2018 (4) TMI 1722

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.... 1. On the facts and circumstances of the case and in law, the Ld. CIT (A) has erred in allowing the claim of deduction u/s. 10A amounting to Rs. 4,32,49,245/-. 2. On the facts and circumstances of the case and in law, the Ld. CIT (A) has failed to appreciate the fact that the amount of RP adjustment of Rs. 10,75,80,929/- is not the sale proceed of any export. 3. The appellant craves leave, to add, alter or amend any ground of appeal raised above at the time of the hearing. 3. The brief facts of the case are that the assessee filed its return of income on 30.9.2009 for the AY 2009-10 declaring income Rs. 2,90,47,940/-. The case of the assessee was selected for scrutiny and notice u/s. 143(2) of the Income Tax Act, 1....

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....not claimed any deduction u/s. 10A in respect of the above mentioned Transfer Pricing adjustment. AO noted that as per section 92C sub- section 4, it is clearly given that where no deduction u/s. 10A or section 10AA or section 10B or under Chapter VI-A shall be allowed in respect of the amount of income which the total income of the assessee is enhanced after computation of the income under this sub section. The above mentioned Transfer Pricing adjustment is done by the assessee in order to compute Arm's Length Price. AO further noted that the above adjustment was not recorded in the financial statement/Profit & Loss account of the assessee. The assessee has also not considered the above mentioned adjustment while computing book profit ....

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....deduction u/s. 10A of the Act. However, there is no direct nexus between the export business of the assessee and Transfer Pricing adjustment. Moreover, the amount of adjustment as worked out by the assessee itself has not been routed through Profit & Loss account and not forming part of the book profit of the assessee. The assessee also could not explain as to why the above adjustment has not been considered for calculating Book Profit for Minimum Alternative Tax u/s. 115JB. From the above discussion, it is established that the assessee, by no means, is eligible for deduction u/s. 10A against the amount of adjustment on account of Transfer Pricing which has been carried out of the financial statement of the assessee and taken directly to th....

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....olutions Ltd. [2013] 31 taxmann.com 88/216 Taxman 11 (Mag.)/354 ITR 1 the claim for deduction u/s. 10A of the Act in respect of suo-moto TP adjustment made by the assessee, was allowed. 6. We have heard both the parties and perused the relevant records, especially the impugned order. We find that the assessee has clarified that (i) it does not have any business other than the unit which is eligible for exemption u/s. 10A, (ii) the voluntary TP adjustment has been made in respect of international transaction involving export of engineering design services and (iii) the voluntary TP adjustment has been made through a disclosure in Form 3CEB and is not an ad-hoc addition in the income tax return. The assessee has excluded voluntary TP adjus....