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2023 (1) TMI 1200 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- Assessee reported international transactions in respect of Software Development Service (SWD), IT Enabled Services (ITeS). The arm's length price of the international transactions in SWD/ITeS segments provided to the associated enterprises (AE) has been determined by applying Transactional Net Margin Method (TNMM), stating to be the most appropriate method in the facts and circumstances of the case. The operating profit to operating cost ratio has been taken as the profit level indicator (PLI) in TNMM analysis. Companies functionally dissimilar with that of assessee need to be deselected. All comparable companies sought for inclusion by the assessee in SWD and ITES segment are remanded to the Ld.AO/TPO for reconsideration based on the details filed by the assessee. The Ld.AO is directed to verify the same in accordance with Law, by granting proper opportunity of being heard to the assessee. Direction to the Ld.AO/TPO to adopt correct margin in respect of the comparables that would be finally retained - We direct the Ld.AO/TPO to compute the margine as per rules while passing the OGE.
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