Deputy Commissioner of Incometax, Circle 12(4), Bangalore. ... Respondent AND IT(TP)A No.61/Bang/2015 (Assessment year: 200910) Deputy Commissioner of Incometax, Circle 5(1)(1), Bangalore. ... Appellant Vs. M/s.Rambus Chip Technologies (India) Pvt. Ltd. Bangalore. ... Respondent Assessee by: Shri G.C.Srivastava, Advocate. Revenue by: Dr.P.K.Srihari, Addl.CIT(DR). Date of hearing : 21/05/2015 Date of pronouncement: 22/07/2015 IT(TP)A Nos.23 & 61/Bang/20115 M/s.Rambus Chit Technologies (India) Pvt. Ltd. Page 2 of 38 O R D E R Per Smt. P. MADHAVI DEVI, JM: These are cross appeals by the assessee as well as the revenue against the order of the CIT(A)IV, Bangalore dt.10/11/2014 for the assessment year 200910. 2. Brief facts of the case are that the assesseecompany which is engaged in the business of rendering software development services, filed its original return of income on 25/09/2009 declaring a total income of Rs.92,520/. Subsequently revised return of income was filed on 2/8/2010 declaring a total income of Rs.83,253/ after claiming deduction u/s 10A of the Incometax Act, 1961 [hereinafter referred to as 'the Act' in short] of Rs.5,21,48,541/. The assessee also declared income under MAT provisions of sec.115JB at Rs.2,20,24,606/. During the assessment proceedings u/s 143(3) of the Act, the Assessing Officer (AO) observed that the assessee had entered into an international transaction with its Associated Enterprises (AE) for rendering software development services. The determination of the arms' length price (ALP) of the international transaction was referred to the Transfer Pricing Officer (TPO) u/s 92CA of the Act and on receipt of the order from the TPO, the AO proposed the draft assessment order proposing to make an addition of Rs.2,79,48,656/ u/s 92CA of the Act. The draft assessment order was forwarded to the assessee IT(TP)A Nos.23 & 61/Bang/20115 M/s.Rambus Chit Technologies (India) Pvt. Ltd. Page 3 of 38 company in response to which assessee expressed its willingness to file an appeal before the CIT(A) and requested the AO to pass final order. The AO therefore, passed final assessment order making addition of the adjustment u/s 92CA of the Act as proposed by the TPO and also making the following disallowances: i. Salary expenses of Mr.Prakash Bare, an expatriate employee on whose behalf incometax of Rs.14,85,677/ was paid by the assessee and claimed as an expenditure. ii. Reimbursement of Rs.9,37,988/ to M/s.Rambus Incorporation on account of 'Oracle license' for failure of nondeduction of tax at source though it was in the nature of fees for technical services. iii. Telecommunication expenses of Rs.37,66,683/; insurance of Rs.2,14,056/ which are attributable to the delivery of software outside India; and expenditure of Rs.28,18,006/ incurred towards travelling and conveyance holding it to be for providing technical services outside India while computing deduction u/s 10A of the Act. iv. In addition to the above disallowances, depreciation at the rate of 25% only was allowed on Circuit Test Boards. 3. Aggrieved by these disallowances and the consequential additions, assessee preferred an appeal before the CIT(A) who partly allowed the same. Against denial of relief to the assessee, IT(TP)A Nos.23 & 61/Bang/20115 M/s.Rambus Chit Technol