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2013 (11) TMI 1413 - ITAT DELHISelection of comparables – Held that:- The event management division of Saket Projects Limited was taken as comparable - The event management was done by sponsorships in the case of assessee which is evident form various documents placed - Further the segment allocation of expenses also appears to be not reliable - In the case of Saket Projects Ltd. there is functional dissimilarity - When direct comparables are available then segmental results of companies engaged in other business should not be taken as comparable – Decided in favour of assessee. Non-operating income – Held that:- While computing operating margin under TNMM non-operating income is not to be considered – The TPO is directed to exclude miscellaneous income of ICRA Mannagement Consultancy Services – The nature of such miscellaneous income could not be defined with the documents available – The issue was restored for fresh decision. Overstated profit of comparable – Held that:- On perusal of the Audit Report of the comparable company - There was an abnormality in the accounts of comparable Education Consultant (P) Ltd. overstating the profit to the tune of ₹ 2.72 crores – This abnormal profit needs to be adjusted while working out the OP/TC in this account of comparables – The issue was restored for fresh decision. Foreign exchange difference – Held that:- The issue was no more res integra – Following ITAT, Bangalore Bench in the case of SAP Labs India (P) Ltd. vs. ACIT [2010 (8) TMI 676 - ITAT, BANGALORE] - The foreign exchange gain is an integral part of the sale proceeds of an assessee carrying on an export business - This income should not be excluded from the computation of the operating margin of the assessee company – Decided in favour of assessee. Risk profile and working capital adjustment – Held that:- No risk adjustment can be allowed when the same has not been quantified - The assessee has failed to bring any evidence on record to show that there was any difference in risk profile of comparable companies – If difference in the risk results into deflation and inflation of the financial results of comparables adjustment can be made on this fact - The assessee has also failed to establish any working capital difference – Decided against assessee. Arms length Range – Held that:- As per amendment inserted by the Finance Act, 2012 retrospectively - Benefit of +/- 5% under the Proviso to section 92C(2) of the Act shall not be allowed for the purpose of computation of arm’s length price – Decided against assessee. Depreciation on computer peripherals – Held that:- Following Commissioner of Income Tax vs. BSES Yamuna Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT] - Computer accessories and peripherals such as, printers, scanners and server etc. form an integral part of the computer system - The computer accessories and peripherals cannot be used without the computer - Depreciation @ 60% on such items shall be allowed – Decided in favour of assessee. Professional consultancy fee – Held that:- The DRP has directed the Assessing Officer to verify the claim of the assessee and allow deduction if the TDS has been deducted - The direction of the DRP is upheld – Decided against assessee.
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