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2017 (12) TMI 862 - AT - Income TaxExpenditure claimed u/s 10B - whether the assessee has not been approved as a 100% EOU by the Board appointed in this behalf by the central Govt. - Held that:- Where the assessee is registered under the STPI as a 100% EOU, it is entitled for deduction u/s 10B of the Act. See case of Secunderabad Software Services Pvt. Ltd [2014 (7) TMI 546 - ITAT HYDERABAD] Computation of deduction u/s 10B - Held that:- For the purpose of computation of deduction u/s 10B of the Act, if any expenditure is excluded from the export turnover, then the same should also be excluded from the total turnover. See CIT vs. Tata Elxsi Ltd,[2011 (8) TMI 782 - KARNATAKA HIGH COURT] AO not followed the direction of the DRP to take the “profit before depreciation” - Held that:- DRP has directed the AO to consider the margins of the assessee as well as the comparables after excluding the depreciation. Since the AO has not followed the said method while computing the ALP, we direct the AO to recompute the ALP after taking the margins of the assessee as well as the comparables after excluding the depreciation, in accordance with the directions of the DRP. The grounds on this issue are therefore, treated as allowed for statistical purposes. Interest on receivable - assessee had transactions with both the AEs and non-AEs and has not charged “interest on the receivable” - Held that:- Where the assessee is not charging interest on both AE and non-AE transactions and the receivables are outstanding for a period of less than six months, no interest can be charged. For the receipts beyond six months also, we find that the interest is not chargeable because the assessee has not charged any interest on receivable from the non-AEs. Therefore, the grounds of appeal relating to this issue are also treated as allowed.
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