TMI Blog2018 (7) TMI 2257X X X X Extracts X X X X X X X X Extracts X X X X ..... . Otherwise, any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well Comparable selection - HELD THAT:- We direct the TPO to include Akshay Software Technologies Ltd., (2) Maars Software International Ltd and (3) VJIL Consulting Ltd., for the reasons by the Assessee Negative working capital adjustment - HELD THAT:- No need for making any negative working capital adjustment when assessee does not carry any capital risk. In fact, TPO should have done necessary working capital adjustment to the profits of the selected comparables so as to make them comparable - See Adaptec (India) P. Ltd. [ 2015 (6) TMI 288 - ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... questions of law arising from the Order of the learned Income Tax Appellate Tribunal Bangalore Bench B , Annexure D dated 09/12/2016 in ITA.No.1340/Bang/2011 for AY 2007-08. 2. The Revenue has suggested five substantial questions of law, which are quoted below for ready reference: 1. Whether on the facts and circumstances of the case, the Tribunal is correct in directing the assessing officer to exclude expenses incurred in foreign currency and other expenses that has been excluded from ETO, from the total turnover also and accordingly recomputed the deduction under section 10A without appreciating the fact that there is no provision in sec.10A that such expenses should be reduced from the total turnover also as clause (iv) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ?5. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in directing the TPO to include comparable s namely, Mars Software International Ltd, Akshay Software Technologies and VJIL Consulting Ltd even when the TPO has rightly rejected same as they do not satisfy the required tests? 3. The learned counsel appearing for the Appellants Revenue, Mr.K.V. Aravind submitted that in so far as the first substantial question of law is concerned, the same is covered by the decision of the Hon ble Apex Court in the case of Commissioner of Income-tax, Central III vs. HCL Technologies Ltd., [2018] 93 Taxmann.com 33(SC). The relevant portion of the judgment of the Hon ble Supreme Court in the case of HCL Tec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. Even in common parlance, when the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise, any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed from the total turnover in same proportion as well . 4. In so far as the second and fifth substantial questions of law raised by the Revenue are concerned, the learned counsel for the Revenue submitted that the learned ITAT in its Order dated 09/12/2016 has given the findings, the relevant portion of which is quoted below for ready reference:- 8. We are in agreement to the request of ld. Counsel for the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Adaptec (India) P. Ltd Vs. ACIT [ITA Bi, 206/Hyd 2014], wherein it was held that there is no need for making any negative working capital adjustment when assessee does not carry any working capital risk. The relevant extract of the aforementioned judgment is provided below: 11. In view of the above, we are of the opinion that assessee s being similar, there is no need for making any negative working capital adjustment when assessee does not carry any capital risk. In fact, TPO should have done necessary working capital adjustment to the profits of the selected comparables so as to make them comparable to the ITA.No.206/Hyd/ 2014 Adaptec (India)P.Ltd., Hyderabad. 6. In so far as the fourth substantial question of law r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s established by the appellant, the appeal at the instance of an assessee or the Revenue under Section 260-A of the Act is not maintainable and the relevant portion of the said judgment is quoted below for ready reference: Conclusion: 55. A substantial quantum of international trade and transactions depends upon the fair and quick judicial dispensation in such cases. Had it been a case of substantial question of interpretation of provisions of Double Taxation Avoidance Treaties (DTAA), interpretation of provisions of the Income Tax Act or Overriding Effect of the Treaties over the Domestic Legislations or the questions like Treaty Shopping, Base Erosion and Profit Shifting (BEPS), Transfer of Shares in Tax Havens (like in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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