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2015 (12) TMI 361 - AT - Income TaxTransfer pricing adjustment - selection of comparables - Held that:- A company cannot be considered as comparable because of exceptional financial results due to mergers/demergers. See Petro Araldite (P) Ltd. Vs. DCIT [2015 (3) TMI 1010 - ITAT MUMBAI]. In view of the fact that there was a merger by way of amalgamation during the year itself, we hold that Nucleus Netsoft and GIS (India) Ltd. cannot be considered as comparable due to this extraordinary financial event. Vishal Information Technology Ltd. - the assessee’s outsourcing cost is roughly 8%. This is an important factor which has its impact on the overall profitability of a company. Several Benches of the Tribunal across the board have unanimously held this factor to be a relevant one in deciding the question of exclusion of a particular company from the list of comparables. Copies of some of such orders expunging companies on this score have been placed by the ld. AR on record. In view of this different business model adopted by Vishal Information Technology Ltd. (now known as Coral Hub Ltd.) vis-à-vis the assessee, we order for the omission of this company from the list of comparables. Kirloskar Computer Services Limited (Seg.) and Mercury Outsourcing Management Ltd. - TPO is directed to include the operating profit/operating costs of the ITES segment of these companies in the final set of comparables, after due verification of the necessary figures for determination of their operating profit margin etc. benefit of deduction u/s 10A - Held that:- In the absence of any distinguishing feature having been brought to our notice by the ld. DR, respectfully following the precedent, we grant the benefit of deduction u/s 10A in respect of profits of AEGSC unit. Treating interest on short-term deposits as ‘Income from other sources’ and thereby denying the benefit of deduction u/s 10A/10B - Held that:- Tribunal has decided this issue in the assessee’s favour in earlier years by holding such interest on short-term deposits to be in the nature of `Business income’ and thereby eligible for the benefit of deduction u/s 10A/10B.
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