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2014 (6) TMI 636 - AT - Income TaxWorking capital adjustment – Held that:- Following M/s Avineon India Pvt. Ltd. Versus Dy. Commissioner of Incometax [2014 (5) TMI 107 - ITAT HYDERABAD] - assessee contended that trade practice of advances and subsequent adjustment of these advances against invoices raised, being captive service provider has a bearing on profit margin, therefore, working capital requirement should be taken care of by way of adjustments - Whether similar conditions exist for other comparables require examination and adjustment towards working capital – assessee furnished detailed annexure making working capital adjustment to justify 3.30% sought by Assessee as against 1.38% given the TPO – thus, the matter is required to be remitted back to the TPO for verification with a direction to examine the veracity of Assessee’s claim and take proper decision in correctly computing the working capital adjustment – Decided in favour of Assessee. Selection of comparables – Held that:- Following M/s Avineon India Pvt. Ltd. Versus Dy. Commissioner of Incometax [2014 (5) TMI 107 - ITAT HYDERABAD] - the TPO had included the company which was also engaged in portfolio management services and investment activities and such services cannot be compared to Assessee as both are in divergent sectors - the company cannot be a comparable, thus, the AO is directed not to treat the company as comparable to the assessee – AO/TPO is directed to determine the ALP – Decided in favour of Assessee.
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