9911796707
TMI Blog2016 (6) TMI 1473X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the Assessee at the outset submitted that he had filed a petition seeking admission of additional evidence. Ld. AR submitted that assessee by mistake in its TP study, had made a wrong allocation of the revenue from software development services between AE and Non-AE. As per the Ld. AR, services provided by the assessee fell within the software development services stream. Revenues were incorrectly bifurcated between AE and non-AE, due to a mistake, as per the Ld. AR. Further as per the Ld. AR, TPO went by the bifurcation done by the assessee and proceeded with the transfer pricing analysis, relying on the figures of revenue stream worked out by the assessee. Final recommendations made by the TPO were based on the revenues from softw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; Software Development Services 399,187,679 96,725,461 1,918,471,860 2,414,385,000 Total Operating Income 399,187,679 96,725,461 1,918,471,860 2,414,385,000 Expenses Software Development Expenses 1,590,437,000 Other Operating and Administration Expenses 330,500,000 Depreciation 111,155,000 Financial Expenses (Bank charges) Total Operating Expenses 431,817,632 .107,724,897 1,492,549,471 2,032,092,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. However, the expenditure having been allocated based on turnover, the operating profit to operating cost ratio in the AE segment will under go substantial change if there is a change in the revenues shown in the AE segment. It is therefore fundamentally important that correct revenue is adopted for the AE as well as the non-AE segments for the TP study. TPO had proceeded to make the TP analysis based on the segmental results given by the assessee originally. This, in our opinion could lead to functionally wrong results. We are therefore of the opinion that the issue regarding Transfer pricing requires a fresh look by the lower authorities so that the revenue stream is correctly bifurcated between AE and non-AE segment. This being a thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he deduction u/s.10A of the Act. AO is directed to do so. Ground 9 is partly allowed. 09. Vide ground 10, grievance raised by the assessee is that loss brought forward from the earlier years, were not allowed to be set off. Counsel for the assessee submitted that loss for the earlier years after giving effect to the appellate decisions had to be set off against the current business income of the assessee. 10. Per contra, Ld. DR submitted that assessee had never claimed such losses and Audit report in Form 3 CED did not reveal any such loss. 11. We have heard the rival contentions. We are of the opinion that the matter can be verified by the AO. If the assessee had not claimed set-off of brought forward loss in its return of income, then ..... X X X X Extracts X X X X X X X X Extracts X X X X
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