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TMI Blog2018 (4) TMI 1934X X X X Extracts X X X X X X X X Extracts X X X X ..... excluded, as the case may be, in accordance with law. Disallowance made u/s. 14A r.w.r. 8D - HELD THAT:- Since, the assessee has not earned any dividend (exempt) income during the year, following the jurisdictional High Court decisions in the cases of Redington (India) Limited [ 2017 (1) TMI 318 - MADRAS HIGH COURT] and CIT, Central(1), Chennai vs Chettinad Logistics Pvt. Ltd [ 2017 (4) TMI 298 - MADRAS HIGH COURT] the addition made by the AO is deleted and the assessee s grounds in this regard is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ct has not been adjudicated by the DRP. He submitted that this comparable was excluded as a comparable for ITeS companies in the following rulings owing to different functional profile and business model: a. Xchanging Technology Services India (P) Ltd Vs DCIT [2015] 57 taxmann.com 437 - Delhi ITAT Confirmed by the High Court of Delhi in ITA No. 813/2015 on 20.10.2015; b. Xchanging Technology Services India (P) Ltd Vs DCIT [2015] 60 taxmann.com 389 - Delhi ITAT - Confirmed by the High Court of Delhi in ITA No. 36/2016 on 19.01.2016 c. Rampgreen Solutions Pvt. Ltd. - [2015] 60 taxmann.com 355 (Delhi) - Delhi High Court d. Parexel International (India) (P) Ltd [2014] 51 taxmann.com 238 - Hyderabad ITAT e. Cummins Turbo Technologi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ives its income mainly from its related parties and furnished a snapshot of the RPT to sales as under : Year on year analysis of RPT ratio Particulars FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11 Sales (in INR) 37,07,24,095 21,43,70,565 9,74,95,149 11,56,11,146 Income from RPT (in INR) 37,07,24,095 11,90,93,313 2,39,72,792, 11,40,89,195 RPT/Sales (in %) 100.00% 55.55% 24.59% 98.68% The AR submitted the impact on profits on account of merger as under: Particulars FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11 FY 2011-12 Operating Income (A) 37,07,24,095 21,43,70,565 9,74,95,149 11,56,11,146 12,43,12,692 Profit before taxes (B) 72,92,243 2,37,75,610 3,13,43,736 4,29,81,241 5,34,90,919 Operating margin (B/A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnished by the assessee were not neither before the TPO/AO nor before the DRP. The DR submitted that wherever information was furnished, the DRP has directed the TPO to examine and pass necessary orders. He invited our attention to the DRP's direction with regard to the comparable Jeevan Scientific Technologies Limited, wherein, the DRP directed the TPO to examine the segmental data and pass necessary orders. Thus, he supported the orders of the lower authorities. 6. We heard the rival submissions. Since the assessee has furnished the required particulars and relying on the decisions of Tribunal / High Court, we remit the issues in connection with the above comparables to the TPO/A O for a fresh examination. In respect of the comparables, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be included in the computation of average investments. Without prejudice to the above, the AO ought not to have considered that the investments which did not yield dividend income during the previous year while computing the quantum of disallowance under Rule 8D(2)(ii) and (iii) of the Rules. 8. Per contra, the DR supported the order of the DRP. He invited our attention to the DRP order and submitted that the DRP relied on the jurisdictional bench of ITAT, Chennai in the case of Southern Petro Chemical Industries vs DCIT 93 TTJ 161, which has approved the disallowance of proportionate management expenses while computing the dividend income. The Special Bench decision of ITAT in the case of Cheminvest Ltd. vs ITO [2009] 121 ITD 318 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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