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2015 (9) TMI 131 - AT - Income TaxTransfer pricing (TP) adjustment - assessee is seeking exclusion of only 2 comparable companies i.e. Alpha Geo (India) Ltd., and Vimta Labs from the final list of comparables - Held that:- assessee has conducted functional analysis by adopting the companies performing similar functions and activities without any similarity of products or industry. We find that M/s. Alpha Geo Ltd., is also in the business of research and development of seismic data, functions similar to the functioned performed by the assessee herein. There is no human interface or involvement in any of the activities above. The assessee has not brought out any difference in the assets employed or risks assumed by Alpha Geo. Therefore, we do not see any reason to interfere with the order of the CIT(A) on this issue. As regards Vimta Labs is concerned, we find that Vimta Labs is a research and development company researching into effects of various drugs on human beings. Though the function is similar i.e. research and development, there is involvement of living beings both animals and human beings and the margin would definitely depend on the result from such research and development involving human interface. Therefore, the said company cannot be considered as comparable to the assessee herein, particularly since the TPO himself has rejected the said company as a comparable to the assessee in the subsequent assessment year i.e. 2005-06. We are therefore inclined to direct the TPO/AO to exclude this company from the final list of comparables and direct the AO to re-determine the ALP in accordance with law. - Decided partly in favour of assessee. Disallowance of deduction for provision made towards interest payable to Central Excise Department and Sales Tax Department - Held that:- This issue stands covered by the decision of this bench of the Tribunal in the assessee’s own case for assessment years 1994-05, 1999-00, 2000-01 and 2001-02 wherein the action of the CIT(A) in disallowing interest payable to Central Excise Department has been upheld by the Tribunal. - Decided against assessee. Disallowance of deduction u/s 80-O - Held that:- Claim for deduction u/s.80-O are within the exclusive knowledge of the Assessee. It is for the Assessee to let in cogent evidence to substantiate its claim. The Assessee in our view has failed to do so and in the circumstances, the revenue authorities were justified in not allowing the claim for deduction. Assessee is not entitled to deduction u/s.80-O of the Act, is based on the fact that the Assessee has failed to establish its claim for deduction on the basis of the conditions contemplated by the amended provisions of law. - Decided against assessee. Deduction u/s 80HHC - CIT(A) held that the consideration received for development work from Robert Bosch was not liable to be reduced under Explanation (baa) to sec.80HHC - Held that:- Considering the decision of the jurisdictional High Court in the case of assessee’s own case for assessment year 1994-95 to hold that the consideration received for development work from Robert Bosch was not liable to be reduced under Explanation (baa) in computing the profits of the business. Since the issue is covered by the decision of the jurisdictional High Court in the assessee’s own case for the earlier assessment year and the CIT(A) has only followed the judicial precedent on the issue, we do not see any reason to interfere with the same. - Decided against revenue. Exclusion of 90% net interest received from the business profits for the purpose of deduction u/s 80HHC - CIT(A) has followed this Tribunal’s order in assessee’s own case for the assessment years 2000-01 and 2001-02 to hold that only net interest is to be excluded from the business profits for the purpose of computation of deduction u/s 80HHC of the Act. Assessee has also placed reliance upon the judgment of CIT vs Delhi Brass & Metal Works [2008 (11) TMI 42 - HIGH COURT DELHI ]. We find that this issue is now covered in favour of the assessee by the above decision. Therefore, we see no reason to interfere with the order of the CIT(A) which is in consonance with the judicial precedent on the issue. - Decided in favour of assessee.
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