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2017 (11) TMI 71 - AT - Income TaxTPA - selection of comparable - Held that:- NEC Technologies India Limited (NEC HCL) has been set up at Noida which is availing tax exemption under section 10A of the Act and is also having branch office in Japan (NEC HCL BO). The main activity of the taxpayer is with NEC group companies with regard to the contract awarded to NEC HCL. During the year under assessment, the taxpayer has entered into international transaction qua software development services, thus companies functionally dissimilar with that of assessee need to be deselected from final list. Deduction claimed by the taxpayer u/s 10A - change of accounting policy would result in taxpayer claiming deduction in AY 2011-12 with regard to invoices to be raised in AY 2012-13 when no such deduction u/s 10A is available - Held that:- The assessee has proved before AO the date on which the invoices relating to such unbilled revenue is raised as well as date of realization of such invoices and this fact is not disputed by the AO and is otherwise in accordance with the Accounting Standard – 09. Moreover when assessee has produced relevant documents viz. copies of FIRC before the AO to prove the fact that the export proceeds were realized from the six months of the export, disallowance of the deduction u/s 10A of the Act on unbilled revenue and relatable foreign exchange gain is not sustainable in the eyes of law. Consequently, we are of the considered view that the assessee is entitled for deduction of ₹ 12,11,000/- u/s 10A of the Act.
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