N.K. Saini, Accountant Member - This appeal by the assessee is against the order dated 06.10.2010 of the Assessing Officer passed u/s. 143(3) r.w. sec. 144C of the Income-tax Act, 1961 [hereinafter referred to as "the Act" in short"].

2. Following grounds have been raised in this appeal:

"Ground No. 1:

Treatment of Communication Expenses under section 10A: The learned Assessing Officer (hereinafter referred to as "AC") has grossly erred in law by not deducting the Communication Expenses amounting to Rs. 19,60,808/- from the 'Total Turnover' while reducing the same from 'Export Turnover' for the purposes of computing deduction under section 10A, thereby reducing the claim of deduction under section 10A by Rs. 1,46,131/- and the Hon'ble Dispute Resolution Panel (hereinafter referred to as "DRP") has erred in confirming the same.

Ground No. 2:

Re-computation of Arm's Length Price which has resulted in an addition of Rs. 98,20,024/-. Under this ground of appeal we have the following specific grounds of appeals:

a. The learned AC has erred in making a reference without recording any reasons based on which he reached the conclusion that it was 'expedient and necessary' to refer the matter to the Transfer Pricing Officer ("TPO") for computation of the arm's length price, as is required under section 92CA(1) and Hon'ble DRP has erred in upholding the same.

b. The learned TPO has erred on facts and law by rejecting the transfer pricing (TP) documentation maintained by the Appellant as per Rules and Hon'ble DRP has erred in upholding the same.

c. The learned TPO has erred on law by undertaking the fresh search for comparability analysis (FY 2005-06) as on December 03, 2008, which is beyond the date of compliance i.e. October 31, 2006 resulting in 'impossibility of performance' and against the premise of maintenance of 'contemporaneous documentation'. The same is also violates the law, Rule 10B(4) read with Read 10D(4) and Hon'ble DRP has erred in upholding the same.

d. The learned TPO has erred on facts by disregarding the functional and risk profile of the Appellant and comparing it with companies which have an entirely different functional and risk profile and Hon'ble DRP has erred in upholding the same.

e. The learned TPO has erred on facts by rejection of the filters applied by the Appellant in search for comparables, particularly the 'turnover filter' and Hon'ble DRP has erred in upholding the same.

f. The learned TPO has erred on law and facts by arbitrary adoption of the additional filters in the search process carried out by him, particularly the 'employee cost filter' and Hon'ble DRP has erred in upholding the same.

g. The Hon'ble DRP has grossly erred on facts and law by implicitly accepting the comparables having abnormal / super profits selected by the learned TPO.

h. The learned TPO has erred on facts and law by exercising his powers under section 133(6) to obtain selective information which was not available in the public domain and by relying on the same for comparability purposes, this being against the principals of natural justice and contrary to the OCED guidelines that advocate against the use of secret comparables and Hon'ble DRP has erred in upholding the same.

i. The learned TPO has erred on law by using single year data for computation of margin of comparable companies by rejecting the multiple year data used by the Appellant and Hon'ble DRP has erred in upholding the same.

j. The learned TPO has erred on facts by wrong computation of NCP, related party transactions and arithmetical errors even though the same was been bought to the notice of learned TPO.

k. The learned TPO has erred on facts and law by comparing the Appellant which is in the second year of operation with the established companies on the one hand and has not excluded the start up related cost of Rs. 91.31 lakhs incurred by the Appellant from the operating cost while computing the NCP of the Appellant even though the same was excluded by the learn