ITAT partly allowed the assessee's appeal in TP matters. It upheld application of an upper turnover filter and directed the TPO to exclude large companies (including multiple major software and IT service entities) from the comparability set in all segments and recompute the assessee's margin and ALP accordingly. ITAT rejected inclusion of additional comparables not emerging from the TPO's search matrix, terming such inclusion as impermissible cherry-picking. It directed conditional inclusion of R Systems Ltd if the assessee satisfactorily reconstructs financials to match the relevant year. The issue of inclusion of Saatchi & Saatchi Pvt Ltd was remanded to the TPO for uniform application of the RPT filter. ITAT further held that working capital adjustment must be examined and, if denied, interest on overdue AE receivables be computed in the invoicing currency (Euro).
ITAT partly allowed the assessee's appeal in TP matters. It upheld application of an upper turnover filter and directed the TPO to exclude large companies (including multiple major software and IT service entities) from the comparability set in all segments and recompute the assessee's margin and ALP accordingly. ITAT rejected inclusion of additional comparables not emerging from the TPO's search matrix, terming such inclusion as impermissible cherry-picking. It directed conditional inclusion of R Systems Ltd if the assessee satisfactorily reconstructs financials to match the relevant year. The issue of inclusion of Saatchi & Saatchi Pvt Ltd was remanded to the TPO for uniform application of the RPT filter. ITAT further held that working capital adjustment must be examined and, if denied, interest on overdue AE receivables be computed in the invoicing currency (Euro).
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