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2022 (5) TMI 503 - ITAT MUMBAITP adjustment made in respect of international transaction on purchase of traded goods - inclusion of comparable company ADS Diagnostics Ltd., and its correct gross margins thereon - HELD THAT:- Valuation adopted by the said comparable company is in accordance with generally accepted accounting principles and in consonance with accounting standards issued by ICAI which are mandatorily to be followed by every corporate in India. In view of the same, we find considerable force in the argument advanced by the Ld. AR that closing stock of inventories figure of ADS Diagnostics Ltd., should be considered only at Rs.2,24,02,515/- as against Rs.3,00,11,802/- taken by the Ld. TPO. If the revised closing stock figure of Rs.2,24,02,515/- is considered, then the gross profit margin of the comparable company as worked out in the table supra comes to 11.08%. The aforesaid tabulation has been reproduced in the order of the Ld. DRP in page 18. The workings thereon are not disputed by the Revenue before us. Hence, we direct the Ld. TPO to consider the gross profit margin of ADS Diagnostics Ltd., only at 11.08%. AR before us stated that if the revised gross profit margin of 11.08% is considered, then even after inclusion of said two comparables by the Ld.TPO, the assessee’s margin would be through and no transfer pricing adjustment is required to be made. In view of the same, we direct the Ld. TPO to delete the transfer pricing adjustment made in respect of international transaction on purchases of traded goods. Accordingly, the ground No.1.5 raised by the assessee is allowed.
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