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2018 (2) TMI 1084 - AT - Income TaxTPA - ALP determination - comparable selection criteria - Held that:- Assessee is into “IT Enabled Services” and “IT Software Development” thus companies functionally dissimlar with that of assessee need to be deselected from final list. Treating foreign exchange gain/loss as non-operating items in both the segments i.e. ITES services and Software Development services while determining the arm’s length price of the international transactions - Held that:- Foreign exchange gain/loss cannot be treated as non-operating items while calculating the margin of the taxpayer as well as comparables. So, we direct to treat the foreign exchange gain/loss as non-operating margin as non-operating items while benchmarking the international transactions. Decided in favour of Assessee. Adjustment on account of working capital differences between the taxpayer vis-ŕvis comparable companies - Held that:- We are of the considered view that the taxpayer is entitled for working capital adjustment to be on the same page with the comparables. So, the taxpayer is entitled for working capital adjustment, the quantum of which is to be checked by the ld. TPO who has to proceed on the lines of the decision rendered by the coordinate Bench of the Tribunal in taxpayer’s own case for AY 2008-09 Deduction u/s 10A of the Act being the interest on FDR and misc. income - Held that:- Following the findings returned by the coordinate Bench of the Tribunal in taxpayer’s own case for AY 2010-11 based on the decision of Hon’ble High Court in Riviera Home Furnishing (2015 (11) TMI 1139 - DELHI HIGH COURT), we are of the considered view that the taxpayer is entitled for deduction u/s 10A on the interest earned on fixed deposit receipts. Pay recoveries from the employees eligible for sec 10A deduction - Held that:- Similar view as to allowing the deduction u/s 10A of the Act on excess provision returned back has been expressed by the coordinate Bench of the Tribunal in Birlasoft (India) Ltd. vs. DCIT [2011 (1) TMI 406 - ITAT, DELHI ]. Following the decision rendered by the coordinate Bench of the Tribunal, we are of the considered view that notice pay recoveries from the employees is also part of the business profit of the taxpayer on which the taxpayer is also eligible for deduction u/s 10A. Set off of Minimum Alternate Tax (MAT) credit brought forward during the year under assessment u/s 115JAA - Held that:- When it is not in dispute that the taxpayer has claimed the credit being brought forward figure, the taxpayer is entitled for set off of MAT credit of the same. So, the AO is directed to proceed accordingly after due verification.
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