development services business. Accepting the argument of the ld. counsel for the assessee, we hold that the aforesaid company should be excluded as comparables - Decided against revenue Accel Transmatic Ltd. has also been considered as a software product company, thus directed be excluded from the comparables. - Decided against revenue Tata Elxsi Ltd. has to be excluded from the list of comparable chosen by the TPO as the assessee before us is not developing any niche product. - Decided against revenue R. Systems International Ltd. the learned Authorised Representative of the assessee could not demonstrate that the revenue of ₹ 79.42 Crores is mainly from license fees or product development. In these factual circumstances, we find no reason to contradict the finding of the TPO that this company is mainly into software development services and therefore its inclusion by the TPO in the list of comparables cannot be faulted. This finding of ours is in tune with the decisions in transfer pricing appeals decided by the coordinate benches of this Tribunal, wherein the status of this company as being a software development services entity was not disputed. In this view of the matter, we uphold the inclusion of this company as a comparable company by the TPO - Decided against assessee. Deduction u/s. 10A - Held that:- It would be just and appropriate to direct the Assessing Officer that freight, telecommunication charges and insurance charges incurred in foreign currency are to be excluded from both export turnover as well as total turnover while computing the deduction under Section 10A of the Act, as has been prayed by the assessee in its alternate plea at Ground raised . In view of the acceptance of the alternate plea of the assessee, we are of the view that no adjudication is called for on Ground as to whether the aforesaid expenditure are required to be excluded from export turnover. - Decided in favour of assessee.
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