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TMI Blog2018 (7) TMI 2227X X X X Extracts X X X X X X X X Extracts X X X X ..... A.No.489/2017 - - - Dated:- 5-7-2018 - Dr. VINEET KOTHARI AND Mrs. S.SUJATHA, JJ. Appellants By: Mr. K.V. Aravind, Adv. Respondent By: Mr. Mallaharao K Sandeep S. Karhail, Advs. JUDGMENT 1. The Appellants-Revenue have filed this appeal u/s.260A of the Income Tax Act, 1961, raising purportedly certain substantial questions of law arising from the order of the ITAT, Bengaluru Bench A , Bengaluru, dated 16.01.2017 passed in IT(TP)A No.44/Bang/2015 (Cerner Healthcare Solutions Pvt. Ltd., vs. Income Tax Officer) for A.Y.2010-11. 2. The proposed substantial questions of law framed in the Memorandum of appeal by the Appellants-Revenue are quoted below for ready reference:- 1. Whether on the facts and in the circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in directing the assessing authority to accept the TPO to consider Foreign Exchange Fluctuation as operating in nature by relying on its earlier decision in the case of Electronics for Imaging India Pvt. Ltd even when the Transfer Pricing Officer has rightly treated foreign exchange fluctuations as non-operating in nature? . 3. Learned counsel for the Appellants-Revenue Mr.K.V.Aravind submits that he does not press the substantial question of law No.1, as the issue regarding deduction of expenditure incurred for Export Turn Over is also required to be deducted from Total Turn Over for the purpose of computing the deduction u/s.10A of the Act, the controversy is no longer res integra and is covered by the decision of the Division B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, if the deductions on freight, telecommunication and insurance attributable to the delivery of computer software under Section 10A of the IT Act are allowed only in Export Turnover but not from the Total Turnover then, it would give rise to inadvertent, unlawful, meaningless and illogical result which would cause grave injustice to the Respondent which could have never been the intention of the legislature. 20. Even in common parlance, when the object of the formula is to arrive at the profit from export business, expenses excluded from export turnover have to be excluded from total turnover also. Otherwise, any other interpretation makes the formula unworkable and absurd. Hence, we are satisfied that such deduction shall be allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re only should be taken into consideration for the TP study and hence directed the TPO to exclude Infosys Ltd, Larsen Toubro Infotech Ltd, Mindtree Ltd (seg) , Persistent System Ltd, Sasken communication Technologies and Tata Elxsi Ltd(seg) against which the Revenue filed appeals. However, from the decisions extracted , supra , the assessee has made out a case for the exclusion of ICRA Techno Analytics Ltd. (seg), Infosys Technologies Ltd., KALS Information Systems Ltd, Persistent Systems Ltd, Sasken Communication Technologies Ltd, Tata Elxsi Ltd and L T Infotech Ltd. Following them, we direct the TPO to exclude them from the list of comparables. To that extent, the assessee s appeal grounds are allowed and the Revenue s appeal grounds ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeals of the present tenor as to whether the comparables have been rightly picked up or not, Filters for arriving at the correct list of comparables have been rightly applied or not, do not in our considered opinion, give rise to any substantial question of law. 56. We are therefore of the considered opinion that the present appeals filed by the Revenue do not give rise to any substantial question of law and the suggested substantial questions of law do not meet the requirements of Section 260-A of the Act and thus the appeals filed by the Revenue are found to be devoid of merit and the same are liable to be dismissed. 57. We make it clear that the same yardsticks and parameters will have to be applied, even if such appeals are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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