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TMI Blog2016 (7) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... find that the AO had filed the appeal with delay of 29 days. The learned AO has submitted a Petition dated 27.05.2015 seeking condonation of delay and the AO stated in this petition that the delay of 29 days in filing the appeal before this Tribunal is on account of mixing up of papers in his office and it took time to locate the same and as soon as he traced the records, he filed the appeal on 27.05.2015. In our opinion, the reasons explained by the AO for filing the appeal belatedly is bonafide. Accordingly, the delay is condoned. 3. In this case, the assessee considered M/s.Quintegra Solutions Limited (Quintegra) as comparable. The TPO rejected the same on the reason that the company is being reported loss since the year ended 31.03.2009. Another reason for exclusion of the comparable is that the comparable had been incurring heavy losses continuously due to extraordinary events i.e., takeover of companies by the comparable during the F.Y. 2008-09 & 2009-10 as mentioned in director's report. The DRP directed to exclude, only if there is loss in continuous years i.e. F.Y 2007-08, 2008-09 & 2009-10. Further, the DRP has also concurred with the submissions of the assessee that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determining the ALP. We fmd merit in the argument of the assessee's counsel. Determining of ALP is depend upon the comparables of identical or similar in controlled transactions in similar or comparable circumstances and thereafter suitable adjustment has to be made to set off the difference to make the transaction commercially comparable. Upon careful consideration of the assessee's counsel plea, we find ourselves in agreement with the assessee's contention that only abnormal loss making companies are to be taken out from the comparables. The judgement relied on by the assessee's counsel in Quark Systems Pvt. Ltd. (32 TTJ 1) (Chd.)(SB) supports the assessee's counsel arguments. Being so, for proper comparables these three companies viz., items at 11, 13 and 14 are to be included in the comparables if their loss is on account of normal business reasons and segmental turnover is above Rs. 1 crore. This view of ours is also supported by the order of the Tribunal Delhi Bench in the case of Sapient Corporation Pvt. Ltd. (15 ITR (Trib) 285), Genisys Integrating Systems India Pvt. Ltd. (15 ITR (Trib) 475) (Bangalore Bench) wherein held that when companies which are loss making are exclud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision of ITAT Bangalore in the case of M/s.3DPLM Software Solutions Ltd. Vs. DCIT in ITA No.1303/Bangalore/.2012 observed as follows:- "We have heard the rival submissions and perused and carefully considered the material on record. It is seen from the details brought on record that this company i.e. Quintegra Solutions Ltd. is engaged in product engineering services and is not purely a software development service provider as is the assessee in the case on hand. It is also seen that this company is also engaged in proprietary software products and has substantial R&D activity which has resulted in creation of its IPRs. Having applied for trade mark registration of its products, it evidences the fact that this company owns intangible assets. The co-ordinate bench of this Tribunal in the case of 2417 Customer.Com Pvt. Ltd. (1TA No.227/8ang/201o dt.9.11.2012) has held that if a company possesses or owns 1TA No. 5401/Del/2012 intangibles or IPRs, then it cannot be considered as a comparable company to one that does not own intangibles and requires to be omitted from the list of comparables, as in the case on hand." The Co-ordinate Bench of Delhi Tribunal in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Chennai Special Bench in the case of Sak Soft Ltd., (surpa). Since the Ld.CIT(A) has rightly followed the decision of the decision of Sak Soft Ltd., cited supra and held the issues in favour of the assessee. 8.1 In the result, the Revenue's appeal is partly allowed for statistical purposes. Now coming to Assessee's appeal in ITA No.1004/Mds./15 9. The assessee in this appeal has raised the following grounds for our adjudication. A. General 1. On the facts and in the circumstances of the case and in law, the learned AO has erred in assessing the total income at Rs. 1,85,40,404/- as against income of Rs. 1,12,09,519 (as per the return of income filed by the Appellant on 29 September 2010); B. Reduction of deduction claimed under section 10AA of the Act 2. On the facts and in the circumstances of the case and in law, the Hon'ble DRP and consequentially the learned AO has erred by reducing entire expenditure incurred in foreign currency and insurance expenses from export turnover while computing deduction under section 1OAA of the Act; 3. On the facts and in the circumstances of the case and in law, the learned AO has erred in not following the directions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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