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No infirmity in DRP’s direction to AO that Forex gain should be considered part of operating income

June 29, 2020[2020] 117 294 (Bangalore - Trib.)

TRANSFER PRICING : Where company selected was mainly engaged in providing high-end services involving specialised knowledge and domain expertise while assessee was a low end service provider, selected company was to be excluded from list of comparables

TRANSFER PRICING : Where company selected was engaged in development of computer software and so nature of engineering design services provided by this company was in form of development of computer software which was in nature of high end services while assessee was providing low end ITES services, selected company could not be considered to be a good comparable

TRANSFER PRICING : Where DRP, following decision rendered by Co-ordinate Bench, directed AO that foreign exchange gain should be considered as part of operating income, there was no infirmity in direction given by DRP

TRANSFER PRICING : Where DRP applied export filter on all comparable companies and since one of comparable companies selected by TPO failed this filter, DRP directed for exclusion of same, action of DRP would not amount to setting aside draft order

INCOME TAX : Where DRP had followed binding decision rendered by jurisdictional High Court in giving direction to AO to exclude telecommunication and foreign travel expenses both from Export turnover and Total turnover while computing deduction under section 10A/10AA, there would be no reason to interfere with said direction

INCOME TAX : Where assessee voluntarily made transfer pricing adjustment and added same to total income while filing return of income and claimed deduction under section 10AA on profits of business arrived at after inclusion of abovesaid amount, assessee would be eligible for deduction under section 10AA in respect of voluntary Transfer Pricing adjustment made by it
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