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2018 (7) TMI 1468 - AT - Income TaxTPA - non-recalculation of the operating cost of the assessee company as per the directions of the Hon'ble DRP issued on 29.9.2015 to keep the deferred revenue expenditure and finance cost out of the computation of margin - Held that:- We find that though the DRP has given a direction, the AO has not calculated the margin in accordance with the directions of the DRP. We therefore, remand this issue to the file of the AO with a direction to re-compute the operating cost of the assessee in accordance with the directions of the DRP. Ground No.3.a is accordingly treated as allowed for statistical purposes. comparable selection criteria - Held that:- We find that the DRP has retained Persistent Systems & Solutions Ltd, Persistent Systems Ltd and Sasken Communication Technologies Ltd as comparables and the average ratio of the employee cost to sales of these three companies is 58% as against the employee cost of the assessee at 76% and the difference is 18%. This difference is not negligible to be ignored. Every difference which is likely to affect the comparability analysis has to be taken note of and suitable adjustment has to be made to bring the comparables on par with the assessee for comparing of their operating margin. In view of the same, we deem it fit and proper to remit this issue also to the file of the AO with a direction to make suitable adjustment to the employee cost of the assessee if there is any underutilization of employees available with the assessee and thereafter re-compute the operating margin of the comparables for arriving at their average margin Disallowance u/s 10A - assessee has not submitted the evidences/receipts in support of the claim of deduction u/s 10AA - Held that:- The assessee has drawn our attention to the assessee’s petition filed before the Tribunal seeking admission of the additional evidence being Form No.56F in support of the claim and sought admission of the same. Since these documents goes to the root of the matter, we deem it fit and proper to remand this issue to the file of the AO for verification of the documents and consider the allowability of deduction u/s 10AA of the Act on the basis of such documents.
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