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2017 (2) TMI 117 - AT - Income TaxTPA - computation of ALP - selection of comparable - Held that:- DRP is not correct in holding that the TPO can compute the ALP by considering only the two companies which have been selected by the assessee and accepted by the TPO for computing the ALP. Further, the TPO u/s 92CA of the Act has conducted his own search for comparable companies and has arrived at Acropetal Technologies Ltd and Accuspeed Engineering Ltd and the assessee also has accepted these companies as comparables by not objecting to the same before the DRP. Therefore, in view of the fact that the TNMM is the indirect method, requiring a reasonable set of comparables, to arrive at the correct ALP, we do not agree with the directions of the DRP. Disallowance of the claim of the assessee u/s 10A - Held that:- We find that the assessment in the case of the assessee before us was still open as the assessee has filed its objections before the DRP against the draft assessment order and the final assessment order is passed only pursuant to the directions of the DRP u/s 144C(13) of the Act. Therefore, the decision of the Hon'ble Supreme Court in the case of the CIT vs. Nagpur Hotel Owners [2000 (12) TMI 99 - SUPREME Court ] is not strictly applicable to the facts of the case of the assessee as in the assessee’s case, the assessment order has not yet been passed and the assessee has filed the relevant information before the DRP. Therefore, we deem it fit and proper to remand the issue of the computation of deduction u/s 10A of the Act to the file of the AO with a direction to verify the claim in accordance with law after taking note of Form 56F and other documents filed by the assessee before the DRP. Ground treated allowed for statistical purposes.
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