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2018 (6) TMI 1568 - AT - Income TaxTPA - inclusion of E-Infochips Limited as comparable - Held that:- Margins of E-Infochips Limited cannot be applied to benchmark the international transactions undertaken by the assessee with it’s A.Es. We further find that in case of DCIT Vs. M/s. Philips India Limited (2017 (12) TMI 1117 - ITAT KOLKATA) and Ness Technologies (India) Private Limited (2016 (11) TMI 1402 - ITAT MUMBAI), which were also engaged in the activities similar to assessee (i.e., providing software services to its group concerns based on the specifications provided) in A.Y. 2011-12, the Coordinate Bench of the Tribunal, while deciding those appeals directed the exclusion of E-Infochips Limited as a comparable company. E-Infochips Limited cannot be considered as comparable to arrive at Arms Length Price and therefore we direct its exclusion from comparables. Before us, it is assessee’s contention that if E-Infochips Limited is excluded from the final set of comparables, the margin of the assessee would fall within + 5% range vis-à-vis margin of the residual comparables and thus in view of proviso to Sec.92C(2) of the Act, no addition would survive and therefore even other grounds raised would be rendered infructuous. We therefore direct the AO to re-compute the margins of comparables by excluding E-Infochips Limited from the list of comparables and thereafter compute the TP adjustment, if any, in the hands of assessee. Thus, the grounds of the assessee are allowed for statistical purposes.
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