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2013 (2) TMI 710 - AT - Income TaxTransfer pricing adjustment - foreign exchange gain - Held that:- Nothing has been brought on record to suggest that the gain made by the assessee on fluctuation of foreign exchange was not on account of business transactions of the assessee. In absence of any such material, following the afore-mentioned decisions of the Tribunal, it has to be held that the foreign exchange gain of the assessee is to be considered as part and parcel of the profit of the assessee and therefore should be included for the purpose of computing the profit margin of the assessee. Moreover, Ld. TPO has clearly observed that to bring parity of the comparables with the assessee, foreign exchange gain is included as well in the case of comparables and after including such gain of the comparables, he has re-worked the margin of the comparable entities. However, while computing the margin of the assessee, TPO ignored the gain of the assessee on foreign exchange. Therefore, the adjustment computed by the TPO is contrary to his observations. If the gain on foreign exchange is included, then there is no short-fall in the arm length price determined by the TPO. The computation has already been made after including such gain and it has been seen that there is no short-fall in the profits of the assessee as compared to the arm length price profit determined by the TPO. We found that the adjustment made by the TPO and upheld by DRP deserves to be deleted
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