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2018 (1) TMI 795 - AT - Income TaxTPA - comparable selection criteria - methodical search process followed by the assessee for identifying the comparables - Held that:- Assessee is into call centre services thus companies functionally dissimlar with that of assessee need to be deselected from final list. Thus five comparables are excluded from the final list of valid comparables, the margin shown by the assessee would be within the safe limits of plus/minus 5%. Therefore, we are not commenting upon the other comparables, though the arguments advanced by the AR about the remaining comparables are found to be factually correct. In short, we hold that the assessee had proved that the list of comparables approved by the DRP(12 comparables)contain 8 comparables which should have been excluded. We hold that AMFL, Maple, GTL, TTL. DFL, STSL, AKSPL and ALT are not valid comparables for the purpose of determining the ALP of the IT's entered in to by the assessee for the year under consideration. Remanding the matter to the departmental authorities - Held that:- We are not inclined to allow premium on carelessness and callousness of the TPO and allow him a second chance to amend his errors. An erring officer does not deserve a new innings to continue unnecessary litigation. TP proceedings, like any other proceedings under the Act, have to be completed in a proper manner and the record should prove that, while making TP adjustment, the TPO had applied his mind to the facts and circumstances of the case. Posts of TPO. s were specifically created to determine the ALP of the IT. s. Considering the seriousness of the job the AO. s are not allowed to decide the value of IT. s. The scheme of the Act casts an added responsibility on the TPO. s to pass a reasoned, valid and proper order. In the case before us, we find that the TPO had committed several mistakes in the search proceedings and sending notices. So, we are of the opinion that it is not a fit case to be remanded. Profits eligible for deduction u/s. 10A - entitled to incremental deduction under section 10A - Held that:- We find that the assessee had filed a specific objection about not allowing incremental deduction, that the DRP did not decide the issue. Therefore, we are of the opinion that the matter should be restored back to the file of AO who would decide the Ground after affording reasonable opportunity to the assessee and after considering the judgment of Gem Plus Jewellery India Ltd. (2010 (6) TMI 65 - BOMBAY HIGH COURT) Disallowance u/s 14A - Held that:- We find that the AO had invoked the provisions of section 14A r. w. r. 8D of the Rules to make the disallowance. As provisions of Rule 8 were not applicable for the year under consideration. We direct the AO restrict the disallowance to 1% of the exempt income. Third grounds is partly allowed.
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