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2019 (10) TMI 1241 - AT - Income TaxAllocating the head office expenses while computing the profit eligible for deduction u/s.10A/10B - HELD THAT:- As decided in own case [2017 (10) TMI 233 - ITAT MUMBAI] this issue has been remanded back to the file of the ld. AO for fresh adjudication TP Adjustment - comparable selection - HELD THAT:- Emerson India is a wholly owned subsidiary of Emerson Electric Mauritius limited which is a wholly owned subsidiary of Emerson USA (ultimate parent company). Emerson India has 5 primary segments namely process management (value and measurement devices), appliance and tools (hand tools, fans, electrostatic air cleaners, and electric waste disposal ), climate technologies (compressors, thermostat and related equipment), industrial automation (motors and drives) and network Power (Power convergent and distribute equipment and networking products). Emerson India conducts his business through its head office located in Mumbai and different business divisions in Bangalore, Pune etc. thus companies functionally dissimilar with that of assessee need to be deselected from final list. Working capital adjustment - Entire workings of working capital adjustment had been furnished before the ld. TPO by the assessee which are enclosed in page 300 of the paper book. Hence, the ld. TPO ought to have considered the same on the list of comparables chosen by him while determining the ALP of the international transactions. Hence, we hold that the ld. CIT(A) had rightly directed the ld. TPO to grant working capital adjustment on the final set of comparables pursuant to the order of the ld CIT(A). Service tax refund for the eligible unit for the purpose of claiming deduction u/s.10A - HELD THAT:- It is not in dispute that service tax was paid by the assessee in earlier years for these eligible units and claimed as deduction, pursuant to which the claim of deduction u/s.10A of the Act had indeed been reduced to that extent. When the said service tax had been refunded to the assessee during the year under consideration, and also in view of the fact that the said eligible unit still continues for claim of deduction u/s.10A of the Act during the year under consideration, there is no reason to disturb the claim of deduction u/s.10A of the Act for the same. Moreover, we find from the provisions of Section 10A (4) of the Act that the entire profits of the eligible undertaking are entitled for deduction u/s.10A of the Act and there is no scope for exclusion of the service tax refund as not eligible for deduction u/s 10A(4) of the Act. We also find that the reliance placed on the Special Bench of Indore Tribunal in the case of Maral Overseas Ltd. vs. Additional CIT [2012 (4) TMI 345 - ITAT INDORE] also supports the case of the assessee in this regard. Accordingly, we find no infirmity in the order of the ld. CIT(A) in granting relief to the assessee - Decided against revenue
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