TMI Blog2018 (7) TMI 2160X X X X Extracts X X X X X X X X Extracts X X X X ..... LD THAT:- Whether the comparables have been rightly picked up or not, Filters for arriving at the correct list of comparables have been rightly applied or not, do not in our considered opinion, give rise toany substantial question of law. The present appeals filed by the Revenue do not give rise to any substantial question of law and the suggested substantial questions of law do not meet the requirements of Section 260-A of the Act and thus the appeals filed by the Revenue are found to be devoid of merit and the same are liable to be dismissed. The same yardsticks and parameters will have to be applied, even if such appeals are filed by the Assessees, because, there may be cases where the Tribunal giving its own reasons and findings has found certain comparables to be good comparables to arrive at an Arm s Length Price in the case of the assessees with which the assessees may not be satisfied and have filed such appeals before this Court. Therefore we clarify that mere dissatisfaction with the findings of facts arrived at by the learned Tribunal is not at all a sufficient reason to invoke Section 260-A of the Act before this Court. - I.T.A. No. 700/2017 - - - Dated:- 5-7- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this case, arose before the Karnataka High Court in CIT v. Tata Elxsi Ltd. [2012] 204 Taxman 321/17/taxman.com 100/349 ITR 98. The issue before the Karnataka High Court was whether the Tribunal was correct in holding that while computing relief under Section 10A of the IT Act, the amount of communication expenses should be excluded from the total turnover if the same are reduced from the export turnover? While giving the answer to the issue, the High Court, inter-alia, held that when a particular word is not defined by the legislature and an ordinary meaning is to be attributed to it, the said ordinary meaning is to be in conformity with the context in which it is used. Hence, what is excluded from export turnover must also be excluded from total turnover , since one of the components of total turnover is export turnover. Any other interpretation would run counter to the legislativeintent and would be impermissible. 18. XXXXXX 19. In the instant case, if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee raised objection against inclusion of this company in the list of comparables before the TPO on the ground that this company has major revenue from translation services. Therefore, this company is functionally different from the services provided by the assessee to its AE. The learned AR of the assessee has referred to the Annual report of this company and submitted that out of the total revenue of ₹ 7,37,02,584/-, this company has earned revenue from translation charges to the tune of ₹ 6,99,35,756/-. Therefore, substantial part of the revenue has been earned from the activity of translation. The learned AR of the assessee has further pointed out that even otherwise this company is outsourcing the work of translation as it is evident from the profit andloss account of this company that an amount of ₹ 3,00,25,326/- has been paid on account of translation charges. Thus, learned AR of the assessee has submitted that this company cannot be considered as functionally comparable with the assessee has submitted that this company cannot be considered as functionally comparable with the assessee for the purpose of determining the ALP. In support of his c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e companies remaining after the exclusion were independent risk bearing entities. The assessee therefore prayed that the TP Officer may be directed to provide risk adjustment to the assessee. 9.2 The Hon ble Tribunal in the case of Moog Controls (India) Private Limited (supra) at para 29have directed to allow the actual adjustment towards the differences in the working capital position between the assessee and the entrepreneurial companies selected by the TP Officer. The assessee accordingly prayed that the TP Officer may be directed to provide actual working capital adjustment i.e., without restrictions. 9.3 We have considered the above submissions and found merit in them. In view of that the revised ground No 11 of the assessee s appeal is allowed and the ground No 2 of the Revenue s appeal is dismissed. 5. This Court in ITA No.536/2015 C/w ITA No.537/2015delivered on 25.06.2018 (Prl. Commissioner of Income Tax Anr. Vs. M/s. Softbrands India Pvt. Ltd.,) has held that in these type of cases, unless an ex-facie perversity in the findings of the learned Income Tax Appellate Tribunal is established by the appellant, the appeal at the instance of an assessee or the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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