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2020 (6) TMI 699 - AT - Income TaxDetermination of ALP in respect of international transaction of rendering SWD services - Selection of comparable - HELD THAT:- Assessee provides support services to its group entities. The services provided by the Assessee are Call Centre, Shared services and Offshore development Centre (testing and support) thus companies functionally dissimilar with that of assessee need to deselected from final list. Non-grant of deduction under section 10A on the income determined as per Mutual Agreement between Competent Authorities of India and USA - HELD THAT:- In the present case the conditions under which the dispute was resolved under MAP, was that the Assessee had to increase its taxable income and the sum agreed was to be subsequently invoiced and realized and thereby there was inflow of foreign exchange in India. Such features do not exist when the adjustment to ALP is suggested by a TPO which is subsequently incorporated in an order of assessment by the AO. Pune Bench of the ITAT had an occasion to deal with an identical question in the context of determination of ALP under the Advance Pricing Arrangement [APA] in the case of Dar Al Handasah Consultants (Shair & Partners) India Private Limited [2019 (12) TMI 153 - ITAT PUNE] and took the view that deduction u/s. 10A of the Act on additional income offered as per APA would be eligible to claim deduction u/s. 10AA. The proviso to section 92CA(4) of the Act will apply only to adjustment to transfer pricing made by the AO which is enumerated in Sl.No.(ii) above and not to any other modes of determination of ALP. The decision of the Pune Bench of ITAT in the case of Dar Al Handasah Consultants (Shair & Partners) India Private Limited (supra) will be clearly applicable to the facts of the present case. Whether non-receipt of foreign exchange within the period required u/s. 10A of the Act would be a bar to allow the deduction in AY 2007-08? - As already observed that similar to provisions of section 92CC of the Act, the provisions of the DTAA r.w.s. 90(2) of the Act provide to the contrary in matters where issues are settled under the MAP. Following the decision of the Tribunal referred to above, we hold that the assessee should be allowed the benefit of deduction u/s. 10A of the Act in respect of the amount settled under the MAP for the AY 2007-08. Accordingly, the relevant grounds of appeal are allowed.
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