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2023 (3) TMI 504 - AT - Income TaxTP Adjustment - comparable selection - RPT transaction within the relevant criteria of 25% - HELD THAT:- Icon Clinical Research India Pvt. Ltd.- We note that the DRP did not verify the computation of RPT by the assessee and that of the Ld.TPO. The Ld.TPO also did not consider the computation of RPT of this company as per the accounts aspect and therefore is remanded in the interest of justice. We direct the Ld.TPO to verify the same and to consider this comparable, only if the RPT transaction fits within the relevant criteria of 25% as applied by the Ld.TPO. Syngene International Ltd. - As submitted that in the notes to the financial statement this company also renders services in the stream of discovery chemistry and biology services, toxicology, pharmaceutical development, process development / manufacture of advanced intermediates, active pharmaceutical ingredients and bio-therapeutics. We therefore direct the Ld.TPO to exclude this company from the list. Working capital adjustment - HELD THAT:- We direct the Ld.AO/TPO to compute the Working Capital Adjustment on actuals. The assessee has also sought risk adjustment in this ground which may be considered by the Ld.TPO only if the assessee is able to establish the difference in risk undertaken by assessee with the comparables that remains for computing the margin. Treating the recovery of passthrough costs by the assessee as operating in nature - HELD THAT:- Considering the fact that there is no change in facts and the nature of pass-through costs being identical, respectfully following the above view taken by this Tribunal, in assessee’s own case for A.Y. 2013-14 [2021 (10) TMI 908 - ITAT BANGALORE] we hold that the recovery of expenses is a separate international transaction that needs to be determined and the Ld.TPO has rightly computed the markup of such transaction.
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