2017 (11) TMI 644

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....or appellant. Respondent Through: None. S. RAVINDRA BHAT, J. (ORAL) 1. The question urged by the Revenue, in its appeal under Section 260A of the Income Tax Act, 1961 (hereafter referred to as "the Act"), is with respect to the allocation key (the expenses towards manpower employed). 2. The assessee is a software development firm which was engaged inter alia in international transactio....

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....efore, the allocation key, namely the man power employed, is most acceptable way of allocating expenses. Other expenses like depreciation and overheads were allocated based on turnover, travelling expenses were allocated on the actual basis. These allocation keys are not arbitrary and therefore cannot be rejected. The alternative allocation key, namely, man hours invested, suggested by the AR duri....

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....the financial data for the year 2002-03 instead of for the financial year 2003-04. He has not given any reason for not taking the contemporary data as per Rule 10B(4) of the Income Tax Rules, 1962. There are various judgments in support of taking the current year data. The position of law is well settled by the following decisions of the Hon'ble ITAT: 1. Aztec Software and Technology Services L....