Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 575 - AT - Income TaxTP Adjustment - Comparable selection - HELD THAT:- Companies functionally with that of assessee need to be deselected from final list. R System International was rejected on the ground that it has different accounting year - If the audit results are available, then the TPO can extrapolate qua the figure to fit into financial year ending in March. Since R Systems is functionally similar to the assessee, we direct the TPO to adjust the audited quarterly figures by extrapolating them in the FY of the assessee and include this company in the final set of compatibles. CG VAK - As assessee stated that this company passes turnover figure as the entity wide turnover of ₹ 594 crores and segments are reported to comply with requirements of AS-17. The learned counsel further pointed out that this company was accepted by the TPO in A.Y 2009–10. We are of the considered view that the TPO should look into the financials of this company once again and decide whether it passes the turnover filter and decide afresh the inclusion or otherwise of this company in the final set of compatibles. Grounds relating to TP adjustments are decided accordingly. Denial of deduction u/s 10A on additional receipts claimed by filing the revised return of income - HELD THAT:- Since the assessee has been allowed deduction under section 10A of the Act by the first appellate authority [against which revenue is in appeal] the assessee is entitled for claim of deduction under section 10A of the Act on additional receipts claimed by filing revised Return of income. We, accordingly, direct the Assessing Officer to allow deduction under section 10A of the Act on additional receipts. Interest income on fixed deposits and miscellaneous income - denied for deduction under section on the ground that such income does not constitute ‘business income’ as envisaged under section 10A - As decided in M/S. HEWLETT PACKARD GLOBAL SOFT LTD. [2017 (11) TMI 205 - KARNATAKA HIGH COURT] we direct the Assessing Officer to allow claim of deduction under section 10A of the Act on interest income. No details of miscellaneous income has been given and, therefore, we are not in a position to examine the nexus with the business income of the assessee. Exclusion of Accentia Technology Pvt Ltd and Infosys BPO Ltd by the ld. CIT(A) - Accentia Technology is concerned, we find that there is an extraordinary event of merger with Accentia Info Serve Pvt. Ltd. Pursuant to this event, effect on overall profit from profitability and turnover cannot be ruled out. This single factor alone is sufficient for exclusion of this company from the final set of comparables and no interference is called for. Infosys BPO we are of the opinion that this company is a giant company in the area of development of software and it assumes all risks leading to higher profit. This company also has substantial intangibles. Claim of deduction under section 10A - TPO completed the TP proceedings treating the assessee under the ITES segment. The Assessing Officer himself has assessed the assessee under the ITES segment and when it came to the claim of deduction under section 10A of the Act the Assessing Officer says that the assessee is merely running a call centre. In Notification No. SO 890E dated 26.09.2000, it has been mentioned that ITES include call centres and, therefore, we do not find any reason why the assessee was denied deduction under section 10A of the Act by the Assessing Officer. However the ld CIT(A) has rightly considered the facts of the case in true perspective and allowed the claim and, therefore, we do not any reason to interfere with the findings of the ld. CIT(A). This ground is accordingly dismissed. Deduction of cess on the ground that the same is not covered under section 40(a)(ii) - HELD THAT:- As relying on SESA GOA LIMITED [2020 (3) TMI 347 - BOMBAY HIGH COURT] we direct for allowing deduction for cess. Accordingly, additional ground is allowed.
|