Ld. CIT(A) excludes comparables like size and turnover & RPT for treating a company as a comparable

This judgement concerns appeals by both the revenue and the assessee regarding the computation of deduction under Section 10A of the Income Tax Act. The core issue revolves around whether certain expenses incurred in foreign currency should be excluded from export turnover. The Tribunal noted that an identical issue for a subsequent assessment year was restored to the CIT(A)'s file. The assessee had argued for the application of a turnover filter, which the CIT(A) accepted, relying on a previous Tribunal decision.

BEFORE SHRI B. R. BASKARAN, ACCOUNTANT MEMBER
AND
SMT. BEENA PILLAI, JUDICIAL MEMBER
IT(TP)A No.1565/Bang/2013
Assessment Year: 2008-09

M/s. Robert Bosch Engineering
& Business Solution Ltd.
No.123, Industrial Layout
Koramangala
Hosur Road
Bangalore 560 095.
PAN NO : AAACR7108R

vs

Deputy Commissioner of
Income-tax (LTU)
Bangalore

IT(TP)A No.1575/Bang/2013
Assessment Year: 2008-09

Deputy Commissioner of
Income-tax (LTU)
Bangalore

vs

M/s. Robert Bosch
Engineering & Business
Solution Ltd.
No.123, Industrial Layout
Koramangala
Hosur Road
Bangalore 560 095.

Appellant by : Shri Percy Pardiwala, Sr. A.R.
Respondent by : Ms. Neera Malhotra, D.R.
Date of Hearing : 06.07.2021
Date of Pronouncement : 01.09.2021

O R D E R

The assessee is engaged in business of development of software, dealing in automotive components, mechanical and electronic designs, translations etc.

2. The first and second ground relate to deduction claimed u/s 10A of the Act. In the first ground, the revenue is assailing the decision of Ld CIT(A) in directing AO not to exclude expenditure incurred in foreign currency of Rs.111,35,86,857/- from export turnover while computing deduction u/s 10A of the Act. The second ground relate to the direction of Ld CIT(A) to the AO to reduce expenses incurred towards telecom charges and expenditure incurred in foreign currency from both export turnover and total turnover while computing deduction u/s 10A of the Act.

3. We notice that an identical issue has been restored to the file of Ld CIT(A) by the co-ordinate bench in the assessee’s own case in AY 2009-10 in ITA No.1688/Bang/2017 order dated 28-06-2021. For the sake of convenience, we extract below the discussions made by the co-ordinate bench in Assessment Year 2009-10.

4. Before Ld CIT(A), the assessee insisted for application of turnover filter. In this regard, the assessee placed its reliance on the decision rendered by the Tribunal in the case of Genisys Integrated System (India) P Ltd vs. DCIT (ITA No.1231/Bang/2010). The Ld CIT(A) accepted this contention of the assessee.

5. In the result, the appeal of the assessee as well as the appeal of the revenue are partly allowed.
Order pronounced in the open court on 1st Sept, 2021.

Please find attached the enclosed file for the full judgement