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2021 (6) TMI 1134 - AT - Income TaxTP Adjustment - MAM selection - authorities below while adopting the TNMM Method by making an adjustment u/s. 92CA of the Act on the whole Operating Cost incurred by the eligible Assessee - HELD THAT:- The contention of the assessee is primarily acceptable and the decision cited by the learned AR in respect of the assessee’s contention is supportive of such conclusion. However, the learned DRP has given a finding that the figures as given by the assessee needs to be verified. According to the DRP, the assesseee has not maintained separate segmental details and the claim has been based only on internal reports without any certificate from the auditor. In such an event the DRP should have called upon the Assessee to furnish the required details. When in principle adjustment cannot be made in respect of transaction with unrelated parties u/s.92 of the Act, the DRP should have called for the required details, rather than not adjudicating even on the principle. We are therefore of the view that in principle we agree to the proposition put forward by the assessee in ground No.6. We, however, remand the issue to the AO/TPO to call upon the assessee to given the correct figures based on certificate from the auditor and thereafter make adjustment in respect of ALP only in respect of transactions with AE. Thus, the ground of appeal is treated as allowed for statistical purposes. Computing the arm's length price of the international transactions - TPO treating the Exchange fluctuation gain as non-operating in nature and excluded the same from computation of Operating margins of the eligible Assessee while computing the arm's length price of the international transactions - HELD THAT:- Foreign exchange has been treated as the part of the operating profits, if they are integral to the process of the export of the software or if they arise out of operating income of the assessee. In view of the aforesaid decision SAP LABS INDIA (P.) LTD. [2010 (8) TMI 676 - ITAT, BANGALORE], ELECTRONICS FOR IMAGING INDIA PVT. LTD. [2016 (2) TMI 1123 - ITAT BANGALORE] AND M/S. KHF COMPONENTS PVT. LTD. [2016 (7) TMI 811 - ITAT BANGALORE] we are of the view that the foreign exchange gain has to be treated as part of the operating profit of the assessee. We hold and direct accordingly.
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