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2018 (8) TMI 1922 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- 6 companies whose turnover was more than ₹ 200 crores were excluded from the list of comparable companies viz., Infosys Technologies Ltd., Larsen & Toubro Infotech Ltd., Mindtree Ltd., Persistent Systems Ltd., Sasken Communication Technologies and Tata Elxsi Ltd. Foreign exchange gain/loss relating to transactions of the relevant previous year alone - HELD THAT:- Since the foreign exchange loss directly resulted from trading items, it could not be considered as a non-operating loss. Further, it is noted by the Dispute Resolution Panel that the service agreement between the Associated Enterprise (AE) AND THE Assessee stated that for the specified products and services provided by the Assessee, it “shall raise invoices on Ameriprise USA [2016 (3) TMI 1272 - DELHI HIGH COURT] on the basis of a cost plus pricing methodology.” The ITAT was therefore right in holding that the AO was not justified in considering the foreign exchange loss as a non-operating cost. Adjustment on account of risk afresh - HELD THAT:- We view that the issue requires re-examination by the TPO/AO. The order of DRP is set aside and the AO/TPO is directed to examine the adjustment on account of risk afresh. The assessee is directed to give the necessary details of the nature of risk and the impact on profit margins and also the basis of quantification of adjustment towards risk. Direct the AO to allow deduction u/s. 10A of the Act on the amount disallowed u/s. 40(a)(ia) of the Act. Giving credit for Advance Tax paid - HELD THAT:- It would be just and appropriate to direct the AO to verify and give credit for advance tax paid, if the contention of the assessee is found to be correct. Deduction u/s.10A - HELD THAT:- Whatever is excluded from the export turnover should also be excluded from the total turnover.
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