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2017 (8) TMI 225 - AT - Income TaxTransfer pricing adjustment - difference in Arm’s Length Price (ALP) of the international transaction relating to IT enabled services - selection of comparabale - Held that:- The assessee is wholly owned subsidiary of Exl Holdings and was engaged in business of rendering of transaction processing services and internet & voice based customer care services for its worldwide clients. The assessee furnished TP study and selected TNMM as the most appropriate method to benchmark its international transaction, namely, Information Technology enabled (ITes) services, thus functionally dissimilar with that of assessee need to be deselected from final list of comparability. Transfer pricing adjustment on interest on delay in receipt of receivable from associated enterprises - Held that:- In the present case, it is an admitted fact that the receivable represented continuing debit balances and revealed that the payment, even though due had not be made by the debtor. However, the exact nature of the receivables is not clear. It is not clear as to whether these receivables represented lending or guarantee or these were against the sales or advance or represented the deferred payments. So, in the absence of clear facts on record, we are unable to reach at a just conclusion. We, therefore, deem it appropriate to remand this issue back to the file of the AO/TPO for fresh adjudication in accordance with law by providing due and reasonable opportunity of being heard to the assessee and by considering the various decisions cited by both the parties, mentioned in the former part of this order. Disallowance of differential depreciation of Voice Recording Software License- Held that:- Direct the AO to allow the claim of the assessee for depreciation @ 60%. See CIT Vs BSES Yamuna Powers Ltd.[2010 (8) TMI 58 - DELHI HIGH COURT] Addition u/s 14A - Held that:- In the present case, it is not clear as to whether the AO had considered the only investment which yielded the exempt income or the entire investment made by the assessee. It is also not clear as to whether the investments were made by the assessee in the shares of subsidiary company out of commercial expediency. We, therefore, in the absence of the clear fact on record, deem it appropriate to set aside this issue back to the file of the AO/TPO to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. MAT computation - addition u/s 14A - Held that:- We direct the AO to exclude the amount of adjustment made u/s 14A of the Act r.w. Rule 8D of the Income Tax Rules, 1962 while computing the book profits u/s 115JB of the Act See Pr. CIT Vs Bhushan Steel Ltd. [2015 (9) TMI 1424 - DELHI HIGH COURT] Addition u/s 69C - Held that:- In the present case, it appears that during the course of assessment proceedings, the assessee was unable to produce the relevant documents in support of its claim. However, during the course of proceedings u/s 201(1)/201(1A) of the Act, the transaction was fully explained and clarified in detail. We, therefore, deem it appropriate to set aside this issue back to the file of the AO for verification and adjudication afresh. Deduction u/s 10A/10B in respect of income from sale of scrap - Held that:- The receipt from sale of scrap beng part & partial of the activity and being proximate thereto would also be within the ambit of gain derived from the industrial undertaking. We, therefore, do not see any infirmity in the directions of the ld. DRP on this issue and as such do not see any merit in the appeal of the department on this issue. See CIT Vs Sadhu Forging Ltd. [2011 (6) TMI 9 - DELHI HIGH COURT ] Disallowance proposed by the AO on account of depreciation on goodwill - Held that:- In the present case, it is noticed that the DRP directed the AO to allow the depreciation on the goodwill by following the decision of the ITAT wherein the case of CIT Vs Smifs Securities Ltd. [2012 (8) TMI 713 - SUPREME COURT] and the of Areva T&D India Ltd. Vs DCIT [2012 (4) TMI 79 - DELHI HIGH COURT] has been followed. We, therefore, by considering the totality of the facts, do not see any valid ground to interfere with the findings given by the ld. DRP on this issue.
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