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2022 (7) TMI 1377 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- Assessee has been characterised to be a limited risk distributor and the captive service provider in respect of Business support service segment, thus companies functionally dissimilar with that of assessee need to be deselected. Addition of AMP expenses - international transaction - HELD THAT:- Directing the Ld.AO to delete the adjustment made on account of AMP expenses by treating it as separate international transaction. Incorrect computation of margin - HELD THAT:- We direct the Ld.TPO to verify the correct margins of the comparables while computing the operating margin used for determining the ALP. Assessee is directed to furnish relevant information in support of the same. Working Capital Adjustment not granted while computing the margins - HELD THAT:- DRP may be correct in denying working adjustment due to unavailability required data, however there is no merit in observations of DRP/TPO as supported by CIR DR, in denying working capital adjustment due to absence of details for working out adjustments in comparable companies chosen. If we appreciate the argument advanced by Ld.CIT.DR, there would remain no comparables for the purpose of comparability analysis to determine ALP of an international transaction, and this would be fatal to entire exercise of transfer pricing analysis. Regarding comparable companies, one has to fall back upon only on information available in public domain. If that information is insufficient, it is beyond the power of the assessee to produce correct information about comparable companies. Revenue on the other hand has sufficient powers u/s.133(6) to compel production of required details from comparable companies. If this power is not exercised to find to get information required, then it is no defense to say that Assessee has not furnished required details to deny any adjustment on account of working capital differences. Therefore this objection of DRP is not sustainable. Therefore in, endeavor should be made to bring in comparable companies for the purpose of broad comparison and working capital adjustment claimed by Assessee should be analysed, keeping in mind, OECD guidelines. Based on the above discussions, and respectfully following decision of coordinate Bench of this Tribunal in the case of Huawei Technologies India (P.) Ltd. [2018 (10) TMI 1796 - ITAT BANGALORE] we direct working capital adjustment to be computed and to allow as per actual, after considering exclusion/inclusion of comparable companies in the final set of comparables as discussed hereinabove. Ground raised by assessee stands allowed.
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