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2023 (10) TMI 1184 - AT - Income TaxTP Adjustment - Disallowing economic adjustments for difference in working capital employed by assessee and its comparables - Comparability analysis - HELD THAT:- For negative working capital of the comparables, this issue has been settled in the case of Software AG (India) Pvt. Ltd [2015 (11) TMI 1895 - ITAT PUNE] and for this, even the OECD guidelines also confirmed the position. In the present case and noted that the Atmel India CDS segment operates with relatively favourable working capital position than that of comparable companies and as a result of this Atmel India working capital percentage on operating cost turns out to be negative i.e. -9.71%. We noted that this fact does not hamper from claiming of working capital adjustment as the Tribunal is consistently allowing this claim as held in the case of Software AG (India) Pvt. Ltd., supra. Hence, we direct the TPO to allow the claim of assessee accordingly. This issue of assessee’s appeal is allowed. TPO rejecting Akshay Software Technologies Limited - As before us, argued that Akshay Software Technologies Ltd., is involved in procurement, installation, implementation, support and maintenance of ERP products & services. It was also argued that Akshay Software Technologies Ltd., is financially comparable as it is engaged in providing computer software & services with the assessee company. Actually this fact needs to be verified whether the Akshay Software Technologies Ltd., is comparable with the functions of the assessee or not. Hence, this issue needs to be referred back to the file of the TPO who will find out whether Akshay Software Technologies Ltd., is comparable to the assessee or not. R Systems International Ltd. rejected as adopted statutory year ending on 31st December, 2012 as financial year as against the financial year ending for tax 31st March, 2013 in the present year - We noted that this does not make any difference whether a company is maintaining its books of accounts for the December ending or March ending. Only a suitable adjustment has to be made in view of different fiscals. Hene, we direct the TPO to take this company as comparable after making suitable adjustments. We direct the TPO / AO accordingly. Appeal filed by the assessee is partly-allowed for statistical purposes.
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