TMI Blog2018 (11) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... 8) TMI 782 - KARNATAKA HIGH COURT], it was held that total turnover is sum total of export turnover and domestic turnover and therefore, if an amount is reduced from export turnover then the total turnover also goes down by the same amount automatically. Since the directions of DRP on this issue is in line with this decision of Hon'ble Karnataka High Court, we decline to interfere in the directions of DRP on this issue. This issue is decided against the revenue and these grounds of revenue’s appeal are rejected. - IT(TP)A No. 577/Bang/2016, C.O. No. 49/Bang/2016 - - - Dated:- 12-10-2018 - Shri N.V. Vasudevan, Judicial Member And Shri Arun Kumar Garodia, Accountant Member For the Assessee : Shri S.P. Chidambaram, Advocate For the Revenue : Ms. Neera Malhotra, CIT (DR) ORDER PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER This appeal is filed by therevenue and the CO is filed by the assessee and these are directed against the assessment order passed by the AO on 28.01.2016 for Assessment Year 2011-12 u/s. 143(3) r.w.s. 144C of the IT Act, 1961 as per the directions of DRP. 2. The grounds raised by the revenue in its appeal are as under. i) The direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e High Court in the case of M/s Tata Elxsi Ltd., in 349 ITR 98. x) Whether on the facts and in the circumstances of the case the Dispute Resolution Panel was right in holding that expenses reduced from Export Turnover has to be reduced from Total turnover also, since no provision u/s 10A provides for exclusion of such expenses. xi) For these and other grounds that may be urged at the time of hearing, it is prayed thatthe directions of the Dispute Resolution Panel in so far as it relates to the above grounds maybe reversed. xii) The appellant craves leave to add, alter, amend and /or delete any of the grounds mentioned above. 3. The grounds raised by the assessee in its CO are as under. 1. The Ld. DRP while rejecting Acropetal Technologies Ltd. on onsite filter has grossly erred in not adjudicating on the following grounds: Fails employee cost filter Different business model 2. The Ld. DRP while rejecting E-Infochips on non-availability of segmental details and service income filter has grossly erred in not adjudicating on the following grounds: Functional dissimilarity Engaged in Research Development Diversified ope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Technologies (P.) Ltd. as reported in [2017] 88 taxmann.com 309 (Bangalore Trib.). She filed a copy of this Tribunal order and drawn our attention to paras 4 and 5 of this Tribunal order. 5. In reply it was submitted by ld. AR of assessee that the DRP has applied this filter to all the comparables which were adopted by the TPO and in this regard, he drawn our attention to para 2.7 of the DRP directions and pointed out that as per this para, this filter was applied by DRP to Acropetal Technologies Ltd. He also pointed out that as per para 2.12 of the direction of DRP, this filter was applied in respect of Larsen and Toubro Infotech Limited also in addition to applying this filter for R S Software (India) Ltd. on page no. 21 of the directions of DRP. He also submitted that apart from rejecting some comparables on the basis of onsite revenue filter, these comparables were also rejected for other reasons also and therefore, in the facts of present case, this Tribunal order rendered in the case of ACIT Vs. Broadcom Communication Technologies (P.) Ltd. (supra) is not applicable. 6. Regarding the corporate tax issue raised by the revenue in this appeal, both sides agreed that this i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, it cannot be retained as comparable. The DRP directed the AO to exclude this company from the list of comparables. Before us, as per the revised grounds of appeal filed by the assessee as reproduced above, assessee is objecting to the exclusion of this comparable i.e. M/s. RS Software India Ltd. but there is no objection on this aspect in the grounds raised before us that onsite filter should not be applied. Onsite filter is very relevant and important filter in TP study and therefore, it cannot be said that onsite filter cannot be applied. Hence, we hold that in the facts of the present case, onsite filter has to be applied but since it was applied by the DRP to only one comparable, all the comparables should be examined in the light of this filter and thereafter, the list of comparables should IT(TP)A Nos. 347 501/Bang/2015 be finalized. We want to mention that in respect of those comparables which are passing through this filter i.e. onsite filter, the DRP should examine the applicability of all other relevant filters also and all other objections such as functional similarity / dissimilarity etc. also to decide about inclusion or exclusion of such comparables after p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is this as to whether the total turnover can also be reduced by the amount of expenditure which were incurred in foreign currency and which were reduced by the AO from export turnover. As per the judgement of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Tata Elxsi Ltd.(supra), it was held that total turnover is sum total of export turnover and domestic turnover and therefore, if an amount is reduced from export turnover then the total turnover also goes down by the same amount automatically. Since the directions of DRP on this issue is in line with this decision of Hon'ble Karnataka High Court, we decline to interfere in the directions of DRP on this issue. This issue is decided against the revenue and these grounds of revenue s appeal are rejected. 10. In the result, the revenue s appeal is partly allowed for statistical purposes. 11. Regarding the CO filed by the assessee, it was submitted by ld. AR of assessee that the issue involved in CO is also regarding various comparables and therefore, if the issue raised by the revenue in its appeal in respect of TP adjustment is going back to the DRP for fresh decision, the issue raised by the assessee in C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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