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2020 (10) TMI 1353 - ITAT MUMBAITP Adjustment - Comparable selection - OP/OC margin of the 4 comparable companies of the assessee be calculated on the basis of the financial data reported in their audited financial statements, and not on the basis of the data reported in the prowess database - HELD THAT:- As the financial data reported in the prowess database involves classification of items of income or expenses as per its own standard format, therefore, the calculation data base may differ from the OP/OC margin as per the audited financial statements. As observed by us hereinabove, the assessee had furnished the “annual reports‟ of the aforementioned comparable companies in the course of the proceeding before the TPO, vide its letter dated 21.12.2012. We are unable to comprehend as to why the lower authorities had shirked from calculating the OP/OC margin of the aforementioned 4 comparable companies on the basis of the financial data reported in their audited financial statements, which would be more authentic as in comparison to that reported in prowess database. We herein restore the matter to the file of the TPO, with a direction, to calculate the OP/OC margin of the aforesaid 4 comparable companies on the basis of the financial data reported in their “annual reports‟ for the year under consideration. The Ground of Appeal No. 2.1 is allowed for statistical purposes. Inclusion of 4 insurance broking companies (out of the set of 19 comparable companies selected by the assessee before the TPO), in the backdrop of the fact that the CIT(A) himself had held that insurance broking companies were a valid comparable to business facilitation service segment of the assessee - Now when the aforementioned 5 insurance broking companies viz. (i) Almondz Insurance Brokers Pvt. ltd.; (ii) India Infoline Brokers Ltd; (iii) Aditya Birla Capital Insurance Ltd; (iv) Bajaj Capital Insurance Ltd. and (v) Spectrum Business Solutions Ltd. have been accepted by the CIT(A) as valid comparables for benchmarking the international transactions of the assessee, we find no reason for exclusion of the aforesaid 4 insurance broking companies which were selected by the assessee in the course of the proceedings before the TPO. Accordingly, we are persuaded to subscribe to the claim of the ld. A.R that the aforesaid 4 insurance broking companies (out of 19 companies) which were selected by the assessee in the course of the proceedings before the TPO, viz. (i) Anand Rathi Insurance Brokers Ltd; (ii) Edelweiss Insurance Brokers Ltd.; (iii) Karvy Insurance Broking Ltd.; and (iv) India Infoline Marketing Service ltd., merits to be included in the finallist of the comparables for the purpose of determining the ALP of the international transactions of the assessee for the captioned year. Accordingly, we restore the matter to the file of the A.O/TPO for benchmarking the international transactions of the assessee in terms of our aforesaid observations.
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