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2016 (8) TMI 1431 - AT - Income TaxTP Adjustment - comparables selection - HELD THAT:- Accounting year of the assessee and comparables are different. The TPO at liberty to recast the financial for the period involved in the assessee’s case. Accordingly, we direct the TPO to recast the financial for the full period of 12 months covering the previous year 2006-07 relevant to the assessment year 2007-08 and thereafter compare with the assessee’s case so as to correct ALP. This ground is remitted to the file of TPO for fresh consideration. Segmented data in the case of Ador Multi products and Ajanta India. Admittedly, there is segmented data is available in these cases, as such only segmental information which reflects the comparable companies business function related margins should be adopted. Accordingly we remit this issue to the file of TPO to consider the segmented data of these two companies to determine the ALP in this case. This issue is remitted to the file of TPO for fresh consideration. Granting of ±5% benefit provided in proviso to section 92C(2) of the Act to the assessee while determining the ALP - HELD THAT:- An assessee shall not be entitled to exercise its option as referred to in the proviso to sub-section (2) if the variation between the arithmetical mean and the price at which such transaction has actually been undertaken exceeds five per cent. of the arith metical mean. In view of the retrospective operation of the aforesaid provision, the benefit of ± five per cent as a standard deduction cannot be allowed. In other words, if the variation of arithmetic mean is within the range of ±5%, then the assessee is entitled for benefit of ±5% under the proviso to Sec.92C(2) - we direct the TPO to allow ±5% it, it is within the range of ±5%. Ordered accordingly. Non providing any adjustment to arm’s length margin of Comparable Companies on account of differences in Research & Development and Marketing activities - HELD THAT:- The assessee sales only to AE and only job work, no work is involved. Hence by placing reliance with the order of Hyderabad Bench in the case of DCIT Vs. Hellosoft India Pvt. Ltd. [2013 (10) TMI 747 - ITAT HYDERABAD] we direct the AO to grant risk adjustment of 1% towards Research and Development. Appeal of assessee is partly allowed for statistical purposes.
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