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2016 (2) TMI 916 - AT - Income TaxForeign exchange loss/gain treated as non-operating selection of comparables - Held that:- Perusal of the functions of the assessee as mandated by the agreement on 1st day of October, 2006 demonstrates that the assessee is not a normal service provider nor a ITES company. The assessee requires skill, capability as well as expertise in a particular filed of procurement and manufacturing for performing the functions referred above. The assessee is required to perform functions including, quality control services, providing technical services with respect to the products and aid the manufacturers of the products, provide guidance to the manufacturers with respect to acquisition of raw material, randomly inspect relevant factory conditions etc. In other words the assessee is offering a comprehensive range of procurement related advisory services including quality control etc. Thus Apitco Ltd, Global Procurement Consultants Ltd., Quippo Valuers and Auctioneers Private Limited and TSR Darashaw Ltd are directed to be excluded as a comparable. Treating foreign exchange loss/gain as non-operative - Held that:- On observing the functional profile of the assessee, we are inclined to agree with the contentions of the assessee that the foreign exchange loss/profit is an operating loss, if the transaction on which it arose is connected with the core business/services being rendered by the assessee. This aspect needs examination. Thus we deem it appropriate to set aside the issue to the file of the AO for denovo adjudication in accordance with law.
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