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2022 (4) TMI 1487 - AT - Income TaxTP Adjustment - Comparable selection - HELD THAT:- We direct the Ld.AO/TPO to exclude ICRA Techno Analytics as directed by the DRP from the finalist. Application of turnover filter - Comparables sought for exclusion deserves to be upheld on failure to fulfil turnover filter. We accordingly direct the Ld.AO/TPO to exclude Larsen & Toubro Infotech Ltd., Mindtree Ltd. and Persistent Systems Ltd. from the finalist. Working capital adjustment - HELD THAT:- Admittedly, the assessee do not bear any working capital risk as compared to the comparables. If at all any working capital adjustment is to be made in such a situation, it would be a positive working capital adjustment to bring the comparables on par with assessee. We therefore, direct Ld.AO/TPO to recompute working capital adjustment in actuals to the selected comparables to make them comparable with assessee. Deduction u/s 10A - exclusion of telecommunication expenses and insurance charges for rending technical servies outside India, both from the export turnover and total turnover for the purpose of computation of deduction u/s. 10A - HELD THAT:- It is not in dispute before us that in the case of CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] has held that charges/expenses relating to telecommunication, and expenses in connection with rendering technical services outside India, should be excluded both from export turnover and total turnover while computing deduction u/s.10A i.e., whatever is removed from the numerator should also be excluded from the denominator while working total turnover and export turnover for allowing deduction u/s.10A of the Act. The aforesaid decision of the jurisdictional High Court has been upheld by case of CIT v, HCL Technologies Ltd.[2018 (5) TMI 357 - SUPREME COURT] - we are of the view that the telecommunication charges and insurance charges should be excluded both from the export turnover as well as total turnover while computing deduction u/s.10A of the Act.
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