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2021 (2) TMI 671 - AT - Income TaxTP Adjustment - comparable selection - upper turnover filter - HELD THAT:- companies having turnover of more than ₹ 200 crores could not be taken as comparable companies for an assessee having turnover of less than ₹ 200 crores. Tata Elxsi, Sasken Communication, Mindtree Ltd, Larson&Tubro Infotech, Infosys Technologies Ltd and Zylog Systems Ltd.excluded accordingly. Assessee provided software research and development services and call centre services thus companies functionally dissimilar with that of assessee need to be deselected. Bodhtree Consulting Ltd. excluded accordingly. Disallowance being research and development expenses u/s 37- said expenses confer an enduring benefit and is not revenue in nature - HELD THAT:- As decided in own case [2013 (1) TMI 672 - ITAT BANGALORE]The submissions made before us that the above expenses were incurred for website development is contrary to the stand of the Assessee before DRP/AO that these expenses were for exploring the possibility of domestic market through pilot projects. Unless the nature of the expenses is examined it is not possible to decide as to whether the same were revenue in nature and that it relates to existing business of an Assessee. The alternative contention of the Assessee that the claim should be examined u/s.35 of the Act also cannot be decided unless the correct description of the expense is considered. We therefore set aside the order of the AO on this issue and remand the issue for consideration afresh by the AO after affording opportunity of being heard to the Assessee.
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