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2018 (4) TMI 1772 - AT - Income TaxTP Adjustment - Comparable selection - HELD THAT:- Assessee was engaged in rendering marketing and sale support services to Genzyme International. During F.Y. 2008-09, the assessee conducted various activities as per the arrangement with the AEs like procurement of market information, collecting, analyzing and reporting relevant market information, participation in creation of market analyses and market strategies, providing advice with respect to economic, financial, political and business environment and business practices and promote the products produced by the AE based on the instruction to be received from the AE. For rendering above services, the assessee was remunerated on cost plus 5% basis, thus companies functionally dissimilar with that of assessee need to be deselected from final list. RPT filter exceeding 25% - assessee submitted that the RPT is only 14.03% - HELD THAT:- We restore the issue to the file of the AO/TPO with a direction to verify the RPT filter and if the assessee fulfills the RPT filter criteria then to retain this company as comparable. The first issue raised by the assessee is accordingly allowed. Incorrect enhancement of cost base for computing the arm’s length price - HELD THAT:- An amount of ₹ 3.90 crores was considered by the assessee for computing transfer prices in financial year 2007-08 itself for computing the tax depreciation and tax computation. The marketing fee paid was amortized only at the rate of 25% on WDV starting financial year 2007-08. It is also the submission of the ld. AR that in subsequent assessment years, the TPO has not added the tax depreciation to the cost base of the assessee company. The matter requires a re-look at the level of the DRP considering the past assessment year as well as subsequent assessment year of the assessee company on this issue. We, therefore, restore this issue to the file of the DRP with a direction to adjudicate the issue afresh after giving due opportunity of being heard to the assessee. Needless to say, the DRP shall decide the issue as per fact and law. The second issue raised by the assessee in the grounds of appeal is allowed for statistical purposes.
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