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2014 (4) TMI 72 - AT - Income TaxTransfer pricing adjustment - Method to determine ALP - Selection of comparable - application of turnover filter - Assessee adopted Cost Plus Method (CPM) for computing arm's length price for its international transactions - Whether, CPM is most appropriate method to determine ALP and not Transactional Net Margin Method (TNMM) – Held that:- CPM is most appropriate method to determine ALP and not TNMM - This issue is squarely covered by decision of Tribunal in Deputy Commissioner of Income-tax, Circle-2(2) Versus Hellosoft India (P.) Ltd.[2013 (10) TMI 747 - ITAT HYDERABAD] which has been accepted by learned AR - Following earlier order TNMM is most appropriate method to determine ALP - Set aside order of CIT(A) and remit matter back to file of AO/TPO who shall determine ALP afresh – Decided against the assessee. Regarding Turnover Filter - Held that:- Tribunal in assessee's own case [2013 (10) TMI 747 - ITAT HYDERABAD] has accepted turnover filter as a relevant factor following the decision of the ITAT, Hyderabad Bench in case of Dy. CIT v. Deloitte Consulting [2011 (7) TMI 583 - ITAT HYDERABAD] The Hon'ble Delhi High Court has also upheld this view in case of Agnity India Technologies (P.) Ltd. [2013 (7) TMI 696 - DELHI HIGH COURT] - while applying the turnover filter a fixed upper limit cannot be applied uniformly and across the board in all cases. The upper limit has to be fixed reasonably, keeping in view the turnover of the assessee in a given case. - Decided in favor of assessee. Regarding onsite revenue filter and employee cost filter - Held that:- the issues are squarely covered by the decision of the coordinate bench in assessee's own case [2013 (10) TMI 747 - ITAT HYDERABAD] - CIT (A) was correct in holding that rejection of comparables selected by the assessee by applying this filter is not correct. - loss making companies and companies having super normal profits cannot be considered as comparables - AO to decide the said issues following the earlier decision - Matter remanded back - Decided against the revenue.
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