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TMI Blog2014 (10) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... what interconnected and which we will take up together, are as follows: 1. The CIT(A) erred in holding that the amount of Rs. 5,88,254 towards superannuation fund was extraordinary expenditure. This amount has been charged as a normal cost by the assessee to the profit and loss account, and nothing has been inferred by the auditirs to the contrary. 2. The CIT(A) erred in holding that depreciation of Rs. 8,21,628 on software was extra ordinary expenditure. This amount has been charged as an allowable cost to the audited profit and loss account and nothing contrary has been inferred by the auditors in the tax audit report. 3. The CIT(A) erred in holding that the amount of forex gain by the assessee is an operating income. This is con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of providing computer aided services, for engineering and design of automobile components, on project basis. During the relevant financial year, the assessee reported international transactions in respect of (1) CAD and development of automobiles parts and production equipment for Rs. 4.82 crores; (2) Technical consultancy, sales commission and translation charges for Rs. 1.81 crore; and (3) Loan for Rs. 1.02 crores (interest of Rs. 4.36 lakhs). To benchmark arm's length price of these transactions, the assessee used the TNMM method with OP/ Sales as the profit level indicator. So far as the dispute before us is concerned, the only relevant aspect is that in the computation of operating profit, the assessee did not take into account supera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uperannuation contribution of Rs. 5,88,254 pertains to the assessment year 2000-01 and 2001-02. This finding remains uncontroverted. In this view of the matter, there cannot indeed be any rationale in taking into account this expenditure for computation of operating profits of the assessee for the current year. Similarly, there is a categorical finding that Catia software, in respect of which amount of Rs. 8,21,628 was excluded, was not used for the purpose of any work in the relevant previous year and it was only subsequent year that this software was actually used. This finding also remains uncontroverted. Clearly, therefore, this expense cannot be included in the computation of operating profit for the current year. As regards forex gain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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