2023 (5) TMI 701 - AT - Income Tax

TP Adjustment - Comparables selection - TPO has rejected the R Systems International Limited from the list of comparables on the basis that it has a different year end as compared to assessee - HELD THAT:- We notice that the coordinate bench in assessee’s own case AY 2010-11 [2022 (8) TMI 1379 - ITAT MUMBAI]. Tribunal recorded that inasmuch as this company has not been rejected on the ground of functionality, if the quarterly results are available in the public domain wherein the figures for the relevant quarter are also available, there cannot be any difficulty to work out the proportionate margin. While placing reliance on the decision of this Tribunal in the case of Cadence Design Systems India Ltd., the Tribunal directed the TPO to consider the quarterly results and work out the proportionate margin results.

As gone through the order and also the facts involved in this matter. The rejection of this comparable is not on the ground of functional dissimilarity, but only because of a different accounting period. Facts being similar, we are of the considered opinion that it is a fit case to direct the ld. AO to consider the quarterly results and work out the proportionate profit margin for this purpose, we remand the matter to the file of the TPO/AO for compliance of our direction.

Thus as the issue is covered by the above decision of the coordinate bench in assessee’s own case we remit the issue back to the TPO with a direction to consider the quarterly results and work out the proportionate profit margin of the comparable after giving a reasonable opportunity of being heard to the assessee.

Denial of deduction u/s.10AA for interest income - HELD THAT:- In assessee’s case, we notice that the assessee has placed the surplus funds in FDs and has earned interest from the same. The facts of assessee’s case being identical to the case of Hewlett Packard Global Soft Ltd [2017 (11) TMI 205 - KARNATAKA HIGH COURT] respectfully following the above we hold that the interest income earned by the assessee is eligible for deduction under section 10AA. Accordingly, we delete the disallowance made by the Assessing Officer in this regard.