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2022 (5) TMI 1491 - AT - Income TaxTP Adjustment - software development segment - upper limit of the turnover for exclusion of comparables having high turnover - HELD THAT:- We direct the AO to exclude Larsen & Toubro Infotech Limited, Mindtree Limited, Persistent Systems Limited, Tata Elxsi Limited, Nihilent Limited, Infosys Limited and Cybage Software Private Limited from the list of comparables, since the said companies are having turnover far exceeding Rs.200 crore for the relevant assessment year. It is ordered accordingly. Exclude M/s.R Systems International Limited as a comparable - The issue is restored to the files of the AO / TPO. The AO / TPO shall comply with the directions of the DRP and exclude M/s.R Systems International Limited, if it is found that the said company has prepared financials for the year ending December 2016. It is ordered accordingly. Seeking to rectify the margin of comparable M/s.Harbinger Systems Private Limited - As submitted that the TPO has taken the margin at 11.16%, whereas, the correct margin of this company is 8.12% - TPO has merely incorporated the margin at 11.16% and has not verified the claim of the assessee. Therefore, in the interest of justice and equity, we confirm the directions of the DRP and restore the matter to the AO / TPO to examine the issue afresh. It is ordered accordingly. TP adjustment in Marketing Support Segment - TPO, while giving effect to the directions of the DRP, had deleted the TP adjustment in marketing support segment - AO, in the final assessment order, has included TP adjustment for marketing support segment. The matter is restored to the AO / TPO to examine the issue raised in ground and take a decision in accordance with law. TP adjustment for the software distribution segment - AR has placed on record the TPO’s order passed pursuant to the DRP’s directions, wherein the entire TP adjustment in this segment was deleted (refer page 18 of the TPO’s order giving effect to DRP’s directions). AO is directed to look into the issue raised in ground 12 and take a decision in accordance with law. It is ordered accordingly.
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