Tribunal grants appeal for statistical purposes, directs Assessing Officer on deduction computation & transfer pricing adjustment

The Tribunal allowed the appeal of the assessee for statistical purposes, emphasizing the need for a judicial disposal of objections by the Dispute Resolution Panel (DRP) and consideration of relevant precedents. The Tribunal directed the Assessing Officer to include expenses from both turnovers for computing the deduction under section 10A and remitted the transfer pricing adjustment issue back to the assessing authority with directions to refer the matter to the DRP for a judicial disposal of objections, considering relevant judicial precedents.

---

---

Issues involved: Appeal against order of Dispute Resolution Panel regarding disallowance of deduction u/s 10A and transfer pricing adjustment.

Deduction u/s 10A:
The assessee contested the disallowance of full deduction u/s 10A for profit and gains from software business by not deducting certain expenses from total turnover. Citing relevant case laws, it was argued that expenses reduced from export turnover should also be reduced from total turnover for computing deduction u/s 10A. The Tribunal directed the Assessing Officer to include expenses from both turnovers for computing the deduction u/s 10A.

Transfer Pricing Adjustment:
The Transfer Pricing Officer (TPO) rejected the cost plus method adopted by the assessee and determined the arms length price using the Transactional Net Margin Method (TNMM). The assessee raised objections regarding the TPO's method, comparables selected, and risk assessment. The Dispute Resolution Panel summarily upheld the TPO's order without providing a speaking order. The Tribunal remitted the issue back to the assessing authority with directions to refer the matter to the DRP for a judicial disposal of the objections, considering relevant judicial precedents.

Conclusion:
The Tribunal allowed the appeal of the assessee for statistical purposes, emphasizing the need for a judicial disposal of objections by the DRP and consideration of relevant precedents.

---