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2017 (5) TMI 1814 - AT - Income TaxTP Adjustment - method of computation of working capital adjustment in case of M/s ICRA Management Consulting Services Pvt. Ltd., being one of comparables finalized by Ld. TPO - HELD THAT:- TPO that while computing working capital adjustment, margin in the case of M/s ICRA Management Consulting Services Pvt. Ltd., has attributed receipts, in the column of average receivables, which disturbed entire calculation. From the financial of M/s ICRA Management Consulting Services Pvt. Ltd., it is observed that there are sufficient trade receivables during the year under consideration. It has been submitted by Ld. Counsel that all these details were before Ld. TPO during assessment proceedings and again during the rectification proceedings under section 154 of the Act. Under such circumstances, and in the interest of natural justice, we are of the considered opinion that these figures needs to be considered while deriving working capital adjustment of M/s. ICRA Management Consulting Services Pvt. Ltd., Accordingly, we set aside this issue to file of Ld. TPO for re-computing working capital adjustment in the light of financial report of M/s. ICRA Management Consulting Services Pvt. Ltd. - In the result this ground raised by assessee stands allowed for statistical purposes. TPO computed net operating margins of two comparable companies, by excluding provision of doubtful debts from operating expenses - To the facts of the present case also the revenue has not disputed the provision of doubtful debts being excessive in the hands of the assessee for the year under consideration. It is also observed that the DRP had directed TPO to have consistent treatment in terms of items includable/excludable in non-operative profit, with assessee as well as with comparables which evidently has not been followed by Ld. TPO. Respectfully following the view taken by this Tribunal in the case of Techbooks International Pvt. Ltd. [2015 (7) TMI 473 - ITAT DELHI] we direct Ld. TPO to treat provision of doubtful debts in the case of BVG India Ltd and Cameo Corporate Services Ltd., as operating as well. Accordingly, this ground raised by assessee stands allowed
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