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2021 (8) TMI 1349 - AT - Income TaxTP adjustment - comparable selection in the ITeS segment - HELD THAT:- As far as exclusion of Infosys Ltd., is concerned, the decision of the ITAT Hyderabad Bench [2018 (6) TMI 505 - ITAT HYDERABAD] cited by the learned Counsel for assessee supports the pela for exclusion. Hence, we direct exclusion of Infosys Ltd., as a comparable company. As far as exclusion of Cross Domain Solutions Pvt. Ltd., we notice that this company renders diversified Knowledge Process Outsourcing (KPO) providing services in insurance, health care, HR and accounting domains. In the decision cited by the learned DR, the assessee was also in KPO services of providing engineering design services. The assessee in this appeal is a Business Processing Outsourcing Services which are routine in nature and not in the nature of a knowledge process outsourcing. Therefore we prefer to follow the decision cited by the assessee and direct exclusion of Cross Domain Solutions Pvt. Ltd. Non-grant of working capital adjustment while arriving at the average arithmetic profit margin of comparable companies - In the case of the Assessee in this appeal, neither the TPO nor the DRP have gone into the quantum of adjustment that is to be given towards working of working capital adjustment, we are of the view that it would be just and appropriate to remand the issue of granting of working capital adjustment to the TPO/AO for fresh consideration in accordance with law after due opportunity of being afforded to the Assessee. We hold and direct accordingly. Claim towards payment of leave encashment - HELD THAT:- In the light of the decision of the Hon’ble Supreme Court in the case of Exide Industries [2020 (4) TMI 792 - SUPREME COURT] the assessee will not be entitled to claim deduction on leave encashment on the basis of the provision. Taking into consideration the circumstances under which the assessee did not claim a sum being leave encashment actually being paid during the previous year relevant to Assessment Year 2014-15 we are of the view that the assessee should be allowed leave encashment actually paid as per provisions of section 43B(f) of the Act. We remit the issue to the AO to verify the claim of the assessee and allow deduction to the assessee as per law after affording assessee opportunity of being heard. Deduction in respect of Education Cess and Secondary and High Education Cess on Income Tax - HELD THAT:- We have considered the submissions and we find that in the case of Sesagoa Ltd. [2020 (3) TMI 347 - BOMBAY HIGH COURT] held the expression 'cess' used in section 40(a)(ii) of the Act ought not to be read or included in expression 'any rate or tax levied' as appearing in section 40(a)(ii) and consequently, 'cess' whenever paid in relation to business, is allowable as deductible expenditure. Following the aforesaid decision, we uphold the claim of the assessee for deduction of the aforesaid sum.
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