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2016 (6) TMI 1180 - AT - Income TaxTPA - comparables selection - Held that:- Assessee being characterised as a routine service provider companies functionally different and having two different segments IT and ITeS and that it has earned supernormal profits due to this similar nature of services need to be excluded. Foreign exchange gain/loss arising out of revenue transaction is required to be considered as an item of operating revenue/cost. Not allowing suitable adjustments on account of differences in the risk profile of the comparable vis-a-vis that of the assessee - Held that:- As observed from the transfer pricing study the assessee functions in a low-risk or almost risk mitigated environment viz-a-viz enterprise a real risk borne by the comparables. The assessee is thus operating under economic circumstances that warrant adjustments to the margins made by the comparables so as to make the comparison between the margins earned by the comparable companies and the assessee appropriate we therefore are of the considered opinion that the entitlement of the assessee in respect of adjustments on account of differences in the risk profile of the assessee with that of the comparable cannot be denied. Disallowance of benefit under section 10A - AO had reduced the lease line charges from export turnover, however rejected the similar treatment while computing total turnover - Held that:- The issue has been considered at length in favour of assessee in assessee’s own case for assessment year 2007-08, 2008-09 and 2009-10. After considering the rival submissions and pursuing the relevant material on record we find force in the contentions advanced by the ld.AR, requiring the exclusion of lease line charges from total turnover as well.
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