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2018 (7) TMI 472
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....2010 for AY 2006-07. 2. The appellants - Revenue have suggested five substantial questions of law which are quoted below for ready reference: - "(1) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in directing the assessing officer to exclude the expenditure in foreign currency from the export turnover and the total turnover when there is no provision in section 10A which requires the said expenses to be reduced from the total turnover also? (2) Whether the Tribunal was right in fact and in law in seeking exact comparability, while searching for comparable companies of the assessee under TNMM whereas the requirement of law and international jurisprudence require seeking similar comp....
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....s covered by the Division Bench decision of this Court in the case of M/s.Tata Elxsi Ltd., Vs. Asst. Commissioner of Income Tax, decided on 20/10/2015 (2015) 127 DTR 0327 (Kar), which has been affirmed by the Hon'ble Supreme Court in the case of Commissioner of Income-tax, Central - III vs. HCL Technologies Ltd., [2018] 93 Taxmann.com 33(SC). The relevant portion of the judgment of this Court in the case of M/s.Tata Elxsi (supra), is quoted below for ready reference:- "20. From the aforesaid provisions, it is clear that if a assessee wants to claim the benefit of Section 10A, firstly he must export articles or things or computer software. Secondly, the said export may be done directly by him or through other expor....
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....hat to be eligible for exemption from payment of income tax, export should earn foreign exchange. It does not mean that the undertaking should personally export goods manufactured / software developed by it outside the country. It may export out of India by itself or export out of India through any other STP Unit. Once the goods manufactured by the assessee is shown to have been exported out of India either by the assessee or by another STP Unit and foreign exchange is directly attributable to such export, then Section 10A of the Act is attracted and such exporter is entitled to benefit of deduction of such profits and gains derived from such export from payment of income tax. Therefore, the finding of the authorities that the assessee has ....
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....id ordinary meaning is to be in conformity with the context in which it is used. Hence, what is excluded from 'export turnover' must also be excluded from 'total turnover', since one of the components of 'total turnover' is export turnover. Any other interpretation would run counter to the legislative intent and would be impermissible. 18. XXXXXX 19. In the instant case, 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 in....
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....ed supra for the assessment year under consideration, therefore in view of the finding of the coordinate Bench of this Tribunal, we direct the AO/TPO to exclude 4 companies from the list of comparables for determination of ALP and re-examine the comparability of Flextronics Software Ltd. in light of the directions given by the coordinate Bench. 25 to 29 ... ... ... 30. We find from the profit & loss account of this company that there is work-in-progress during the year under consideration as well as in the earlier year, therefore it supports the finding given by the Tribunal that this company is in the software product and in the absence of segmental d....
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....h substantial questions of law could be raised before the High Court under Section 260-A of the Act, the Courts could have embarked upon such exercise of framing and answering such substantial question of law. On the other hand, 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....