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TMI Blog2018 (7) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case are that the assessee company, engaged in the business of providing software development and IT enabled services, filed its e-return for the A.Y 2010-11 on 07.10.2010 declaring total income of Rs. 1,67,92,830. Since the assessee had entered into international transactions with its AE, the determination of the ALP of the said transaction was referred to the TPO u/s 92CA(3) of the Act. The TPO vide order dated 21.01.2014 proposed an adjustment of Rs. 1,62,05,938. In accordance with the order of the TPO, a draft assessment order was proposed against which the assessee filed its objections before the DRP. The DRP granted partial relief to the assessee and against the relief granted by the DRP, the Revenue is in appeal before us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er as well as total turnover though such an adjustment to the total turnover is not contemplated in the provisions laid down under section 10 A of the Income Tax Act, 1961. 7. Any other ground that may be urged at the time of hearing the appeal". 3. Grounds 1 & 7 are general in nature and need no adjudication. 4. As regards Grounds 2 and 3 are concerned, it is the case of the Revenue that the DRP should not have rejected M/s. Infosys BPO, M/s. TCS-E-Serve Ltd as comparable companies on the ground of exceptionally large scale of operation and should not have rejected M/s. e-Clerx Services Ltd, by regarding it as KPO. 5. The learned DR supported the orders of the AO and the TPO, while the learned Counsel for the assessee supported the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ). We find that the DRP has followed various decisions of the ITAT to hold these companies to be uncomparable to the assessee company. Since the CIT (A) has followed the precedents on the issue and the learned DR has not been able to point out any decision to the contrary, we do not see any reason to interfere with the directions of the DRP. Accordingly grounds 2 & 3 are rejected. 7. As far as Grounds 4 to 6 are concerned, we find that these grounds are now covered in favour of the assessee by the decision of the Hon'ble Supreme Court in the case of CIT vs. HCL Technologies Ltd in CIVIL APPEAL NO. 8535 and others of 2013, dated 24th April, 2018 wherein it was has held that while computing the deduction u/s 10A of the Act, if any expend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 10A of the Act. 5. Without prejudice to above, even assuming but not admitting that the above telecommunication expenses incurred in foreign currency are to be reduced from Export Turnover and Total Turnover, the Ld. AO erred in considering a higher amount for the telecommunication expenses as Rs. 39,03,927 whereas the expenses pertaining to the telecommunication expenses were Rs. 21,68,353". 10. As regards the ground No.1, the assessee is aggrieved because the AO has not given the benefit of the proviso to sub6 7 section (2) of section 92C of the Act. we find that the AO is bound to give the benefit of variation (+_)5% margin under the proviso to sub-section (2) of section 92C of the Act and if the assessee's margin is within (+ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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