TMI Blog2020 (4) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue. It would be just and appropriate to direct the Assessing Officer to exclude the charges both from export turnover and total turnover, as has been prayed for by the assessee in the alternative. In view of the acceptance of the alternative prayer, we are of the view that no adjudication is required on the ground whether the aforesaid sums are required to be excluded from the export turnover. Moreover, the order of the Hon ble Karnataka High Court has been upheld in HCL TECHNOLOGIES LTD. [ 2018 (5) TMI 357 - SUPREME COURT] - IT(TP)A No.632/Bang/2015, IT(TP)A No.658/Bang/2015 - - - Dated:- 12-2-2020 - Shri N.V. Vasudevan, Vice-President And Shri A.K. Garodia, Accountant Member For the Appellant : Shri P.C.Khincha, CA For the Respondent : Shri Manjeet Singh, Addl.CIT ORDER PER N.V. VASUDEVAN, VICE-PRESIDENT IT(TP)A No.632/Bang/2015 is an appeal by the Assessee while IT (TP)A.No.658/Bang/2015 is an appeal by the Revenue. Both these appeals are directed against the order dated 23.2.2015 of CIT(A)-IV, Bangalore, relating to A.Y.2009-10. 2. The Assesseee is a company engaged in the business of rendering Software Development Services (SWD Services). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13.89 12.45 2 Akshay Software Technologies Ltd 8.11 8.62 3 Bodhtree Consulting Ltd. 62.27 60.76 4 RS Software (I) Ltd. 9.97 10.99 5 Tata Elxsi Ltd. (seg) 20.28 19.47 6 Sasken Communication Technologies Ltd 27.91 27.73 7 Persistent Systems Ltd. 41.40 40.05 8 Zylog Systems Ltd. 7.81 5.15 9 Mindtree Ltd. (seg) 5.52 3.87 10 L T Infotech Ltd. 24.72 24.77 11 Infosys Technologies Ltd. 45.61 42.77 Arithmetical Mean 24.32 23.33 6. Computa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds challenging the order of CIT(A) in so far as it relates to determination of ALP in the SWD services segment. However at the time of hearing the learned counsel for the Assessee prayed for exclusion of only one comparable retained by the CIT(A) as a comparable company viz., M/S.Bodhtree Consulting Ltd. 10. As far as exclusion of 7 companies listed above which are part of the final comparable companies chosen by the TPO are concerned, we find that the turnover of these companies is 10 times greater than the turnover of the assessee which is only a sum of ₹ 25,50,19,320. The turnover of (i) M/S.Tata Elsi Ltd., (Turnover ₹ 378,43,03,000) (ii) Sasken Communication Technologies Ltd. (Turnover ₹ 405,31,20,000) (iii) Persistent Systems Ltd. (Turnover ₹ 519,69,10,000) (iv) Zylog Systems Ltd. (Turnover ₹ 734,93,51.475) (v) Mindtree Ltd.(Turnover ₹ 793,22,79,326) (vi) Larsen and Toubro Infotech Ltd. (Turnover ₹ 1950,83,81,374 and (vii) Infosys Ltd. (turnover ₹ 20264,00,00,000). It has been held by the Hon ble Karnataka High Court in the case of Acusis Software (I) P. Ltd. v. ITO in ITA No.223/2017, judgment dated 14.8.2018 that if the tu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... venue in the grounds of appeal No.4 has projected its grievance regarding the action of the learned CIT(A) in excluding, while computing deduction u/s.10A of the Act, Communication expenses and expenses incurred in foreign currency from the export turnover on the ground that these expenses are attributable to delivery of software outside India from the export turnover but directed that the said sum should also be excluded from the total turnover while computing deduction u/s.10A of the Act. The Assessee was entitled to claim deduction u/s.10A of the Act on the profits derived from its SWD services unit. Sec.10A(4) provides the methodology of computation of deduction u/s.10A of the Act and it lays down that the profits derived from export of articles or things or computer software shall be the amount which bears to the profits of the business of the undertaking, the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the business carried on by the undertaking. Export turnover has been defined under Explanation 2 (iv) to Sec.10A as:- export turnover means the consideration in respect of export by the under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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