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2015 (3) TMI 151 - AT - Income TaxDeduction u/s.10B denied - the approval granted by the Software Technology Park of India (STPI) to the Bopodi unit of the Appellant is not ratified by the Board of Approval constituted u/s.14 of the Industrial Development Regulation Act - alternate claim of deduction u/s.10A rejected on the ground that the assessee has not claimed the deduction u/s.10A, through filing of return of income and has not furnished the prescribed report of the auditor at the time of filing of the return of income - Held that:- Since in the instant case although the assessee has not claimed the deduction u/s.10A of the Act in the return filed u/s.139(1), however, the assessee has claimed such an alternate deduction before the AO during the assessment proceedings itself by filing the requisite report of the accountant along with Form No.56G. Therefore, if the assessee is not eligible for deduction u/s.10B of the Act but eligible u/s.10A of the Act, we find no reason as to why such benefit should be denied to the assessee. After all these are incentive provisions and are to be liberally construed. If the assesses otherwise fulfils all the legal requirements for claiming the deduction u/s.10A of the Act but inadvertently claimed the same u/s.10B of the Act which was granted to it in the past, we find no reason as to why the alternate claim of the assessee should not be accepted.However, since the lower authorities have not thoroughly examined the allowability of deduction u/s.10A of the Act and merely rejected the claim on the ground that the same was not claimed in the original return filed, therefore, we in the interest of justice deem it proper to restore the issue to the file of the AO with a direction to give an opportunity to the assessee to substantiate its eligibility for deduction u/s.10A of the I.T. Act. We hold and direct accordingly. Since we are restoring the issue to the file of the AO for deciding the alternate claim of the assessee for deduction/s.10A, therefore, we refrain ourselves from adjudicating the allowability of deduction u/s.10B of the I.T. Act. - Decided in favour of assessee for statistical purposes. Transfer pricing adjustment - selection of comparable - CIT(A) directing AO to exclude KALS Information Systems Pvt. Ltd. from the list of comparable companies - Held that:- Since the Ld.CIT(A) following the decision of the Pune Bench of the Tribunal in the case of Bindview India Pvt. Ltd.[2013 (6) TMI 113 - ITAT PUNE] has rejected Kals information System Ltd. holding the same to be functionally different, therefore, in absence of any contrary material brought to our notice, we find no infirmity in the order of the CIT(A). Accordingly, the same is upheld and the grounds raised by the Revenue are accordingly dismissed. - Decided in favour of assessee. Incorrect calculation of OP/TC by treating foreign gain/loss as operating in nature - Held that:- Delhi Bench of the Tribunal in the case of Westfalia Separtator India Pvt. Ltd., (2015 (3) TMI 140 - ITAT DELHI) following various decisions has held that foreign exchange loss/gain is a part of the operating revenue/cost. Thus we set aside the order of the CIT(A) on this issue and direct the Assessing Officer to consider foreign exchange fluctuation gain as part of the operating income of the assessee - Decided in favour of assessee. Unjust rejection of TP study filter - introduction of additional filters for selecting final set of comparables - Held that:- Merit in the argument of assessee that TPO has applied the filter of 75% export turnover without demonstrating the same on the basis of any study/analysis which resulted in inadequate number of companies for comparability. In our opinion, if sufficient number of 100% uncontrolled comparables are not found, then comparables having similar transactions should be considered. In our opinion when sufficient comparables are not available then the threshold should be relaxed and only gradually to the extent that sufficient comparables are found the limit should be relaxed. Since the threshold filter of 75% adopted by the Assessing Officer and upheld by the CIT(A) in our opinion is on the higher side, therefore, considering the totality of the facts of the case, we hold that under the facts and circumstances of the case, the export filter should be relaxed to 50% from 75%. - Decided partly in favour of assessee. Selection of certain new comparables and rejection of the comparables selected by the assessee in the TP study report - inclusion of Thirdware solutions Ltd. and exclusion of Vama Industries Ltd. as a comparable - Held that:- As relying on Maersk Global Centres (India) (P.) Ltd. Versus ACIT [2014 (3) TMI 891 - ITAT MUMBAI] and other decisions also Thirdware Solutions Ltd. has been rejected as a comparable on the ground that it is functionally dissimilar. We therefore find force in the submission of the Ld. Counsel for the assessee that Thirdware Solutions Ltd. should not be included as a comparable.So far as exclusion of Vama Industries Ltd., as find merit in the submission of the Ld. Counsel for the assessee that when segmental data is available and the export turnover of the software development services is 69% of the total turnover of the software division, therefore, the same should not have been rejected. We therefore direct the Assessing Officer to consider the same as a comparable. - Decided in favour of assessee. Non granting of opportunity of verification - Held that:- No infirmity in order of Ld.CIT(A) on this issue. Admittedly, during TP assessment proceedings, the assessee was given show cause notice. The matter was thoroughly discussed with the authorised representative. Therefore, it cannot be said that no opportunity was granted to the assessee. Therefore, this ground is dismissed. - Decided against assessee. Rejection of multiple year data - Held that:- Issue stands decided against the assessee by the decision of the Special Bench of the Tribunal in the case of Aztech Software and Technology Services Ltd., Vs. ACIT [2007 (7) TMI 50 - ITAT BANGALORE] - Decided against assessee.
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