TaxTMI 
TaxTMI 
2020 (8) TMI 758
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.... company engaged in the business of IT and ITES. It filed its return of income on 23.11.2011 declaring an income of Rs. 56,70,544/- and book profit of 36,07,53,645/- u/s 115JB. During the course of assessment proceedings, the AO observed that the assessee has earned interest income of Rs. 76,41,432/- and miscellaneous income of Rs. 44,74,029/-. The assessee has availed deduction u/s 10A/10AA on interest income of Rs. 72,12,856/- and miscellaneous income of Rs. 44,74,029/-. On being asked by the AO to justify the claim of such deduction u/s 10A/10AA, the assesseee submitted that out of the total interest income of Rs. 76,41,432/- an amount of Rs. 4,28,576/- pertained to interest income earned from inter-company loan extended to Parekh Health TPA Private Limited on which the assesseee has not claimed any deduction u/s 10A. However, the balance amount of interest income of Rs. 72,12,856/- pertained to interest earned by the assessee on FDRs placed with banks for temporary period. These funds have been generated from the assessee's businesss of export of information technology and ITES. In view of the commercial prudence the excess cash so generated was temporarily parked in the ban....
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.... assesseee is entitled to deduction u/s 10A on the interest income as well as miscellaneous income. 2.3 However, the AO was not satisfied with the arguments advanced by the assessee. Holding that principles of res judicata do not apply to income-tax proceedings and relying on various decisions, the AO held that the assesseee is not entitled to deduction u/s 10A on the interest income of Rs. 72,12,856/- and miscellaneous income of Rs. 44,07,668/-. The ld. DRP upheld the action of the AO observing that when the interest income of Rs. 72,12,856/- has arisen from the funds arisen from the business operations which was parked in short-term FDs with banks, such interest income does not arise from the business operations eligible for deduction u/s 10A. As there is absence of nexus that is essential for such earnings, the AO was justified in rejecting the claim of deduction u/s 10A. 3. Similarly, the AO's action in rejecting the claim of deduction u/s 10A on the miscellaneous income was also upheld. 4. Aggrieved with such order of the AO/DRP, the assessee is in appeal before the Tribunal by raising the following grounds:- "1. On the facts and circumstances of the case and....
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....0A of the Act. Relying on various decisions placed in the case law compilation, the ld. Counsel for the assessee submitted that the assesseee is entitled to deduction u/s 10A on the interest income and miscellaneous income. He submitted that the Ld. DRP, in assessee's own case for A.Y. 2009-10 has directed the AO to allow the claim of deduction u/s 10A on excess provision written back. Similarly, for A.Y. 2010-11, the AO himself has allowed deduction u/s 10A of excess provision written back in the draft assessment order. He accordingly submitted that the issue stands covered in favour of the assessee by a series of decisions and, therefore, the ground raised by the assessee should be allowed. 6. The ld. DR, on the other hand, strongly supported the order of the AO and the DRP and submitted that such interest income and miscellaneous income do not arise from the business operations eligible for deduction u/s 10A. If the ground raised by the assessee is allowed, then, the very purpose of creating such statutory provisions shall be defeated. Referring to the decision of the Hon'ble High Court in assessee's own case, vide ITA 1180/2017, Civil Miscellaneous Application No.46758 to....
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.... 67. Undisputedly, identical issue has come up before the Tribunal in taxpayer's own case for AY 2010-11 and has been decided in favour of the taxpayer by relying upon the decision rendered by the Hon'ble Delhi High Court in Riviera Home Furnishing vs. Additional CIT- 65 taxmann.com 287 (Delhi). Operative part of the finding returned by Hon'ble Delhi High Court in Riviera Home Furnishing (supra) is reproduced for ready perusal as under :- "9. The question as to what can constitute as profits and gains derived by a 100% EOU from the export of articles and computer software came for consideration before the Karnataka High Court in CIT v. Motorola India Electronics (P.) Ltd. [2014] 46 taxmann.com 167/225 Taxman 11 (Mag.). The said appeal before the Karnataka High Court was by the Revenue challenging an order passed by the ITAT which held that the interest payable on FDRs was part of the profits of the business of the undertaking and therefore includible in the income eligible for deduction Sections 10A and 10B of the Act. There the Assessee had earned interest on the deposits lying in the EEFC account as well as interest earned on inter-corporate loans gi....
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....zed by export of articles." 11. The decision of the Karnataka High Court in Motorola India Electronics (P.) Ltd. (supra) was followed by this Court in its decision in CIT v. Hritnik Exports (P.) Ltd. (decision dated 13th November 2014 in ITA Nos. 219 and 239 of 2014). This Court also referred to its earlier decision dated 1st September 2014 in ITA No. 438 of 2014 (CIT v. XLNC Fashions). While declining to frame a question of law in the Revenue's appeal, this Court inHritnik Exports (P.) Ltd. (supra) quoted with approval the observations of the Special Bench of the ITAT in Maral Overseas Ltd. v. Addl. CIT [2012] 136 ITD 177/20 taxmann.com 346 (Indore) on the interpretation of Section 10B(4) of the Act as under: '79. Thus, sub-section (4) of section 10B stipulated that deduction under that section shall be computed by apportioning the profits of the business of the undertaking in the ratio of turnover to the total turnover. Thus, notwithstanding the fact that sub-section (1) of section 10B refers the profits and gains as are derived by a 100% EOU, yet the manner of determining such eligible profits has been statutorily defined in sub-section (4) of section 1....
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..... in the preceding years, after considering the decision in the case of Liberty India held that provisions of section 10B are different from the provisions of section 80IA wherein no formula has been laid down for computing the eligible business profit.' 12. Recently, in a decision dated 6th October 2015 in ITA NO. 392 of 2015 (Principal CIT v. Universal Precision Screws), this Court had occasion to again consider whether interest earned on fixed deposits kept by an Assessee which was eligible under Section 10B of the Act, as a condition for utilization of letter of credit and bank guarantee limits, would qualify for deduction. That question was decided in favour of the Assessee and against the Revenue. The Court held as under: '9. On the question of interest on the FDRs, the ITAT has referred to Section 10B(4) which states that for the purposes of Section 10B(1), the profits derived from export of articles or things or computer software "shall be the amount which bears to the profits of the business of the undertaking", the same proportion as the export turnover in respect of such articles or things or computer software bears to the total turnover of the ....
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....s", where, in the case of an assessee, any amount of profits and gains of an undertaking or unit or enterprise or eligible business is claimed and allowed as a deduction under any of those provisions for any assessment year, deduction in respect of, and to the extent of, such profits and gains shall not be allowed under any other provisions of this Act for such assessment year and shall in no case exceed the profits and gains of such undertaking or unit or enterprise or eligible business, as the case may be.' 14. Mr. Manchanda's attempt was to show that Section 80A(4), which inter alia stated that any deduction allowable under Section 10B cannot in any case "exceed the profits and gains of such undertaking or unit or enterprise or eligible business, as the case may be" made it clear that a unit seeking deduction under Section 10B would be eligible to do so only insofar as such income was directly attributable to the business of export. Any income that might be merely incidental to the business of the undertaking, not directly related to the activity of export, would not be eligible for such deduction. He also took the Court again through the decision of the Supreme....
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....10B of the Act is a complete code providing the mechanism for computing the 'profits of the business' eligible for deduction u/s 10B of the Act. Once an income forms part of the business of the income of the eligible undertaking of the assessee, the same cannot be excluded from the eligible profits for the purpose of computing deduction u/s 10B of the Act." 16. This then brings us to the questions framed for consideration in the present case and the decision of the ITAT in not accepting the Assessee's plea in regard to 'customer claims' 'freight subsidy' and 'interest on fixed deposit receipts' even while accepted the Assessee's case as regards 'deemed export drawback'. 17. The contention of the Assessee as regards customer claims was that it had received the claim of Rs. 28,27,224 from a customer for cancelling the export order. Later on the cancelled order was completed and goods were exported to another customer. The sum received as claim from the customer was non-severable from the income of the business of the undertaking. The Court fails to appreciate as to how the ITAT could have held that this transaction did....
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....been reversed by the Hon'ble High Court although it has admitted the substantial question of law. Therefore, in absence of any adverse order till now, the decision of the Tribunal shall prevail and, therefore, the ground raised by the assessee has to be allowed. The ground raised by the assessee is accordingly allowed. ITA No.193/Del/2016 (by the Revenue). 11. Facts of the case, in brief, are that the AO referred the matter to the TPO for determination of the ALP of the international transaction entered into by the assessee. The TPO, during the course of TP assessment proceedings, observed that UHG, a Minnesota Corporation incorporated in January, 1977, is a diversified health and well-being company that serves approximately 70 million Americans. During 2010, UHG managed approximately $125 billion in aggregate annual healthcare spending on behalf of the constituencies and consumers and provided access to more than 5,300 hospitals and over 730,000 physicians and healthcare providers. He observed that the assessee during the impugned assessment year has entered into the following international transactions:- Nature of International Transaction Method Amount (I....
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....,65,79,705" 13. Similarly, in the ITES segment, as against seven comparables selected by the tax payer with weighted average OP/TC of 14.02%, the TPO rejected some of the comparables and included some more comparables and finally selected the following nine comparables whose adjusted OP/OC was 24.32% and accordingly proposed adjustment of Rs. 17,32,53,365/- in the ITES, the details of which are as under:- S. No Company Name Adjusted OP/OC (%) i. Accentia Technologies Ltd. 27.73 ii. e4e Healthcare Business Services Pvt Ltd 7.76 iii. Eclerx Services Ltd . 55.07 iv. ICRA Techno Analytics Limited 23.87 v. Infosys B P O Ltd. 17.88 vi. Jindal Intellicom Ltd. 10.88 vii. Microgenetic Systems Ltd. -2.42 viii. TCS E-Serve Ltd. 68.94 ix. Acropetal Technologies Ltd(Seg) 9.19 Average 24.32 13.1 The TPO accordingly computed the ALP of the international transaction related to ITES segment as under:- Total cost : Rs. 1,53,00,87,391 Arm's length price at a margin of 24.32% : Rs. 1,90,22,04,644 Price received : Rs. 1,72,89,51,279 Proposed adjustment u/s 92CA : Rs. 1....
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.... He submitted that the TPO, after considering FAR analysis has selected those comparables and the DRP, without any valid reasons, has excluded those comparables which is not correct. He accordingly submitted that the comparables so selected by the TPO should be included in the final set of comparables. He further submitted that the ld. DRP is also not justified in considering forex income, bank charges and provision for doubtful debts as operating in nature. He accordingly submitted that the order of the AO/TPO be restored. 18. The ld. Counsel for the assessee, on the other hand, strongly supported the order of the DRP. He submitted that the main issue raised in the grounds raised by the Revenue is basically relating to the exclusion of certain comparables by the DRP in the software segment and ITES segment. So far as the deletion of seven comparables from the software segment is concerned, the ld. Counsel for the assessee drew the attention of the Bench to the detailed discussion made by the DRP. So far as E-Infochips Ltd., is concerned, he submitted that this company was rejected by the DRP as comparable for A.Y. 2010-11 in assessee's own case since it is functionally dissi....
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....of comparables on account of holding significant IPR and branded products. Further, in the case of Agilis Information Technology (P) Ltd. (supra) this company was rejected on account of unavailability of segmental data between software services and software products. 23. So far as Wipro Technology Services Ltd. is concerned, he submitted that this company cannot be included in the list of comparables since it failed related party filter by virtue of section 92B(2) of the Act. It earns its entire income from City group companies for which the contractual terms were entered into by its parent company (Wipro Limited) with City Group Inc. Further, insufficient segmental information was given. The company is engaged in providing software services and infrastructure support services. No information is available regarding the nature of business in the annual report. Referring to the decision of the Tribunal in the case of Global Logic India Ltd., vide ITA No.1690/Del/2016 for A.Y. 2011-12 and in the case of Cadence Design System (I) P. Ltd. (supra), he submitted that this company was excluded from the list of comparables for the above reasons. 24. So far as Acropetal Technologies Lt....
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.... P. Ltd. which rejected Infosys BPO Ltd. on account of high brand value. 27. So far as TCS e-Serve Ltd., is concerned, he submitted that the same also has to be excluded in view of the distinctive features due to its sheer size which are not available to the assessee. Further, it has got TCS brand value. It fails the export turnover filter as applied by the AO and there is insufficient segmental information. Further, the ITAT in assessee's own case has rejected this company as a comparable on account of being functionally non-comparable. 28. Referring to the decision of the Tribunal in the case of Cadence Design Systems (I) Ltd., vide ITA No.6315/Del/2015, order dated 02.04.2018 for A.Y. 2011-12, he submitted that the Tribunal in the said decision has discussed thoroughly about the exclusion of E-Infochips Ltd., E-Zest Solutions Ltd., Infosys Ltd., Wipro Technology Services Ltd., Acropetal Technologies Ltd. and has directed the TPO to include the following comparables:- i) CG VAK Software & Exports Ltd., ii) Goldstone Technologies Ltd., iii) Thinksoft Global Services Ltd., iv) Cat Technologies Ltd., v) LGS Global Ltd., vi)....
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....10-11 has directed to exclude the above concerns. He accordingly submitted that the order of the DRP directing to exclude the three comparables from the ITES segment is fully justified and, therefore, no interference is called for. 33. We have considered the rival arguments made by both the sides, perused the orders of the AO/TPO/DRP and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We do not find any infirmity in the order of the DRP in excluding the seven comparables from the software segment and three comparables from the ITES segment. They have thoroughly discussed the comparables before directing to exclude the same. 34. So far as Infosys Technologies Ltd. is concerned, we find the Tribunal in assessee's own case for A.Y. 2009-10 has directed to exclude this comparable by observing as under:- "INFOSYS TECHNOLOGIES LIMITED (INFOSYS) 13. The taxpayer sought exclusion of Infosys on grounds inter alia that it is functionally dissimilar and incurring significant R&D expenses having significant intangibles and a giant company having fully risk bearing profile and relied upon the decision rend....
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....ngible assets, therefore, following the decision of the Tribunal in assessee's own case for the preceding years and the decision in the case of Cadence Design System (I) Pvt. Ltd. (supra), we hold that this company is not a good comparable. Accordingly, we uphold the order of the DRP in excluding this company from the list of comparables. 36. So far as Persistent Systems Ltd. is concerned, we find the Tribunal in assessee's own case has restored the issue to the file of the TPO with certain directions. The relevant operative para of the order of the Tribunal reads as under:- "PERSISTENT SYSTEMS LTD. (PERSISTENT) 18. The taxpayer sought exclusion of Persistent on the grounds inter alia that it is outsourcing its services; that it is also engaged in development of products with no segmental data available; and that it is expending around 1% of its total income of Rs. 56.1 million on R&D activities. Undisputedly, Persistent has not been contested by the taxpayer before ld. TPO as well as ld. DRP. In the given ITA No.419/Del/2014 circumstances, we are of the considered view that if something new is to be examined let it be examined by the ld. TPO first as the taxpa....
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.... HC) and rejected the contention of the assessee basing on the super normal profit so also while relying upon Rampgreen solutions Pvt. Ltd. Vs. Commissioner of Income Tax (2015) 377 ITR 0533 (Delhi) to say that a company cannot be excluded only for the reason of earning high profits. 14. In addition to the reiteration of the contentions raised before the authorities below, learned AR brought it to our notice that in assessee's own case for AY 2009-10 in ITA No.2074/Del/2014, it was found that Infosys Ltd. is not comparable to the assessee. Learned DR placed reliance on the orders of the authorities below and the reason for including this company in the list of comparables. 15. Financials of Infosys lends any amount of support to the argument of the assessee referred to above. Further, vide paragraph No.7 to 7.4 in the order in ITA 2074/Del/2014, a coordinate Bench of this Tribunal considered in assessee's own case for the AY 2009-10 the comparability of Infosys with the assessee in detail, and while placing reliance on the decision of the Hon'ble jurisdictional High Court in CIT vs. Agnity India Technologies P. Ltd. in ITA No.1204/2011 (Del) held that Infosys Ltd ....
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....in the public domain, Wipro Technologies Services Ltd. was incorporated as Citi Technologies Services Ltd., a subsidiary of CitiCorp. Banking Corporation subsequently, though all the shares of the company was purchased by Wipro Ltd., under a long term agreement dated 21.1.2009 Wipro signed a master service agreement with the Citi Group Inc. for a delivery of technology infrastructure services and application development and maintenance service for six years providing delivery of at least $500 million in service revenue over this period. This fact cannot be ignored. Nextly, he submitted that though the learned DR argued that the Mumbai Tribunal in Ness Technologies (supra) has not properly followed the decision in Saxo (supra) which relates to earlier years, it cannot be denied that for AY 2011-12 the Delhi Tribunal in Orange Business Service Solutions, under very similar circumstances found that Wipro Technologies Services is not a good comparable inasmuch as this company is a subsidiary to Wipro Ltd. and the entire revenue during the year is covered by a master service agreement entered into by break through with Citi Group services. 22. We have gone through the material ....
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.... is in software development, passed the employee cost filter, there is no evidence of increase in margin profit on account of creation of incubation business unit, as per website the company started as engineering design services and expanded its foray of services to add software service capabilities and as per page 53 of annual report, segment wise breakup of the revenue is also available. For these reasons, ld. DRP recorded that it is a good comparable. 27. Ld. AR brought to our notice that the salaries and consultancy charges including bonus incurred by Acropetal was Rs. 13.51 crores whereas the technical sub contract expense was Rs. 55.77 crores which accounts for only 13.74% and accordingly it does not pass through the filter proposed by the ld. TPO. 28. Ld. DR justified the orders of the authorities below basing on the observations of the ld. TPO and considered by the learned DRP to the effect that it is only a matter of difference in classification of expense and the financials of subsequent years ratify the same 29. Per contra, ld. AR submitted that when the matter relates to the FY 2010- 11 and the annual report is available in the public domain,....
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....cision in Mumbai Tribunal in Ness Technologies (supra). 34. Ld. DR submitted that as could be seen from the scheduled income at page no.144 of the annual report paper book revenue from software development, hardware maintenance and information technology consultancy are part of the information technology services and it accounts for 86% of the revenue. He further submitted that even the assessee is having income from software development and ITES services. He submitted that for all practical purposes this company has only one segment that is software development and the revenue from this is about 86%, satisfying the filter. 35. We have gone through the annual report of this company for FY 2010-11 and found that the revenue from software development was 19, 21, 09, 661/-, revenue from hardware maintenance was Rs. 3,92,48,562/-and revenue from information technology consultancy was Rs. 2,90,26,028/-. Ld. DR asks as to club all these items of revenue under the head revenue from information technology services. We find it difficult to accept this plea of the Ld. DR and to hold that the information technology consultancy service also falls under the head software devel....
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....of comparables." 38. For similar reasons stated above we are of the considered opinion that insofar as the assessee is a captive software development service provider, M/s M/s.E-Infochips Limited is not a good comparable and while upholding the stand of the assessee, we direct the library ever to delete this from the list of comparables. E-Zest Solutions Ltd. 39. Assessee objected the inclusion of this company in the set of comparables mainly on the ground that this company is engaged into diversified range of software activities and its annual report shows that this company is an SEICMMi level III and ISO 9001:2008 certified product engineering and software development company, having special expertise in emerging technologies such as cloud, SAAS, business intelligence and mobility, and predicate it has been serving clients in more than eight industries across the globe with over 2000 software professionals on-board. The product engineering services/outsourced product development services of this company include the product design and development, product feature enhancement, product platform migration, software product testing, product maintenance and s....
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....usiness model of these two companies is different. 44. The comparability of this company this company with the captive software development service provider like the taxpayer in this case has been considered by a coordinate bench of this tribunal in relation to the assessment year 2011-12, in detail in the case of M/s Symantic software and services India private limited versus DCIT, in ITA No. 614/Del/2016 and the observations of the Tribunal are very much relevant for the purpose of this case also. While paragraph number 8 a coordinate bench of this tribunal held as follows:- 8. We heard the rival submissions, perused the material on record and judicial decisions. The comparables company is engaged in product engineering services in the nature of High end knowledge process outsourcing and also in product engineering software Development Company having expertise in emerging technologies cloud Saas, Business Intelligence and mobility for more than 10 years and serving 8 industries across the globe with over 200 software professionals. Whereas, the assessee company is in the software development and also ITES services and cannot be considered as the functionally com....
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....ables by the TPO. 14.4 We have heard the rival submissions and perused and carefully considered the material on record. It is seen from the record that the TPO has included this company in the list of comparbales only on the basis of the statement made by the company in its reply to the notice under section 133(6) of the Act. It appears that the TPO has not examined the services rendered by the company to give a finding whether the services performed by this company are similar to the software development services performed by the assessee. From the details on record, we find that while the assessee is into software development services, this company i.e. e-Zest Solutions Ltd., is rendering product development services and high end technical services which come under the category of KPO services. It has been held by the coordinate bench of this Tribunal in the case of Capital I-Q Information Systems (India) (P) Ltd. Supra) that KPO services are not comparable to software development services and are therefore not comparable. Following the aforesaid decision of the co-ordinate bench of the Hyderabad Tribunal in the aforesaid case, we hold that this company, i.e. e-....
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....P filed by the Revenue has been dismissed by the Hon'ble Supreme Court, vide order dated 19.05.2020 in SLP No.5066/2020. Under these circumstances, we do not find any infirmity in the order of the DRP excluding the above comparables. 40. So far as Sasken Communication Technologies Ltd., is concerned, we find the coordinate Bench of the Tribunal in the case of Agilis Information Technologies India Pvt. Ltd. (supra) has directed to exclude this company from the list of comparables by observing as under:- "4.10 Sasken Communication Technologies Ltd. The Ld. AR submitted that as regards this company there is non-availability of data wise information of segments with respect to software development services in the annual report. The Ld. AR relied upon the case of Saxo India Pvt. Ltd Vs. ACIT (ITA No. 6148/del/2015) whereby Tribunal directed to exclude the aforesaid company on account of unavailability of segmental data with respect to software development segment, as under:- "15.2 Considering the rival submissions, we find from page 58 of the TPO's order that he has recognized sale of software products to the tune of Rs. 37 crore and odd. Though the break-u....
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....f the Tribunal, we do not find any infirmity in the order of the DRP in excluding this comparable from the list of comparables. 42. So far as deletion of certain comparables from the ITES segment is concerned, here also, we do not find any infirmity in the order of the DRP in directing to exclude the three comparables. So far as E-Clerx Services, we find the coordinate Bench of the Tribunal in assessee's own case for A.Y. 2008-09, vide ITA No.825/Del/2014 and ITA No.419/Del/2014 by the Revenue, order dated 09.02.2018, has thoroughly discussed the issue and has directed to exclude this company from the list of comparables by observing as under:- "E-CLERX SERVICES (E-CLERX) 47. The taxpayer sought to exclude E-Clerx for benchmarking its international transaction on the grounds inter alia that it is functionally dis-similar; that it has only one segment and has ordered to be excluded in taxpayer's own case for AY 2008-09 and also relied upon Ameriprise India Pvt. Ltd. vs. ACIT in ITA No.2010/Del/2014 for AY 2009-10, Capital IQ Information Systems vs. ACIT in ITA No.124/Hyd/2014 for AY 2009-10 and Macquarie Global Services Pvt. Ltd. vs. DCIT in ITA No.6803/Del/....
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....om the list of comparables. 44. So far as Infosys BPO and TCS e-Serve are concerned, we find the Tribunal in assessee's own case for the immediately preceding assessment year, has directed the TPO to exclude TCS e-Serve from the list of comparables whereas the issue relating to Infosys BPO was restored to the file of the TPO with certain directions. 45. So far as exclusion of TCS e-Serve is concerned, we find the Tribunal, in assessee's own case, vide ITA No.1038/Del/2015, order dated 26.08.2016 for A.Y. 2010-11, while directing the TPO to exclude this company from the list of comparables has observed as under:- "24. TCS E Serve. Limited TPO included this comparable, which has a margin of 63.42%. The Id DRP has also held that the far profile of the company is similar. Before us, Id. AR submitted that the company is dissimilar functionally. In addition to BPO services, it is also engaged in technical services such as software testing, verification and validation. It has also developed software such as transport management software. It does not have segmental reporting too. It was further submitted that the company owns substantial intangible assets in form of....
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....ed annual accounts of comparable company submitted before us at page No.207 onwards of the paper book. This company is subsidiary of Infosys technologies Ltd and it is ranked amongst top 10 3rd party BPO companies in India. During the year this company has acquired for a total consideration, of Rs. 173 crores and a contingent consideration of Rs. 67 crores , membership interest in purchase agreement to acquire all the outstanding membership interest of Macchims system LLC. Accordingly this is a new addition of the subsidiaries of the comparable. Further on perusal of the balance sheet of the company which is placed at page No, 207 of the paper book we find that it is not a consolidated annual accounts but standalone annual accounts of comparable. Therefore in the financial results of the Infosys BPO Ltd there is no impact of the amalgamation or acquisition of shares of the other companies. A separate statement as required under section 212 of the Companies Act has been annexed with the annual accounts. Though assessee has contested in this year about the exclusion of the above company as comparable however we have perused decision of coordinate bench in ITA No. 6312/del/2012 for as....
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.... part of the operational revenue/expenses. We find identical issue had come up before the Tribunal in assessee's own case during A.Y. 2009-10 and the Tribunal, vide ITA No.825/Del/2014 filed by the assessee and ITA No.419/Del/2015 filed by the Revenue , order dated 9th February, 2018, has decided the issue by observing as under:- "58. Undisputedly, the Revenue has not treated foreign exchange gain/loss as non-operating item while operating arm's length price ITA No.419/Del/2014 of international transaction of the taxpayer in AYs 2008-09 and 2010-11. 59. Hon'ble High Court of Delhi in case cited as Pr. CIT-02 VS. M/s. Cashedge India Pvt. Ltd. in ITA 279/2016 order dated 04.05.2016 while upholding the decision rendered by the Tribunal held that Safe Harbour Rule is not applicable to AY 2008-09 as it came into force w.e.f. 18.09.2013 since the ld. DRP has primarily relied upon Safe Harbour Rule while upholding the decision of ld. DRP in treating the foreign exchange fluctuation gain/loss as non- operating item, the findings are not sustainable. 60. The coordinate Bench of the Tribunal decided the identical issue in case of Westfalia Separator India P....