TMI Blog2017 (3) TMI 1322X X X X Extracts X X X X X X X X Extracts X X X X ..... over while computing exemption u/s 10A of the Act. In view of the above, we uphold the order of the CIT(A) and dismiss the ground raised by the revenue. TP adjustment - selection of comparable - Held that:- As the revenue is objecting to exclusion of these 8 companies as comparables while the assessee is insisting to inclusion of four companies as comparables, we revert this issue back to the file of the TPO to re-do the issue after considering the submissions of the assessee and the assessee may be given opportunity of being heard in the matter. Accordingly, ground allowed for statistical purposes. - ITA No. 1051/Hyd/2014 - - - Dated:- 24-3-2017 - SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A). 2. Briefly the facts of the case are that the assessee is engaged in the business of providing Software Development Services. It filed its return of income on 31/10/2007 declaring a total income of ₹ 26,06,670/- after claiming deduction u/s 10A of the Income-tax Act, 1961 (in short the Act ). The AO disallowed the claim of deduction u/s 10A and also made an addition u/s 92CA(4) of ₹ 1,68,96,706/-. Accordingly, the total income was assessed at ₹ 2,40,58,169/-. 3. As regards the ground No.1 relates to the disallowance of deduction u/s 10A of ₹ 45,54,792/-, the AO held that the undertaking for which the assessee had claimed deduction was not a new undertaking and had been formed by transferring existin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Plus Jewellery (330 ITR 175) as well as different Benches of Tribunal including ITAT, Chennai Bench (SB) in the case of ITO vs. Sak Soft (313 ITR (AT) 853) have held that communication charges attributable directly to the export of article or thing outside India has to be excluded both from export turnover as well as total turnover while computing exemption u/s 10A of the Act. In view of the above, we uphold the order of the CIT(A) and dismiss the ground raised by the revenue. 6. As regards ground Nos. 2 to 4 with regard to TP adjustment and selection of comparables, the TPO accepted two of the comparables, viz. Mindtree Consulting Ltd. and SIT Technologies Exports Ltd. adopted by the TP documentation of the assessee, though he took in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 36.63% 9. Gate Global Solutions Ltd. 7.49% 10. Infosys Technologies Ltd. 40.30% 11. Ishir Infotech Ltd. 30.12% 12. KALS Information Systems Ltd. (Seg.) 30.55% 13. LGS Global Ltd. 15.75% 14. Lucid Software Ltd. 19.37% 15. Mediasoft Solutions Ltd. 3.66% 16. Megasoft Solutions Ltd. 60.23% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar to that of the assessee in the present case, the decision of the ITAT on the selection of comparables is applicable for the present appeal. The ITAT in its decision rejected each of the 24 companies selected by the TPO as comparables. The decision of the ITAT in this case was also followed in the other three decisions cited by the assessee. Respectfully following the decisions of the ITAT, the CIT(A) set aside the selection of the additional 24 companies by the TPO as comparables and directed the Assessing Officer to adopt the two companies, Mindtree Consulting Ltd and S.I.P. Technologies Exports Ltd. as the comparables for the purpose of the TP analysis. 8. Aggrieved with the above order, the Revenue is in appeal before us. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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