TMI Blog2018 (9) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... e does not satisfy the filter adopted by the TPO himself, in the interest of justice and equity, we are of the view that the matter is to be re-examined by the TPO. The assessee shall raise all the contentions before the TPO and shall place necessary evidence to prove its case that Informed Tech India Ltd. should not be adopted as a comparable company. Hence Ground No. 7.1 of the assessee is allowed for statistical purposes. Deduction u/s 10B - Held that:- If section 10B is denied for the reason that units are not having necessary approval from the appropriate authority, the authorities are duty bound to consider the alternative claim of deduction u/s 10A of the I.T.Act and grant the same, if the conditions are satisfied as prescribed u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chandra Poojari, AM And Shri George George K, JM For The Revenue : Sri.Santham Bose For The Assessee : Sri.Raghunathan S, Advocate ORDER Per George George K, JM These cross appeals are directed against the final assessment order dated 29.12.2014 passed u/s. 143(3) r.w.s. 144C of the I.T. Act. The relevant assessment year is 2010- 2011. The assessee has also filed Stay Application seeking stay of outstanding tax arrears. 2. The Department has filed a letter seeking to withdraw the appeal filed by them. The learned AR representing the assessee did not have any objection. Hence the department s appeal (ITA No. 144/Coch/2015) is dismissed as withdrawn. 3. In assessee s appeal, 15 grounds and various subgr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e more than 70% of the total revenue for selecting a company as comparable. According to the assessee the revenue generated by Informed Tech India Ltd. from IT related services is only 50% of its total revenue and therefore, fails the TPO s filter adopted for selection of comparables. 4.2 The Ld. DR present relied on the orders of the TPO and the DRP. 4.3 We have heard the rival submissions and perused the material on record. The assessee-company in its Transfer Pricing study had selected three companies as comparable. The TPO rejected the comparable selected by the assessee in its TP study. The TPO adopted fresh analysis and arrived at six companies wherein operating profit to operating cost was arrived at 25.78%. One of the six comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elf, in the interest of justice and equity, we are of the view that the matter is to be re-examined by the TPO. The assessee shall raise all the contentions before the TPO and shall place necessary evidence to prove its case that Informed Tech India Ltd. should not be adopted as a comparable company. Hence Ground No. 7.1 of the assessee is allowed for statistical purposes. Ground No.14 (Corporate Tax) 5. The assessee-company had claimed deduction u/s 10B of the I.T.Act, an amount of ₹ 1,53,15,376. The Assessing Officer denied deduction u/s 10B of the I.T.Act by placing reliance on the judgment of the Hon ble Delhi High Court in the case of CIT v. Regency Creations Ltd. [27 Taxmann.com 32]. According to the A.O., the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uncements, it was held that section 10A of the I.T.Act is para material with section 10B of the I.T.Act. (i) M/s.US Technology International Pvt. Ltd. (ITA No.133/C/2016) (ii) M/s.QBurst Technologies P Ltd. (ITA Nos.172 173/Coch/2015) (iii) Cronos Consulting India (P) Ltd. (ITA No.105/Coch/2014) (iv) Device Driven (India) [TS-613-ITAT-2013 (Coch)] (v) Fast Booking (I) Private Limited (Delhi High Court) [TS-516-HC-2015 (Del.) (vi) J.C.Infosoft Technologies (ITA No.1135/Del/2011) (vii) Valiant Communications Ltd. (ITA 438-441/2012) (Delhi HC). 5.2 In the above mentioned cases it was held that if section 10B is denied for the reason that units are not having necessary approval from the appropriate authority, the autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Apex Court National Thermal Power Co. Ltd. , we admit the additional ground and proceed to adjudicate the same on merits. 6.1 The Transfer Pricing Officer in its order dated 23.01.2014 had excluded the foreign exchange gains while arriving at the Profit Level Indicator (PLI). Before the DRP, the assessee had taken the ground that foreign exchange gains is part of the operating profit margin of the assessee. Further, the assessee in the additional ground before the DRP, had also raised a contention that premium on forward exchange contract is also to be considered as part of the operating margin of the assessee to arrive at the PLI. The DRP directed the TPO to include the foreign exchange gains while arriving at the assessee s PLI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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