Pre-amendment reassessment limitation bars late notices under the preserved regime, invalidating consequential reassessment for affected earlier asses...
Cash-sales explanations for bank deposits require documentary reconciliation; reassessment notice survived where effective response time was available...
Functional comparability in transfer pricing prevents ad hoc arm's length adjustments where functions, assets, risks and reliable comparables are unes...
ITAT allowed the appeal of the assessee and directed the TPO to revise the benchmarking analysis. The Tribunal held that severance pay constitutes a non-operating, extraordinary item and must be excluded from operating costs when computing the assessee's margins for transfer pricing purposes. The Tribunal further directed exclusion of several identified comparables: Comparable A (functionally dissimilar and exhibiting extraordinary profit), Comparable B (functionally superior with advanced product offerings and extraordinary profits), Comparable C (diversified group activities and extraordinary profit), and Comparable D (product development focus previously rejected by the TPO), concluding none were functionally comparable to the assessee's captive software development services.
ITAT allowed the appeal of the assessee and directed the TPO to revise the benchmarking analysis. The Tribunal held that severance pay constitutes a non-operating, extraordinary item and must be excluded from operating costs when computing the assessee's margins for transfer pricing purposes. The Tribunal further directed exclusion of several identified comparables: Comparable A (functionally dissimilar and exhibiting extraordinary profit), Comparable B (functionally superior with advanced product offerings and extraordinary profits), Comparable C (diversified group activities and extraordinary profit), and Comparable D (product development focus previously rejected by the TPO), concluding none were functionally comparable to the assessee's captive software development services.
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TaxTMI 
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