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2017 (2) TMI 1455 - AT - Income TaxTP Adjustment - adjustment to the transfer price of the Appellant in respect of its IT enabled support services in the nature of back office and customer support services - rejection of comparability analysis of the Appellant in the TP documentation and accepting the comparability analysis performed by the learned TPO in the TP Order - Disregarding application of multiple year/prior year data - HELD THAT:- Order on TP issue is very cryptic and not a speaking and reasoned order. Therefore, We feel it proper to restore the matter regarding TP issue to his file for a fresh decision. We order accordingly. The TP issue is restored back to his file with a direction that he should pass a speaking and reasoned order after affording adequate opportunity of being heard to both sides. Interest income earned from debts - CIT(A) not considering the income from services in the nature of interest on the delayed payments made by associated enterprises for the provision of IT enabled services as an operating income and hence erred in computing the effective mark-up on total, cost earned by the Appellant - HELD THAT:- Delhi Bench rendered in the case of EFunds International (P.)Ltd. v. Dy. CIT [2008 (4) TMI 354 - ITAT DELHI-F] wherein it was held by the Tribunal that the assessee was not eligible to claim deduction u/s 10A of the IT Act, 1961 on the interest income earned by the assessee from the housing loans advanced to its employees because it did not form part of the business of the assessee. CIT(A) as noted by him in his order, we find no infirmity in the order of the ld. CIT(A) on this issue and since the working capital adjustment has already been allowed by the TPO, we are of the considered opinion that non interference is called for in the order of the ld. CIT(A) on this issue. Accordingly, ground no.5 of the assessee is rejected. Working capital adjustment - HELD THAT:- Working of risk adjustment claimed by the assessee is not available in the TP study and is not made available before the TPO or before the ld. CIT(A) or before us. This is also true that apart from various risk faced by uncontrollable comparables, the assessee providing services to AE is also having risk of single customer and, therefore, in the absence of any scientific working in respect of the claim for risk adjustment, the same cannot be considered and allowed and therefore, we are of the considered opinion that the ld. CIT(A) was not justified in holding that the assessee is entitled to risk adjustment as per prevailing- norms which shall be worked out by the TPO and granted to the assessee. If such adjustment was possible to be worked out in the facts of the present case, the ld CIT(A) should have worked out himself instead of asking the TPO to work it out. Such working is not made available before us also by the ld. AR of the assessee and therefore, we reverse the order of the ld. CIT(A) on. this issue and restore the order of the AO. Accordingly, ground no.2 of the revenue is allowed. Deduction u/s 10A - computation of deduction - HELD THAT:- This issue is fully covered in favour of the assessee by the judgment of the Hon'ble Karnataka High Court rendered in the case of CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT] wherein it was held that Total Turnover is sum total of Export Turnover and Domestic Turnover and therefore, if an amount is reduced from export turnover then total turnover also goes down by the same amount automatically. - Decided against revenue
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