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2018 (8) TMI 1820 - AT - Income TaxTP Adjustment - Allowability of working capital adjustment - HELD THAT:- The revenue’s stand that the assessee is ineligible for any adjustments if he provides the set of comparable is not correct because under Rule 10(3) it is the duty of the AO/TPO/DRP to minimize/eliminate the difference which is likely to materially affect the price. It is the settled proposition that ‘working capital’ adjustment is an adjustment that is required to be made in TNMM. Allowability of working capital adjustment has been upheld by the various Benches of the ITAT. ITAT Delhi has held working capital adjustment to be allowable in the cases of Mentor Graphics [2007 (11) TMI 339 - ITAT DELHI-H] and Sony India [2008 (9) TMI 420 - ITAT DELHI-H] . Therefore, in view of the settled judicial precedents and further in view of the fact that the Ld. Sr. DR could not point out any legal infirmity in the direction of the Ld. CIT (A) for allowing working capital adjustment, we are unable to agree to the contentions of the Ld. Sr. DR and we find no reason to interfere with the findings of the Ld. CIT (A) on this issue. - Decided against revenue.
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