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The Tribunal held that transition support services arose from a...
Transition support services from corporate spinoff for India business segment - TP adjustment deleted; comparables reassessed; goodwill depreciation, bad debts sustained
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The Tribunal held that transition support services arose from a corporate spinoff and were specific to the acquired India Business Segment; on the basis of record evidence and precedent in the assessee's own case the TP adjustment was deleted. On comparable selection the Tribunal excluded certain comparables for functional dissimilarity (technical subcontracting costs; recruitment-only model; diversified product/system-integration activities) and retained/returned others for fresh functional analysis where comparability on employee-cost or functional profile was unclear - directions given to reassess those comparables. Depreciation on goodwill recognized post-slump sale was sustained based on prior coordinate bench findings; bad debts written off were allowed as revenue expenses under section 36(1)(vii). - ITAT
The Tribunal held that transition support services arose from a corporate spinoff and were specific to the acquired India Business Segment; on the basis of record evidence and precedent in the assessee's own case the TP adjustment was deleted. On comparable selection the Tribunal excluded certain comparables for functional dissimilarity (technical subcontracting costs; recruitment-only model; diversified product/system-integration activities) and retained/returned others for fresh functional analysis where comparability on employee-cost or functional profile was unclear - directions given to reassess those comparables. Depreciation on goodwill recognized post-slump sale was sustained based on prior coordinate bench findings; bad debts written off were allowed as revenue expenses under section 36(1)(vii). - ITAT
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