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2019 (8) TMI 1465 - ITAT HYDERABADTP Adjustment - Comparable selection - HELD THAT:- Assessee is engaged in the business of rendering support services in relation to Computer Aided Designing (CAD). Assessee as an ITeS service provider and not as a KPO companies functionally dissimilar with that of assessee need to be deselected from final list. Computation of ALP - Referring to decision of the Coordinate Bench in the case of Kenexa Technologies (P.) Ltd. [2014 (11) TMI 587 - ITAT HYDERABAD] we hold that the provision for bad and doubtful debts is an operating expense and has to be considered while computing the ALP. AO/TPO is accordingly directed to take the same into consideration as operating expenditure. Working capital adjustment - As relying on Kenexa Technologies (P.) Ltd. [2014 (11) TMI 587 - ITAT HYDERABAD] we are of the opinion that appropriate working capital adjustment is required to the margins of comparable uncontrolled transactions to generate credible comparable data on transactional net margins since the TNMM is applied. Hence, we set aside this issue to the TPO with a direction to allow requisite adjustments on account of the impugned "working capital" while determining the margins of comparable - we direct the TPO to allow the working capital adjustment to the assessee and recompute the ALP accordingly.
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