Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (7) TMI 1335 - AT - Income TaxTP Adjustment - Comparable selection - HELD THAT:- Assessee is into software development services provider thus companies functionally with that of assessee need to be deselected from final lit. When there is no change in the business activity of assessee for the year under consideration as well as in the functions of the said company then in view of the earlier order of this Tribunal in assessee's own case we hold that this company cannot be considered as a good comparable of the assessee and accordingly, the TPO/AO is directed to exclude the same from the set of comparables. Since we have directed the TPO/AO to exclude certain companies from the set of comparables in both segments, therefore the ALP has to be computed on the basis of the remaining comparables. We may clarify that in Sales & Marketing Support Service Segment, only one company is left in the list and therefore the TPO has to consider the benefit of second proviso to Section 92C and decide the same as per law. Deduction u/s 10A - HELD THAT:- The term export turnover is defined in clause (iv) of Expln. 2 inserted at the end of section 10A and provides that the expenditure on freight, telecommunication charges or insurance attributable to the delivery of article or thing or computer software outside India are required to be excluded from the consideration in respect of export brought into India. The expenditure if any incurred in foreign exchange in providing technical services outside India is also to be excluded from the consideration in respect of export of the undertaking. Thus if the expenditure in question is not falling in the category of charges of freight, telecommunication charges or insurance and it has been incurred in the foreign exchange then only when this expenditure is incurred in providing the technical services outside India, the same has to be excluded as per the definition provided under Explanation 2(iv) inserted at the end of Section 10A. Accordingly, we set aside this issue to the record of Assessing Officer for limited purpose of verification of the nature of expenditure and in case it is not for freight, telecommunication charges or insurance then the same cannot be excluded except it is incurred for providing the technical service outside India. Foreign exchange fluctuation gain/loss - HELD THAT:- As considered the relevant material on record. If the foreign exchange fluctuation gain or loss is arising on account of realization of export turnover then the same is in the nature of operating revenue or loss. Therefore we do not find any error or illegality in the order of the DRP in deciding this issue and holding that the same is operating in nature.
|