PR.COMMISSIONER OF INCOME TAX-6 vs. NEC TECHNOLOGIES INDIA LTD

The Commissioner impugns the order of the Income Tax Appellate Tribunal [‘ITAT’] dated 27 October 2017 and has proposed the following questions for our consideration:- “(i) Whether on the facts and circumstances of the case, the Tribunal is legally justified in deleting the disallowance of Rs.12,11,000/- under Section 10A of the Act on account of unbilled revenue without considering the fact that such unbilled revenue pertained to the immediately succeeding Assessment Year for which deduction under section 10A of the Act was not available. ii) Whether the Tribunal erred in law and on facts in rejecting the comparables selected by the Assessee itself as a comparable in its own Transfer Pricing Report. iii) Whether on the facts and circumstances of the case, the Tribunal was correct in rejecting Infosys Ltd as a comparable by placing reliance on the decision of this Hon'ble Court in the case of the CIT v. Agnity India Technologies Pvt. Ltd.; [2013] 262 CTR This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/03/2024 at 11:20:12

Insofar as the issue of comparables is concerned, upon going through the findings which came to be returned by the ITAT, we find that the same raises no substantial question of law. Similarly, while dealing with the Section 10A of the Income Tax Act, 1961 [‘Act’] question, the ITAT has observed as follows:- “39. Section 10A(4) is categoric enough to explain that "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 business carried on by the undertaking." This issue has been decided by the coordinate Bench of the Tribunal in Sonata Software (supra) in favour of the assessee.

The assessee has also proved before AO the date on which the invoices relating to such unbilled revenue is raised as well as date of realization of such invoices and this fact is not disputed by the AO and is otherwise in accordance with the Accounting Standard- 09. Moreover when assessee has produced relevant' documents viz. copies of FIRC before the AO to prove the fact that the export This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 12/03/2024 at 11:20:12