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2018 (5) TMI 2084 - AT - Income TaxTP Adjustment - comparable selection - Design & Engineering Services Segment - characterize the assessee as providing ITES - AR contended that the characterization of the assessee's services rendered to its AEs in this segment as "ITES" was wrong and the same should have been characterized as "Design and Engineering Services" - HELD THAT:- As it was not correct to characterize the assessee as providing ITES. First of all, the TPO does not appear to be following a consistent position over the years - in Assessment Year 2011-12, Revenue has also accepted the services rendered by this segment as 'Engineering & Design Services' - also characterization is not in tune with the functional analysis done in the TP Study as the TPO has not brought on record any evidence which might establish that the characterization has to be ITES only - for unclear/unestablished factual position as emerges we deem it appropriate to remand the matter back to the file of the TPO and direct that the characterization of the assessee shall be done in accordance with law, after affording the assessee adequate opportunity of being heard and to make submissions and file details etc required which shall be duly considered. Computation of deduction under Section 10A - seeking parity between export turnover and total turnover - exclusion of expenses incurred on freight and travel in foreign currency from both export turnover as well as the total turnover - HELD THAT:- This issue is no longer res integra and is covered by the judgment in the case of Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] wherein it has been held that if certain expenses are excluded from export turnover, the same should be excluded from total turnover. Thus we reverse the decision of the learned CIT (Appeals) and direct the Assessing Officer to compute the deduction under Section 10A of the Act by reducing the said expenses from both export turnover and total turnover. Charging of interest under Section 234B & 234D - HELD THAT:- The charging of interest is consequential and mandatory and the Assessing Officer has no discretion in the matter. This proposition has been upheld by the Hon'ble Apex Court in the case of Anjum H. Ghaswala 2001 (10) TMI 4 - SUPREME COURT]and we therefore uphold the action of the Assessing Officer in charging the said interest in the case on hand. The Assessing Officer is, however, directed to recompute the interest chargeable under Section 234B & 234D.
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