9911796707
TMI Blog2011 (9) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act, 1961. 2. In this appeal, the assessee is aggrieved by the order of the Assessing Officer in disallowing the claim of the assessee for full deduction u/s 10A for all of its profit and gains from the software business of the STPI unit at Bangalore by adopting as the denominator, the total turnover of the business without deducting the expenditure on delivery of software outside India and expenses incurred in foreign currency which has been reduced from the nominator, the export turnover. The assessee is also aggrieved by the adjustment made to the arms length price of the transaction between the assessee and its associated enterprises which has been confirmed by the DRP. 3. The brief facts of the case are that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction u/s 10A of the Act and forwarded the same to the DRP and also to the assessee. The assessee filed its objections before the DRP, which confirmed the draft order of the AO. Against this order of the AO, confirmed by the DRP, the assessee is in appeal before us. 4. The learned counsel for the assessee reiterated the submissions made by the assessee before the authorities below. Further, the Assessing Officer had also reduced the expenses in foreign currency for delivery of software and telecommunication charges from export turnover but not from the total turn over for computing the deduction u/s 10A of the Act. Against this disallowance u/s 10A also, the assessee is in appeal before us. 5. At the time of hearing, the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee. As regards the determination of the ALP, the learned counsel for the assessee submitted that TPO has not taken into consideration the difference in the risks assumed by the assessee vis- -vis comparable companies because the assessee operates in a risk free environment as compared to the comparable companies. As regards comparables considered by the Assessing Officer, he submitted that one of the comparables i.e Mega soft has been wrongly considered though it is a software product and services company and no segmental break up of its revenues was available. He further submitted that the profits of the assessee company are tax free in India and, therefore, there is no attempt to transfer its profits to its AE since AE made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here is no speaking order of the DRP on the objections of the assessee. In view of the same, we deem it fit and proper to remit the issue to the file of the assessing authority with a direction to refer the matter to the DRP who in turn shall dispose off the assessee s objections judicially and by a speaking order. The DRP shall also take into consideration the judicial precedents on the issue and also order of the Tribunal in ITA No.1231 of 2010 dated 5/8/2011 in the case of M/s Genisys Integrating Systems India Pvt. Ltd., where similar issues have been considered. The copy of the order in the case of M/s Genisys Integrating Systems India Pvt. Ltd., shall be appended to this order. 10. In the result, the appeal of the assessee is allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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