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2016 (2) TMI 1163 - ITAT BANGALORE
Transfer pricing addition - comparable selection criteria - functional similarity - Held that:-
The business of the assessee is engaged in providing software development and Information Technology Enabled Services (ITES) to its Associate Enterprise on a cost plus basis. Thus the assessee is providing services in two segments i.e. software development services and ITES, thus companies functionally dissimilar with that of assessee need to be deselected from final list.
Since we have directed the TPO to exclude some of the companies from the list of comparables as well as restored some of the companies to the list of comparables which were excluded by the CIT (Appeals), therefore, the TPO/A.O. is directed to recompute the ALP after exclusion and inclusion of the comparable companies as directed above. Needless to say the benefit of tolerance range of +/- 5% as per the proviso to section 92C be considered.