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2018 (2) TMI 1890 - ITAT BENGALURUTP Adjustment - selection of comparable - as per CIT-A 0% RPT filter should be applied - HELD THAT:- We find from the order of TPO that application of RPT of more than 25% was applied by TPO as well as the assessee-company. Therefore, the ld.CIT(A) was not justified in excluding the above companies by applying 0% of RPT filter. Accordingly, this ground of appeal filed by the revenue is allowed. Companies having abnormal profits - Companies making super profits or losses cannot by ipse facto reason to exclude the companies from the list of comparables. See QUARK SYSTEMS PVT. LTD. [2009 (10) TMI 591 - ITAT, CHANDIGARH] M/s.Infosys Technologies cannot be considered as a comparable on the ground of brand value. Accordingly, we uphold the finding of the ld.CIT(A) to exclude this company from the list of comparables. Foreign exchange gain arising out of sale proceeds received from AE constitutes part of operating income - we remand this issue to the file of the AO/TPO to re-compute the margin of the assessee by treating foreign exchange gain as part of operating income and also compute profit margins of the comparable entities by treating foreign exchange gain as operating income. This ground of appeal filed by the revenues is partly allowed for statistical purposes. Deduction of 5% from arms length as standard deduction - HELD THAT:- This issue is covered by the decision of the co-ordinate bench of Tribunal in the case of addition of the code adventure of the table in the case of Tatra Vectra Motors Ltd. vs. Dy.CIT [2012 (4) TMI 359 - ITAT BANGALORE] in favour of the assessee-company as find no justification in the action of the lower authorities in disentitling the assessee from its claim for the benefit of +/5% to compute ALP in terms of the erstwhile proviso to section 92C(2) Exclusion of companies on functional dissimilarities - Additional grounds of cross objections - HELD THAT:- We find that there is no finding either by the ld.CIT or by the TPO on functional differences vis-à-vis tested party. Since the relevant information is not on record we deem it fit to admit the additional ground of appeal and set aside the issue to the file of the TPO to decide the issue of comparability on functional differences
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