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2015 (10) TMI 461 - ITAT BANGALORETransfer Pricing Issues - whether CIT(A) erred in holding that foreign exchange loss / gain to be operating in nature without ascertaining the nexus between the forex gain/loss with the business activity of the assessee and without appreciating that this gain/loss is not derived from the operating activity of the assessee? - Held that:- It has not been disputed that the foreign exchange gain has arisen as a consequence of the realization of the consideration for rendering ITES services and therefore there is no reason for its exclusion from the operating revenues for the purpose of calculating the operating margin of the assessee. Following the decision of Triology E Business Software India Pvt. Ltd. (2013 (1) TMI 672 - ITAT BANGALORE ) we hold that operating revenue should be computed by including the foreign exchange gain/loss. - Decided against revenue. Computation of deduction u/s.10A - Held that:- We find that this ground is covered in favour of the assessee by the decision of the Hon'ble Karnataka High Court in the case of CIT V Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT ], wherein the Hon'ble Court has held that telecommunication expenses reduced from export turnover should also be reduced from export turnover while computing deduction under Section 10A of the Act. Respectfully following the aforesaid decision of the Hon'ble Karnataka High Court in the case of Tata Elxsi Ltd. (supra) the deduction under Section 10A of the Act by excluding the telecommunication expenses from both export turnover as well as from total turnover.- Decided against revenue.
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