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2020 (12) TMI 213 - AT - Income TaxTP Adjustment - application of "on-site revenue filter" and selectively rejecting certain comparables - HELD THAT:- Assessee engaged in the development of VLSI, software, embedded software and hardware design solutions to support broadband wireless access. We agree with contention raised by Ld. CIT. DR that a filter cannot be applied once TP analysis has been concluded by Ld. TPO However, on perusal of observations recorded by DRP, Acropetal Technologies Ltd., L&T Infotech Ltd., was primarily excluded on basis of functional dissimilarities and that segmental information not being available Acropetal Technologies has been held to be into products and that L&T Infotech Ltd. has observed that RPT is at 18.66% which is beyond the marginal limit of 15% for year under consideration, by this Tribunal, in case of Electronics for Imaging India Pvt. Ltd. [2017 (7) TMI 1335 - ITAT BANGALORE]. We therefore do not find any infirmity in the view taken by DRP as these comparables are even otherwise functionally not similar with assessee - we direct exclusion of Acropetal Technologies and L&T Infotech Ltd. Excluding M/s. E-Infochips, by DRP on the ground that it fails service income filter - This Tribunal consistently in various decisions for A.Y.: 2011-12 held that, this company does not satisfy service income filter being 75%. We therefore, do not see any reason to set aside this company to Ld. TPO. Therefore, respectfully following view taken by coordinate bench of this Tribunal in DCIT vs. M/s. CGI Information Systems and Management Consultations Pvt. Ltd. [2018 (4) TMI 567 - ITAT BANGALORE] we direct Ld. TPO to exclude this company. ICRA Techno Analytics Ltd., E-Zhest Solutions Ltd., M/s. Infosys Technologies Ltd. and M/s. Tata Elxsi Ltd., have been consistently excluded by this Tribunal in case of a captive service provider like assessee. Further Ld. CIT DR could not establish anything contrary to observations of this Tribunal reproduced hereinabove. Deduction u/s 10A - excluding communication expenses for computing total turnover and export turnover and excluding loss earned from non-eligible unit for purposes of 10 A deduction - HELD THAT:- DRP by following decision in the case of CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] held that, if any expenditure is excluded from export turnover, then the same needs to be excluded from total turnover as well, accordingly, directing Ld. AO to exclude expenses deducted from export turnover from total turnover for computing deduction u/s. 10A of the Income-tax Act, 1961. Further in respect of exclusion of loss earned from non-eligible unit for computing profits of eligible unit under section 10 A, DRP relied on decision of Hon'ble Karnataka High Court in case of and CIT v. Yokogava India Ltd. [2011 (8) TMI 845 - KARNATAKA HIGH COURT] - No infirmity in the view taken by DRP - Grounds raised by revenue stands dismissed.
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