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TMI Blog2017 (3) TMI 1322X X X X Extracts X X X X X X X X Extracts X X X X ..... t of article or thing outside India has to be excluded both from export turnover as well as total turnover while computing exemption u/s 10A of the Act. In view of the above, we uphold the order of the CIT(A) and dismiss the ground raised by the revenue. TP adjustment - selection of comparable - Held that:- As the revenue is objecting to exclusion of these 8 companies as comparables while the assessee is insisting to inclusion of four companies as comparables, we revert this issue back to the file of the TPO to re-do the issue after considering the submissions of the assessee and the assessee may be given opportunity of being heard in the matter. Accordingly, ground allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... TPO before the CIT(A)." 2. Briefly the facts of the case are that the assessee is engaged in the business of providing Software Development Services. It filed its return of income on 31/10/2007 declaring a total income of ₹ 26,06,670/- after claiming deduction u/s 10A of the Income-tax Act, 1961 (in short 'the Act'). The AO disallowed the claim of deduction u/s 10A and also made an addition u/s 92CA(4) of ₹ 1,68,96,706/-. Accordingly, the total income was assessed at ₹ 2,40,58,169/-. 3. As regards the ground No.1 relates to the disallowance of deduction u/s 10A of ₹ 45,54,792/-, the AO held that the undertaking for which the assessee had claimed deduction was not a new undertaking and had been formed by transferri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Gem Plus Jewellery (330 ITR 175) as well as different Benches of Tribunal including ITAT, Chennai Bench (SB) in the case of ITO vs. Sak Soft (313 ITR (AT) 853) have held that communication charges attributable directly to the export of article or thing outside India has to be excluded both from export turnover as well as total turnover while computing exemption u/s 10A of the Act. In view of the above, we uphold the order of the CIT(A) and dismiss the ground raised by the revenue. 6. As regards ground Nos. 2 to 4 with regard to TP adjustment and selection of comparables, the TPO accepted two of the comparables, viz. Mindtree Consulting Ltd. and SIT Technologies & Exports Ltd. adopted by the TP documentation of the assessee, though he too ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 20. R Systems International Ltd. (seg.) 15.07% 21. Sasken Communication (seg.) 22.16% 22. Tata Elxsi Ltd. (seg) 26.51% 23. Thirdware Solutions Ltd. (seg.) 25.12% 24. Wipro Ltd. (seg.) 33.65% 7.2 In the course of appellate proceedings before the CIT(A), the AR relied on the following decisions and submitted that the same comparables were adopted by the TPO in the following cases and the same were rejected by the ITAT.: 1. Intoto Software India Pvt. Ltd., Vs. aCIT [2013] 35 Taxman.com 421 (Hyd.) 2. Virtusa India Pvt. Ld. Vs. DCIT [2013] 38 Taxman.com 166 (Hyd.) 3. DE Shaw India Software Pvt. Ltd. Vs. ACIT (ITA No. 2071/Hyd/2011, dtd. 27/11/2013.) 4. Market Tools Research Pvt. Ltd. (ITA No. 1150/Hyd/2011, dated 05/02/2014.) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies: 1. E-Zest Solutions Ltd., 2. Igate Global Solutions Ltd., 3. Persistent Systems Ltd., and 4. Helios & Atheson Information. 11. Considered the rival submissions and perused the material facts on record. The TPO has selected 26 companies as comparables, out of which, the CIT(A) has rejected 24 companies as comparables and retained two companies as comparables. The revenue has objected for rejection of 8 companies, out of which, assessee's contention is that four companies cannot be included as comparables. As per the submissions of the AR of the assessee, the ITAT, Bangalore Bench in the case of M/s Society General Global Solution Centre Pvt. Ltd., (ITA No. 1188/Bang/2011 - AY 2007-08) vide its order dated 22/04/2016, held that E-Zes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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