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2015 (7) TMI 491 - AT - Income TaxTransfer pricing adjustment - selection of comparable - Held that:- We direct the AO to exclude Infosys Ltd., from the final list of comparables both on the ground of size and diversity of activities as well as turnover of more than ₹ 200 crores. Exclusion of Flextronics Software Systems Ltd., iGate Global Solutions Ltd. (segment), Mindtree Consulting Ltd., Persistant Systems Ltd., and Sasken Communication Ltd., from the final list of comparables on the ground that their turnover is more than ₹ 200 crore. Exclusion of KALS Info Systems Ltd., Accel Transmatics Ltd. (segment), Tata Elxsi Ltd. (segment) from the final list of comparables on the ground of functional dissimilarity. If the above companies are excluded from the final list of comparables, the average arithmetical mean of the remaining companies would be 11% and after working capital adjustment it would come be 8.11%, whereas the assessee’s operating margin on cost was 10.48% and therefore, the international transaction is at arms’ length price being within + or -5 of the average arithmetical mean of the comparable companies. The working of the said computation is filed before us. We direct the AO to verify the same and if found to be correct, then no adjustment is called for. - Decided in favour of assessee for statistical purposes. Reduction of telecommunication expenses and traveling expenditure incurred in foreign currency from the export turnover only while computing the deduction u/s 10A - Held that:- This issue is covered in favour of the assessee in the case of CIT vs. Tata Elxsi (2011 (8) TMI 782 - KARNATAKA HIGH COURT) and respectfully following the same, we direct the AO to exclude telecommunication expenses as well as travelling expenditure incurred in foreign currency both from export turnover as well as total turnover for the purpose of computing deduction u/s 10A of the Act. - Decided in favour of assessee.
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