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2017 (9) TMI 178 - AT - Income TaxTPA - selection of comparables - Additions in respect of international transactions - MAM - suitability of CG-VAK Software & Exports Limited as comparable - Held that:- Assessee company has been providing research and information services and IT support services to its group companies being a captive contract service provider. When it is not in dispute that the comparable company, namely CG-Vak Software & Exports Limited is a listed company, its quarterly results are available in public domain and there is no need even for extrapolating the result. So, in these circumstances, we are of the considered view that this comparable company is a suitable comparable company and consequently, this issue is remanded to the ld. TPO to benchmarking the international transaction in question by including this comparable in the final set of comparables by verifying the quarterly results available in the public domain as this company is a listed company. Computational error in margins of assessee and comparables - exclude FBT while computing the margins of assessee - Held that:- Even application filed on 03.04.2013 has not been disposed off to exclude the FBT in case of assessee as the same has been excluded while computing the margins of comparable companies. Even, ld. Senior DR attending the case for the last three years has not preferred to direct the quarter concerned to comply with the directions issued by higher Revenue Authorities, the ld. DRP in this case. This is a case of complete lack of empathy and voluntarism on the part of lower Revenue Authorities by not complying with the order of the higher authorities. So, we hereby direct the TPO/AO to comply with the directions issued by the ld. DRP to exclude FBT while computing the margins of assessee as has been done in case of comparable companies to arrive at a correct computation of the margins of assessee as well as comparable companies. Computing the operating margin - Held that:- We consider the amount of foreign exchange gain/loss from foreign exchange fluctuation being non operating items as per Safe Harbour Rules while computing the operating margin of the comparable company as well as assessee company from provisions of IT Support services. - Decided in favour of assessee for statistical purposes.
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