TMI Blog2018 (7) TMI 2166X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income Tax, decided on 20.10.2015 since reported in [ 2015 (10) TMI 634 - KARNATAKA HIGH COURT] , which has been affirmed in the case of Commissioner of Income-tax, Central III vs. HCL Technologies Ltd.,. [ 2018 (5) TMI 357 - SUPREME COURT] . 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 would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature. Even in common parlance, when the object of the formula is to arrive at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paras VI[2] and VI[3] in the appeal memorandum. However, learned counsel for the Revenue seeks to consider all the three substantialquestions of law framed in the memorandum of appeal. 3.The substantial questions of law framed by the Revenue in the Memorandum of Appeal are as under: 1. Whether, on the facts and circumstances of the case, the Tribunal is right in law in setting aside the re-computation of deduction under section 10A of the Act by following the decision ofthis Hon ble High Court in the case of CIT V/s. Tata Elxsi which has not reached finality? 2. Whether, on the facts and circumstances of the case, the Tribunal is right in law in directingassessing authority/Transfer Pricing Officer to exclude certain comparable b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 17. The similar nature of controversy, akin 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 excl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Equant Solutions India [P] Ltd., [supra]. The relevant paras are reproduced below: xxxxxx Therefore, we uphold the deletion of this company from the list of comparables. 23. Ground No.9 challenges the deletion of assessment of outstanding interest charged on outstanding debtors. On this issue, the DRP held as follows: xxxxx This issue has been adjudicated by the co-ordinate bench in the case of in ITA No.327/Bang/2015 dated 07.03.2017 in the case of ACIT V/s. M/s. Millipore [India] Ltd., wherein it has been held that the transaction of interest on outstanding debtors is not an independent transaction. The relevant paras are reproduced below: xxxxx The ground of appeal raised by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered opinion, give rise to any substantial question of law. 56. We are therefore of the considered opinion that 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. 57. We make it clear that 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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