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2016 (6) TMI 91 - ITAT BANGALOREComputation of deduction u/s.10A - deduction of travelling expenses in foreign currency and certain other expenses - Held that:- In view of Explanation 2(iv) to Section 10A of the Act, which defines 'export turnover', we are unable to accede to the contention of the Ld. AR that travelling expenditure had to be included in the export turnover for computation of deduction u/s.10A of the Act. However in so far as the claim that amounts which were excluded from export turnover has to be deducted from total turnover as well, we are inclined to agree in view of the law laid down in the case of Tata Elxsi Ltd (2011 (8) TMI 782 - KARNATAKA HIGH COURT ). Accordingly, we direct that such amounts which were excluded from export turnover be excluded from total turnover also while computing the deduction allowable u/s.10A - Decided partly in favour of assessee Adjustment of loss incurred in non-STP units with the profits earned in the STP units before granting deduction u/s.10A of the Act - Held that:- Hon'ble jurisdictional High Court in the case of Yokogawa India Ltd (2011 (8) TMI 845 - Karnataka High Court ) had held that profits eligible for relief u/s.10A of the Act was to be excluded from the total income before giving effect to set off mandated u/s.70 of the Act. . Accordingly, we hold that the claim of deduction u/s.10A of the Act has to be calculated without setting off the loss incurred by the assessee in its non- STP units - Decided in favour of assessee Transfer pricing adjustment - selection of comparable - Held that:- Assessee has to succeed in its pleading for exclusion of the following companies :- Avani cincom Technologies Ltd,Bodhtree Consulting Ltd,Celestial Biolabs,E-Zest Solutions Ltd,Infosys, Kals Information Systems Ltd (seg),Persistent Systems Ltd,Quintegra Solution Ltd,Tata Elxsi (seg),Thirdware Solution Ltd,Wipro Ltd (seg) and Lucid Software Ltd.6. We also find that the above mentioned companies were considered by the Tribunal in assessee's own case for A. Y. 2006-07 were directed for exclusion, due to functional incompatibility. Accordingly we direct exclusion of the above companies from the list of comparables. TPO is directed to rework the PLI of the comparables after excluding the above companies and considering the working capital adjustment and proceed in accordance with law
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