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2023 (2) TMI 1103 - AT - Income TaxTP Adjustment - Comparable selection - HELD THAT:- Datamatics Financial Services Ltd. comparable is functionally dissimilar and hence cannot be considered. Allsec Technologies Ltd. - TPO has considered the financial over the period of three years and hence rejected this as a comparable. We decline to interfere with the order of the ld. CIT(A) who affirm the order of the TPO. Computation of profit margin of two comparables - ICRA Online Ltd. and Axis IT &T Ltd. - ICRA Online Ltd. (19.13%) TPO wrongly adopted margin of 19.13% in its order dated 01 June 2015 while giving effect to CIT(A) order. Corrected margin of 17.08% should be considered.TPO has incorrectly treated Interest and Miscellaneous Income as operating income and loss on sale of assets as operating expense. In doing so, the TPO failed to appreciate that these are non-operating items and cannot be included. Axis-I T & T Ltd. (13.13%) - TPO wrongly adopted margin of 13.13% in its order dated 01 June 2015 while giving effect to CIT(A) order. It is submitted that corrected margin should be computed after excluding non-operating income/expenses like dividend, interest, liabilities written back, provision for bad debts, prior period expenses. TPO shall re-compute the profit margins. Risk adjustment to the Appellant - We direct that the assessee shall demonstrate the risk involved, encountered before the TPO and the TPO shall after examining the facts of the case and allow risk adjustment.
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