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2017 (5) TMI 777 - AT - Income TaxTransactions pertaining to software development services provided by the assessee to its AE located in UK and Australia - Held that:- The maximum international transactions were undertaken by the assessee with its AEs of Canada as well as USA and only two transactions were undertaken with AEs of Australia and UK. Therefore the same ALP of 117.50% be applied with respect to remaining two international transactions. Accordingly, we set aside the order of CIT(Appeals) and direct the AO/TPO to apply the ALP of 117.50% with respect to the remaining transactions. Deduction u/s. 10A - Held that:- The requirement of Sec.10A and 10B are similar and therefore, in view of this categorical finding of the ld. CIT(A) that in the initial year, the percentage of old and used plant and machinery was more than 20%, the assessee is not eligible for deduction u/s. 10A of the Act, in the initial year as well as in subsequent years. Therefore, we find no reason to interfere with the order of the ld. CIT(A) on this issue in any of these two years which are before us by respectfully following the judgment of the Hon’ble Karnataka High Court rendered in the case of Sami Labs Ltd. (2010 (12) TMI 683 - Karnataka High Court ). Hence, we decline to interfere with the order of the ld. CIT(A) on this issue. Deduction u/s. 10A computation - Held that:- As the profits & gains u/s. 10A were not to be included in the income of the assessee at all, the question of setting off of loss of the assessee from any business against such profits & gains of the undertaking would not arise. Similarly, as per section 72(2), unabsorbed business loss is to be first set off and thereafter unabsorbed depreciation u/s. 32(2) is to be set off as deduction u/s. 10A has to be excluded from the total income of assessee, the question of unabsorbed business loss being set off against such profits & gains of undertaking would not arise. See C.I.T. & Another Versus M/s Yokogawa India Ltd. [2016 (12) TMI 881 - SUPREME COURT] Reduction of telecommunication expenses from the export turnover - Held that:- This issue is covered in the case of Tata Elxsi Ltd [2011 (8) TMI 782 - KARNATAKA HIGH COURT] in which it has been held that if certain expenses are excluded from the export turnover, the same should also be excluded from the total turnover.
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