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2016 (12) TMI 1755 - AT - Income TaxTPA - Comparable selection - Held that:- Assessee is engaged in the business of rendering software development services to its Associated Enterprises ("AE"). Capco IT is remunerated on a cost plus basis for the services rendered thus companies functionally dissimilar with that of assessee need to be deselected from final list. Negative Working capital adjustment - Held that:- There is no need for making any negative working capital adjustment when assessee dos not carry any capital risk. In fact, TPO should have done necessary working capital adjustment to the profits of the selected comparables so as to make them comparable. We direct the TPO not make negative working capital adjustment. See Adaptec (India) (P.) Ltd. v. Asstt. CIT [2015 (6) TMI 288 - ITAT HYDERABAD]. Deductions u/s 10A computation - Held that:- Direct the A.O. to re-work deduction u/s 10(A) on the principle that what is excluded form 'Export Turnover' must necessarily be excluded from 'total turnover.'
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