Section 10A, 92, 92B, 92C of Income Tax Act, 1961—Transfer Pricing—The assessee challenged the action of CIT(A).CIT(A) held that the assessee earned more than ordinary profit in the eligible business in respect of Software Design Engineering Services for both the A.Ys. 2003-04 and 2005-06 and the deduction u/s. 10A should be restricted to the ordinary profit earned by the comparable companies. The contention of assessee was that the AO did not make any addition in terms of sub-section (7) of section 10A of the Act and enhancement proposed by the CIT(A) is not warranted u/s. 251(2) of the Act. The case of CIT (A) was that the deduction u/s. 10A is to be restricted to the extent of ordinary profit earned by the assessee be that of comparable companies by invoking the provisions of sub-section (7) of section 10A of the Act.
 Tribunal conclude that, the Assessing Officer has not proved that any arrangement had been arrived between the parties which resulted in higher profits. Consequently, the re-working of the profits by Assessing Officer by invoking section 10A r.w.s. 80- IA(10) of the Act is not justified. The action of the Assessing Officer to restrict the deduction u/s 10A of the Act was hereby set-aside. Thus, assessee succeeds on this aspect.
The Revenue challenged the action of CIT(A) in deleting the addition made on account of prior period expense.The  DR did not bring on record any evidence regarding disallowability of addition against the findings of CIT(A).