2016 (4) TMI 1211 - AT - Income Tax

TPA - selection of comparable - Held that:- TNMM as most appropriate method and cost + margin as a profit level indicator for the transferring pricing study. The assessee-company applied Transactional Net Margin Method [TNMM] which was considered to be the most appropriate method for purposes of bench marking the international transactions. The assessee-company’s profit margin was computed at 16.25% in respect of software services segment and 15.73% in respect of ITeS segment. Companies dissimilar with that of assessee need to be excluded from final list of comparable.

Deduction u/s 10A - Held that:- We direct the AO to reduce telecommunication expenses from the export turnover as well as total turnover and allow the deduction u/s 10A accordingly.