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2015 (7) TMI 241 - AT - Income TaxTransfer pricing adjustment - Exclusion of M/s. Oil Field Instrumentation India Ltd., Celestial Labs, Ltd., and Agile Electric Technologies Pvt. Ltd. as comparables - Held that:- The learned CIT(A) has rejected the aforesaid three companies as comparables based on functional differences vis-a-vis the assessee also relying on the decision of the ITAT, Mumbai Bench in the case of Tevapharm India Pvt. Ltd. [2011 (12) TMI 284 - ITAT MUMBAI] for Assessment Year 2007-08 wherein these three companies were rejected as comparables in respect of an R&D Service Provider. Before us, no material evidence has been brought on record by revenue to justify the inclusion of these three companies in the list of comparables. Whether assessee is eligible for standard deduction of 5% from the ALP under the proviso to section 92C(2)? - Held that:- The Income Tax Act, 1961 has been amended with retrospective effect from 1.4.2002 by the introduction of a clarificatory amendment in which Section 92C(2A) was inserted by Finance Act, 2012. This new section mandates that if the arithmetical mean price falls beyond +/- 5% from the price charged in the international transactions, then the assessee does not have any option referred to in Section 92C(2) of the Act. Thus, as per the above amendment, it is clear that the +/- 5% variation is only to justify the price charged for international transactions and not for adjustment purposes. The aforesaid amendment brought about by Finance Act, 2012 has settled the issue and accordingly the 5% standard deduction benefit is not allowable to assessees. Thus the decision of the learned CIT(A) in the impugned order on this issue is reversed. - Decided in favour of revenue.
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