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2015 (12) TMI 1824 - ITAT BANGALORETP Adjustment - comparable selection - admission of additional grounds - HELD THAT:- By virtue of Special Bench decision in the case of M/s Quark Systems Pvt. Ltd [2009 (10) TMI 591 - ITAT, CHANDIGARH] , assessee can raise additional grounds seeking exclusion of comparables selected by it or not objected by it before the lower authorities. However, the Hon’ble Punjab & Haryana High Court [2011 (5) TMI 508 - PUNJAB AND HARYANA HIGH COURT] had upheld the Special Bench decision in the case of M/s Quark Systems Pvt. Ltd. ( Supra) specifically noting that the Special Bench had remitted the issue of comparability of such companies to the AO/TPO for verification afresh. Hence, we are admitting the additional grounds. Hence the additional grounds are set aside to the file of the Assessing Officer. Comparables selecton - Companies functionally dissimilar with that of assessee as engaged in providing software design, development and maintenance services and marketing support services to its associated enterprises (AEs) as a captive service provider need to be deselected from final list. Companies having turnover exceeding ₹ 200 crores is to be excluded from the final list of comparables selected by the TPO in the light of decision of the coordinate Bench of this Tribunal in the case of Cypress Semiconductor India P. Ltd [2015 (4) TMI 373 - ITAT BANGALORE] Companies with related party transactions exceeding 15% be excluded from the list of comparables chosen by the TPO. Inclusion of reimbursement of expenses in the operating cost as well as operating revenue of the assessee company - HELD THAT:- We find that the assessee company has received reimbursement of these expenses as cost from its AE and consequently the amount received/receivable is deemed to be at arm’s length price. Hence this ground of appeal is allowed. Working capital adjustment - HELD THAT:- Advances received from AEs should be considered as a part of trade payables in the computation of working capital adjustment. Hence, the TPO/AO is directed to consider advances from ARM Ltd. UK and ARM Inc., USA in the computation of working capital adjustment and rework the same. This ground is allowed for statistical purposes. Recomputation of deduction u/s. 10A - HELD THAT:- Whatever is excluded from the export turnover, has also to be excluded from the total turnover. Accordingly, we direct the AO to recompute the deduction u/s. 10A in respect of travel expenses and telecommunication charges by reducing the same from total turnover also. See TATA ELXSI LTD. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] Non-grant of refund and corresponding interest u/s. 234D - assessee submitted that according to the AO, refund of ₹ 7,04,700 has been issued to the assessee, but the assessee has not received the refund. Consequently, the AO has erred in charged u/s. 234D of the Act of ₹ 81,041 on the said refund of ₹ 7,04,700 - HELD THAT:- We set aside this issue to the file of Assessing Officer to verify the claim of assessee and decide the issue afresh.
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