TMI Blog2018 (5) TMI 2175X X X X Extracts X X X X X X X X Extracts X X X X ..... as also stressed by the assessee that it had not earned more than ordinary profits - HELD THAT:- We find the issue raised in present appeal stands covered by a series of decisions of Pune Bench of Tribunal and on this count, we rely on the decision of M/s. Honey well Automation India Ltd. [ 2015 (3) TMI 494 - ITAT PUNE] wherein held even if it is accepted that the difference between the operating margins of the assessee and the comparables show existence of more than the ordinary profits in the hands of the assessee, so however, it was still imperative for the AO to establish on the basis of substantive evidence and corroborative material that qua section 10A r.w.s. 80-IA(10) of the Act, the course of business between the assessee and the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in directing the AO to delete the addition made u/s. 10A(7) of the I.T. Act, 1961 of Rs.2,88,69,742/- 3. The appellant craves leave to add, amend or alter any of the above grounds of appeal. 3. The Revenue is in appeal against the order of CIT(A) in holding that the Assessing Officer was not justified in invoking provisions of section 10A(7) of the Act and to delete the addition of Rs.2,88,69,742/-. 4. Briefly in the facts of the case, the assessee was a joint venture Company between Tata Comp Systems Ltd. India (TACO) and Faurecia Automotive Holidays, France with equal share holding, had unit registered in the Software Technology Park (STP) and was engaged in the business of design engineering services. The assessee company filed its retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A), the assessee pleaded that the course of business between assessee and group company/AEs was not so arranged as covered under section 10A(7) r.w.s. 80IA(10) of the Act. It was further pointed out that assessee had not earned more than ordinary profits and the margin shown by comparables could not be bench-marked for ordinary profits as per section 10A(7) of the Act. It was further pointed out by the assessee that provisions of section 10A(7) r.w.s. 80IA(10) of the Act were not applicable to the international transactions. The CIT(A) held that operating margins of the assessee had been fluctuating over the years, depending upon performance of the company. The operating margins of the assessee had been fluctuating from 18.42% to 38.73% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer held that ordinary profits as per transfer pricing report was @ 12.55% as against 29.14% shown by the assessee. No adjustment on account of arm s length price was proposed by the TPO. However, the TPO requested the Assessing Officer to verify the feasibility of disallowance under section 10A (7) r.w.s 80IA(10) of the Act on the surmise that the assessee had earned higher margins than the mean margins earned by comparables selected by assessee. Accordingly, deduction claimed under section 10A of the Act was reworked at Rs. 2,88,69,742/- and added back the total income of the assessee. The case of the assessee before Authorities below was that in the absence of any arrangement between the assessee and its group companies/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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