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2015 (11) TMI 1651 - AT - Income TaxTPA - comparable - Held that:- The assessee is a. company providing nondevelopment software services, in the nature of conversion of data from hard copy or files into electronic format. The assessee is not providing any software development services to its AE. Thus companies functionally dissimilar with that of assessee need to be excluded from final list of comarables. Forex gain/ loss treatment - Held that:- DRP wrongly invoked Safe Harbour Rule for coming to the conclusion that forex gain/ loss was not to be treated as operating income/ loss for current assessment year because the Safe Harbour Rules, in any case, were applicable from 18-9-2013 and prior to that the said Rules could not be applied. That apart, it is not disputed that in the case of assessee forex gain/ loss was related to sale price of export, which was in US dollar. Therefore, the entire receipts were on revenue account. This issue is squarely covered by the decision of the Hon’ble Supreme Court in the case of Woodward Governor’s (supra), wherein it has been held that forex gain/ loss in the revenue account is a trading receipt, or, as the case may be, business expenditure, allowable u/s 37(1) of the Act. We, accordingly, direct that the forex gain/ loss be treated as operating income/ loss both in the case of tested party as well as comparable and the PLI should be determined accordingly. TP adjustment towards interest not realized from its AE on the debts arising during the course of business - Held that:- Interest has to be determined as per US currency and not as per the prime lending rate, as applied by TPO. Under such circumstance, we set aside the impugned order and remit the matter to the file of TPO for fresh determination on account of TP adjustment towards interest not realized from its AE on the debts arising during the course of business.
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