TMI Blog2013 (1) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... s.2 to 4 relate to the question of adjustment of internet expenses of ` 26,99,033/- in the export vis- -vis total turnover of the assessee. The Assessing Officer has excluded the said amount from the export turnover. No exclusion was made from the total turnover. 3. In view of the judgment of the Hon ble Karnataka High Court rendered in the case of CIT vs. Tata Elxsi Ltd. Ors., 204 Taxman 321, the adjustment made in the export turnover of the assessee has to be made also in the total turnover of the assessee. This is because the components of export turnover in the numerator and the denominator cannot be different. Therefore, we direct the Assessing Officer to exclude equal amount from the total turnover as well. This issue is accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion or by transfer of plant and machinery previously used. The Tribunal held that there is no case of establishing a new business by transfer of plant and machinery used previously for any purpose. In view of the above decision of the Tribunal rendered for the assessment year 2002-03 in assessee s own case, we hold that the assessee is entitled for the deduction available under section 10A of the Act. The assessing authority is therefore directed to grant the benefit of deduction to the assessee available under section 10A of the Act. This issue is decided in favour of the assessee. 5. The next issue raised by the assessee is that the Assessing Officer has erred in holding that brought forward losses should be set off before allowing th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the submissions of the assessee that the prices charged by the assessee to its Associated Enterprise (AE) were at arm s length, keeping in view the fact that PLI of comparables was 2.53% as against 3.33% of the assessee. The assessee argues that the Assessing Officer has erred in using as comparables, companies with huge turnover than the assessee, where the assessee is a very small player in the industry. It is also the case of the assessee that the Assessing Officer has used comparables which are not in the same line of business carried on by the assessee. The assessee further contended that the Assessing Officer has further erred in not factoring in the higher incidence of cost overruns, higher bench costs and substantial research and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompared only with software development companies. When a general comparison is made, huge expenditure incurred on research and development should be considered. It is also to be seen that the business model of the assessee was based more on turnkey projects, in which case cost overruns would have to be borne by the assessee- company. In the facts and circumstances of the case, we are not in a position to accept the PLI at 25.44% determined by the TPO on the ratio of operating profit to operating cost. This is against the PLI returned by the assessee-company at 3.5%. Therefore, we do not approve the upward adjustment of ` 4,33,80,146/- made by the Assessing Officer to its full extent. On same set of facts, the issue of ALP determination was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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