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2018 (6) TMI 1039 - AT - Income TaxTPA - comparable selection of Genesys International Corporation Ltd. (Genesys) - Held that:- Assessee is only engaged in providing back office IT enabled services to its AE and is also engaged in rendering transaction processing services, internet, consulting and voice based customer care services and, therefore, on functional dissimilarity Genesys cannot be cannot be taken as a comparable to the assessee company. Genesys is engaged in doing pioneering research in the area of image intelligence and recognition, mobile mapping as well as LIDAR whereas the assessee is not involved in any research and development activity and, therefore, this company cannot be considered a comparable on this account also Disallowance u/s 14A - Held that:- It is not clear as to whether the AO has considered only the investment which yielded the exempt income or the entire investment made by the assessee while computing the disallowance. It has also been submitted that the assessee had incurred an expenditure by way of interest on loan taken from M/s Orix Auto Infrastructure Services Limited which was specifically taken for the purpose of financing the vehicles and, therefore, the disallowance with respect to this interest under Rule 8D(2)(ii) could not be invoked - thus this issue needs to be adjudicated afresh by the AO/TPO Addition of disallowance u/s 14A while computing the book profit u/s 115JB - This issue is covered in favour of the assessee by the judgment of the Hon’ble Delhi High Court in the case of Pr. CIT vs. Bhushan Steel Ltd. (2015 (9) TMI 1424 - DELHI HIGH COURT) wherein it was held that disallowance u/s 14A r/w Rule 8D cannot be added while computing book profits u/s 115JB of the Act.
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