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2016 (3) TMI 1300 - AT - Income TaxCalculating deduction u/s. 10A - Held that:- It is admitted that on a parity of comparison, whatever is reduced from the export turnover has to be reduced from the total turnover and this principle was accepted by the jurisdictional Karnataka High Court in the case of CIT Vs. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] which the Ld CIT(A) has followed. We do not see any reason to interfere with the above. Comparable selection - TPA - functional dissimilarity - Held that:- Assessee is into Software Devolopement Services thus companies functionally dissimilar with that of assessee need to be deselected from final list. Treating the expenditure on software licenses as ‘capital in nature’ and not giving credit of TDS by the AO - Held that:- Since the issue is covered in favour of assessee in earlier years, the claim of assessee as revenue expenditure is acceptable. However, as seen from the order of Ld.CIT(A), even after noticing the judgment of jurisdictional High Court he did not grant the benefit in the absence of details. Before us, Learned Counsel submitted that most of the expenditure is on microsoft licenses which are renewable on an yearly basis. This aspect require examination by AO. Consequently, while accepting the principle that software licenses are revenue in nature, examination of expenditure claim is restored to the file of AO. AO after due verification should allow the expenditure accordingly For claim of tds credit pursuant to decision in COURT ON ITS OWN MOTION VERSUS COMMISSIONER OF INCOME TAX AND OTHERS & ALL INDIA FEDERATION OF TAX PRACTITIONERS VERSUS UNION OF INDIA AND OTHERS [2013 (3) TMI 316 - DELHI HIGH COURT] CDBT issued Instruction No. 5 of 2013, dated July 8, 2013, directing that where assessee approaches AO with requisite details and particulars in the form of TDS certificate as an evidence against any mismatch amount, AO sould verify whether or not the deductor had made TDS payment in the government account and, in the event, the payment had been made, credit of the same would be given to assessee. It is therefore prayed that the AO be directed to verify and allow the entire claim of TDS amounting to ₹ 2,61,44,238/- as claimed by the company in its return of income. Since the issue is one of verification, we direct the AO to undertake the exercising of verification and allow credit.
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