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2022 (9) TMI 832 - AT - Income TaxTP Adjustment - Comparable selection - Ma Foi Global Search Services Limited and Ma Foi Management Consultants Ltd.excluded on the ground that they maintained their accounts following calendar year as against the assessee following financial year - HELD THAT:- Having heard both the sides and gone through the relevant material on record, it is seen that this issue is no more res integra in view of the judgment of PTC Software (I) Pvt. Ltd. [2016 (9) TMI 1282 - BOMBAY HIGH COURT] holding that two companies with different financial year endings cannot be considered as comparable. The ld. AR was fair enough to accept the position against the assessee. We, therefore, countenance the exclusion of these two companies from the list of companies. ICC International Agencies Limited (Segment) company was wrongly included - In principle, there can be no bar on the assessee seeking exclusion of a company which was inadvertently included in the list of comparables. What is relevant for consideration is the comparability and not the suo motu inclusion or exclusion by the assessee. The way in which the TPO can exclude certain companies, included by the assessee in the list of comparables, which are actually not found out to be so, the assessee can also seek exclusion of a company which was wrongly treated by it as comparable. Our view is fortified by the judgment of the Hon’ble jurisdictional High Court in CIT Vs. Tata Power Solar Systems Ltd. [2016 (12) TMI 1600 - BOMBAY HIGH COURT]. ICC International Agencies Ltd.company returning higher OP/OC for the year - We reiterate that an otherwise comparable company with a high or low profit margin cannot be excluded just because of low or high profit rate. It would merit exclusion if it is proved that such high or low profit margin was because of some abnormal business conditions relevant to the year under consideration. Apart from contending that this company returned higher OP/OC for the year, no specific argument was put forth by the ld. AR to show that such profit margin was not the normal incidence of business. The assessee has not disputed the functional comparability of this company or the FAR analysis. AR failed to bring to our notice the company not passing any of the filters. In view of the fact that the AR has simply harped on the high profit margin as a reason for seeking exclusion without pointing out any abnormal business conditions existing with that company for the year under consideration, we find no reason to disturb the conclusion drawn by the CIT(A) in echoing the inclusion of ICC International Agencies Ltd. (Segment) in the list of comparables.
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