Transfer pricing comparables for IT support services were...

Transfer pricing comparables for IT support services were adjusted by including Rheal Software Pvt. Ltd. and Toxsl Technologies Private Ltd., as the first was not a persistent loss maker and the second was functionally similar and could be raised before the appellate authority. Unearned revenue shown as customer advances was held not to be unexplained cash credit because the assessee had produced supporting records and the amounts were accepted in later years without adverse material, so the addition was deleted. Foreign exchange fluctuation loss was also deleted since the net exchange difference had already been reflected in the audited accounts and taxable income. Interest and fee were remanded for fresh recomputation after opportunity to the assessee.

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