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2022 (12) TMI 995 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- Companies functionally dissimilar with that of assessee need to be deselected from final list of comparables. Working capital adjustment - HELD THAT:- We Direct the Ld.TPO to delete the (-)ve Working Capital Adjustment computed under the software development segment. Working Capital Adjustment computed under ITES segment, we direct the Ld.TPO to compute the working capital on actuals. Assessee is directed to provide all necessary details for both the segments in order to compute the Working Capital Adjustment on actuals by the Ld.TPO. Recomputation of deduction u/s. 10AA reducing telecommunication expenses from the export turnover - HELD THAT:- Both sides submitted that this issue is no longer resintegra in lieu of the decision of Hon’ble Supreme Court in case of HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT] Accordingly, we direct the Ld.AO / TPO to compute the deduction u/s. 10AA of the Act in accordance with the principles laid down by Hon’ble Supreme Court in case of HCL Technologies Ltd.(supra). Disallowance of software expenses u/s. 40(a)(i) - HELD THAT:- AO disallowed the expenses by relying in case of Samsung Electronics Co. Ltd [2011 (10) TMI 195 - KARNATAKA HIGH COURT] The Ld.AR submitted that this decision has been reversed by Hon’ble Supreme Court in case of Engineering Analysis Centre of Excellence Pvt. Ltd [2021 (3) TMI 138 - SUPREME COURT] we direct the Ld.AO/TPO to verify the invoices raised against which the payments were made by assessee in the light of principles laid down by Hon’ble Supreme Court in the above referred case. The Ld.AO is directed to consider the claim in accordance with law by granting appropriate. Belated remittance of PF/ESI - HELD THAT:- As addition deleted by the Ld.CIT(A) by following the decision in case of CIT vs. Sabari Enterprises [2007 (7) TMI 169 - KARNATAKA HIGH COURT] and in the case of Spectrum Consultants India (P.) Ltd. [2013 (7) TMI 414 - KARNATAKA HIGH COURT] Subsequently, we note that in case of ESSAE TERAOKA PVT. LTD. [2014 (3) TMI 386 - KARNATAKA HIGH COURT] is followed same decision and deleted the disallowance made.
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