TMI Blog2015 (8) TMI 1293X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the order of the Commissioner of Income Tax (Appeals)-IV, Bangalore dt.20.10.2014 for Assessment Year is 2009-10. 2. The facts of the case, briefly, are as under :- 2.1 The assessee is engaged in the business of development of software and indenting sale of application embedded business and industrial software. The assessee company, formerly known as Phillips Semi-conductors India Pvt. Ltd. was incorporated on 18.7.2006 as a 100% EOU set up under the STPI Scheme; is a private limited company registered in India and is a subsidiary of NXP BV, a Netherlands company. For Asst. Year 2009-10, the assessee filed its return of income on 30.9.2009 declaring income of ₹ 47,88,62,424 under the normal provision of the Act and taxable income of ₹ 16,80,79,423 under MAT provisions. The return was processed under Section 143(1) of the Act and the case was taken up for scrutiny. 2.2 In the period under consideration, the assessee had reported the following international transactions :- Provision of Software Development Services ₹ 258,21,78,120. Provision of Order Gathering Services. ₹ 14,34,45,438 In view of the above international transactions enter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t critical to operational activities of the business conducted by the taxpayer. 5. The CIT (Appeals) has erred in directing the Assessing Officer to allow depreciation @ 60% on net working equipments and active components as against 15% allowed by the Assessing Officer without appreciating the finding recorded by the A.O. There is no definition of computers as per the Income Tax Act and it is not possible to expand the scope of computers even to networking equipments and active components for the purpose of claiming depreciation at a higher rate of 60%. 6. On these and any other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT (Appeals) in so far as it relates to the above grounds may be reversed and that of the Assessing Officer may be restored. 7. The appellant craves leave to add, alter, amend and/or delete any of the grounds mentioned above. 4. The Grounds raised at S.Nos.1, 6 7 are general in nature and not being specifically urged before us, are dismissed as infructuous. 4.1 In the Grounds raised at S.Nos.2 to 4, Revenue contends that the learned CIT(A) erred in holding that foreign exchange loss / gain to be opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es for the purpose of calculating the operating margin of the assessee. We find that this proposition has been upheld by a co-ordinate bench of this Tribunal in the case of Mindteck (India) Ltd. in IT(TP)A No.70/Bang/2014 dt.21.8.2014 wherein at para 11 thereof it has been held as under :- 11. We have considered the rival submissions. It is not disputed by the Revenue that the foreign exchange fluctuation has arisen as a result of the realization of the consideration for rendering software development services. It is therefore incurred in the normal course of business and therefore there is no reason why it should be excluded from determining the operating revenue for the purpose of calculation of operating margin. In our view, the analogy drawn by the DRP regarding exclusion of interest expenses while computing operating margins is not proper. In our view, foreign exchange gain on realization of consideration for rendering software development services should be regarding as part of the operating revenue. Following the decision of the ITAT, Bangalore Bench in the case of SAP Labs (supra), we hold that the operating revenue for the assessee be computed by including the foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;s own case for Assessment Year 2008- 09 in IT(TP)A No.1560/Bang/2012 dt.5.3.2015. The learned Authorised Representative prayed that in view of the above, the ground raised by Revenue be dismissed. 5.3 We have heard both the learned Authorised Representative and the learned Departmental Representative and perused and considered the material on record; including the judicial decision cited. On an appreciation of the material on record, we find that the same issue was before co-ordinate benches of this Tribunal in the assessee's own case for both Assessment Years 2007-08 and 2008-09. In its order in IT(TP)A No.1560/Bang/2012 dt.15.3.2015 for Assessment Year 2008-09, the co-ordinate benche followed the order of the Tribunal for Assessment Year 2007-08 and at paras 5.3.1 5.3.2 thereof the co-ordinate bench has held as under :- 5.3.1 We have heard both the learned Authorised Representative and the learned Departmental Representative and perused and considered the material on record; including the judicial decision cited. On an appreciation of the material on record, we find that the same issue was before a co-ordinate bench of this Tribunal in the assessee's own case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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