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2014 (12) TMI 337 - ITAT HYDERABADDetermination of ALP – Selection of Comparables - Maple eSolutions Limited - Nucleus Net Soft & GIS (India) Ltd. - Loss making comparables rejected – Violation of OECD guidelines or not – Held that:- In Stream International Services (P.) Ltd. Versus Assistant Director of Income-tax (International Taxation) - 7(2), Mumbai [2013 (9) TMI 339 - ITAT MUMBAI] it has been held that Maple eSolutions Limited has to be excluded from the list of comparables – also, in M/s. HSBC Electronic Data Processing India Ltd. Versus Dy. Commissioner of Income-tax Circle 2(2), Hyderabad [2013 (9) TMI 485 - ITAT HYDERABAD] it has been held that as against ₹ 24.02 lakhs of employee cost for the year ending 31st March, 2005, employee cost increased to ₹ 132.54 lakhs - also the data processing charges to the extent of ₹ 1.04 crores has increased which indicates that the assessee is outsourcing the work - due to amalgamation during the year the assessee's business model has changed - For all the three reasons, employee cost filter, outsourcing and amalgamation, and Nucleus Net Soft & GIS (India) Ltd. cannot be selected as comparable – thus, the TPO should verify the financials of the company and there after decide the issue taking into account the ratio of the decision on the issue – thus, the matter is remitted back to the TPO for decision – Decided partly in favour of assessee.
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