TMI Blog2021 (8) TMI 1095X X X X Extracts X X X X X X X X Extracts X X X X ..... ble companies. Benefit of deduction u/s 10A in respect of additions agreed for the MAP proceedings - HELD THAT:- On identical facts, the Tribunal in assessee s own case [ 2020 (6) TMI 699 - ITAT BANGALORE] had held that additions agreed under MAP proceedings was entitled to the benefit of deduction u/s 10A. Deduction u/s 10A of the I.T.Act by excluding the expenditure deducted from the export turnover also to be reduced from the total turnover - HELD THAT:- We are of the view that the above issue raised by the Revenue is no more res integra. As in the case of CIT v. HCL Technologies Ltd. [ 2018 (5) TMI 357 - SUPREME COURT] had held that when expenditure are reduced from the export turnover, the same need to be reduced also from the total turnover while calculating deduction u/s 10A of the I.T.Act. In view of the dictum laid down by the Hon ble Apex Court, ground No.1 raised in Revenue s appeal is rejected. - IT(TP)A No.1907/Bang/2017, IT(TP)A No.1971/Bang/2017 - - - Dated:- 25-8-2021 - Shri George George K, JM And Shri B.R.Baskaran, AM For the Revenue : Sri.Muzaffar Hussain, CIT-DR For the Assessee : Sri.T.Surayanarayana, Advocate ORDER PER GEO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal in the case of GXS India Technology Centre (P.) Ltd. (supra). The Bangalore Bench of ITAT in case of GXS India Technology Centre (P.) Ltd. had held that E-Zest Solutions Limited is primarily in KPO services and cannot be functionally compared to software development services companies. The relevant finding of the Bangalore Bench of the Tribunal reads as follow:- 10. E-Zest Solutions Ltd. The learned AR of the assessee has pointed out that this company is engaged in the business of consultancy services and technical services which is categorized as KPO services hence, it is functionally not comparable to the assessee. Further, this company has not provided segmental data as part of its annual report and financial reports, therefore, this company cannot be considered as a good comparable of the assessee. In support of his contention, he has relied upon the decision of the co-ordinate bench of this Tribunal in case of 3DPLM Software Solutions Ltd (Supra). 10.1 On the other hand, learned AR relied upon the order of the authorities below and submitted that this company is mainly in the business of software development and therefore, it is functionally comparable. 10.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusion of the same on account of RPT, being more than 15%, the assessee had relied on the order of the Bangalore Bench of the Tribunal in the case of GXS India Technology Centre (P.) Ltd. (supra). 5.1 The learned Departmental Representative supported the orders of the AO / TPO and the CIT(A). 5.2 We have heard rival submissions and perused the material on record. On identical facts, the Tribunal in the case of GXS India Technology Centre (P.) Ltd. (supra) had held that Softsol India Limited is to be excluded from the comparables list of companies on account of that it was having related party transactions in excess of 15%. In view of the above order of the Tribunal and also for the fact that assessment year being the same (A.Y.2008-2009), we direct the AO / TPO to exclude Softsol India Limited from the final list of comparable companies. It is ordered accordingly. Corporate Tax Issue (Ground Nos.15 and 16 of assessee s appeal in ITA No.1907/Bang/2017) 6. In the above grounds, the assessee is seeking for the benefit of deduction u/s 10A of the I.T.Act in respect of additions agreed for the MAP proceedings. In this context, the learned AR relied on the ITAT s orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident or national. This case must be presented within three years of the date of receipt of notice of the action which gives rise to taxation not in accordance with the Convention. 2. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention. Any agreement reached shall be implemented notwithstanding any time limits or other procedural limitations in the domestic law of the Contracting States. 3. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the Income-tax Act, 1961 (43 of 1961), or the rules made thereunder to the extent that they are not contrary to the resolution arrived at. Explanation.- For the purposes of rules 44G and 44H, Competent Authority of India shall mean an officer authorised by the Central Government for the purposes of discharging the functions as such. 34. The purpose for which the first proviso of section 92CA(4) of the Act was enacted is given in the CBDT Circular No.14/2001 dated 09.11.2001 as follows:- 55.12 The first proviso to section 92C(4) recognizes the commercial reality that even when a transfer pricing adjustment is made under that sub-section, the amount represented by the adjustment would not actually have been received in India or would have actually gone out of the country. Therefore, it has been provided that no deductions u/s 10A or 10B or under Chapter VI-A shall be allowed in respect of the amount of adjustment. 33. In the present case the conditions under which the dispute was resolved under MAP, was that the Assessee had to increase its taxable income and the sum agreed was to be subsequently invoiced and realized and thereby there was inflow of foreign e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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