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TMI Blog2017 (1) TMI 1739X X X X Extracts X X X X X X X X Extracts X X X X ..... e Hon ble Apex Court. Whether interest income is assessed under the head Income from business or Income from other sources is not having any impact on the tax liability of the assessee in the present year, we hold that this issue is only of academic interest in the present year and we do not enter into this aspect in the present year and the same is left open for a decision in a later year where it will have an impact on the tax liability of the assessee. Allowability of expenditure on purchase of computer software along with related hardware - HELD THAT:- Expenditure incurred on purchase of computer software along with related hardware is not allowable as revenue expenditure u/s 37 and only depreciation thereon is allowable as per the applicable rate but the income of the assessee should be considered after making this disallowance for the purpose of computing deduction allowable to the assessee u/s 10A of the IT Act because in our considered opinion, if an amount is not allowable on the basis of this dispute that it is capital expenditure and not revenue expenditure then it has to be accepted that the actual business income was the income assessed after making such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in adopting a faulty process of selection of comparable companies without taking into account aspects such as the influence of extraordinary events, abnormality in the financial results of the concerned year, reliability of the financial data and the failure of his own filters. 5. The Honorable DRP and the learned AOITPO erred in fact and in law in using selective information, which was not available in public domain, obtained under section 133(6) of the Income-tax Act, 1961 ( the Act ) without any independent validation of the data provided and by ignoring the inconsistencies therein with the information available in public domain, including the audited financial statements, of the comparable companies. 6. The learned TPO erred in computing the operating margins of the comparable companies at higher levels and determining the operating margin of the Appellant to be lower than the margin actually earned by the Appellant. The Honorable DRP and the learned AO have erred in upholding the same. The exercise of computation of margins ignores certain items which ought to have been considered as operating or non-operating items, as the case may be, and also ignores risk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore not being eligible for deduction under section 37 of the Act but only entitled to depreciation at 60 percent. Consequential Grounds 14. The learned AO has erred in not granting a higher foreign tax credit based on the assessed income. 15. The Honourable DRP and the learned AOITPO has erred in law and on facts in levying interest under section 2348 and section 2340 of the Act. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds, at any time before or at the time of hearing of the appeal. Each of the above objections is independent and without prejudice to the other grounds preferred by the Appellant. The Appellant-Company does not have a Managing Director and hence these concise grounds of appeals are signed by the Director of the Company in accordance with the provisions of the Act As per letter dated 17-11-2014, the grounds raised are 15 as reproduced above. Subsequently, the assessee has filed another letter dated 25-10-2016 filed on 10-11-2016 as per which it was submitted that ground no. 1 to 8 pertain to TP adjustment are not pressed and additional grounds raised earlier vide letter dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and only depreciation is allowable at the rate of 60%, but the resulting disallowance should be added to the profit of the assessee company for computation of deduction allowable u/s 10A of the IT Act, 1961. 7. Regarding ground no. 14, he submitted that the issue regarding granting of foreign tax credit may be restored back to the file of the AO for fresh decision. At this juncture, a query was raised by the Bench as to whether the income in respect of which the assessee is claiming foreign tax credit has been brought to tax in the hands of the assessee in the present year in India or whether the same was considered as eligible for exemption. In reply, it was submitted by the ld. AR of the assessee that this aspect of the matter may be also be restored back to the file of the AO for fresh decision with direction to AO to allow foreign tax credit only in respect of those incomes which were taxed in foreign country and on which no exemption is claimed or allowed in India. 8. As against this, the ld. DR of the revenue supported the orders of the authorities below. 9. We have considered the rival submissions. Ground no. 1 to 8 and additional grounds are rejected as withdrawn. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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