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2020 (2) TMI 1473 - AT - Income TaxTP Adjustment - ALP determination - non application of upper limit Turnover filter - AR submitted that the turnover of the assessee from ITES segment is around 9 crores and hence it falls under the category of 1 to 200 crores category - whether TPO has erred in failing to apply the upper limit Turnover filter, absence of which has resulted in selection of improper comparables leading to the determination of a highly distorted and excessive Operating Margin under the TNMM? - HELD THAT:- Admittedly, the assessee-company falls in the bracket of companies having turnover exceeding 1 crore but not exceeding 200 crores. It has been held in the case of Autodesk India (P) Ltd. v. DCIT [2018 (7) TMI 1862 - ITAT BANGALORE] that the companies having turnover exceeding ₹ 200 crores cannot be considered as comparable companies in respect of those companies having turnover of less than ₹ 200 crores. The above said decision was followed in the case of Micro Focus Software India (P) Ltd [2019 (12) TMI 678 - ITAT BANGALORE]. Accordingly, by following the decision rendered by the coordinate Bench in the case of Autodesk India (P) Ltd. (supra), we direct the AO / TPO to exclude companies having turnover exceeding ₹ 200 crore. BNR Udyog Limited - In the case of Mobily Indotech India (P.) Ltd. [2018 (8) TMI 1890 - ITAT BANGALORE] as well as FNF India (P.) Ltd [2019 (7) TMI 1760 - ITAT BANGALORE] the above said company has been restored to the file of the AO / TPO for examining it afresh. Following the above said decisions, we also restore FNF India (P.) Ltd., to the file of AO / TPO with similar directions. Adjustment of negative working capital - HELD THAT:- We noticed that the co-ordinate Bench in the case of FNF India (P.) Ltd. (supra) has followed the decision rendered by the Hyderabad Bench of the Tribunal in the case of Autodesk India (P) Ltd. (supra), in order to hold that working capital adjustment in respect of negative working capital is not called for. Following the same, we direct the A.O. to delete the adjustment made towards negative working capital.
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