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2019 (10) TMI 1189 - AT - Income TaxTP Adjustment - MAM - Cost Plus Method ("CPM") OR Transactional Net Margin Method ("TNMM") - Comparable selection - TPO/DRP did not accept the stand taken by the assessee and it considered engineering segment also as part of ITeS, despite a separate TP analysis having been carried out by the assessee in engineering services and ITeS - HELD THAT:- Engineering services segment should be considered as distinct from ITeS and comparable companies chosen accordingly. We hold and direct accordingly and set aside the orders of the DRP and remand the issue for fresh consideration by the TPO/AO in accordance with the above observations and in accordance with law, after affording opportunity of being heard to the assessee. Deduction u/s 10A - Exclusion of certain items of expenditure incurred in foreign exchange from the total turnover without excluding the same from the export turnover - HELD THAT:- Taking into consideration the decision rendered by the Hon’ble High Court of Karnataka in the case of CIT v. Tata Elxsi Ltd . [2011 (8) TMI 782 - KARNATAKA HIGH COURT] we are of the view that expenditure incurred in foreign currency should be excluded both from export turnover and total turnover. We are of the view that as of today, law declared by the Hon'ble High Court of Karnataka which is the jurisdictional High Court is binding on us. Also upheld by HCL TECHNOLOGIES LTD. [2018 (5) TMI 357 - SUPREME COURT]
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