Transfer pricing comparables and operating income principles applied to software development services, with exclusions, inclusions, and tax credit ver...
Transfer pricing on performance guarantees and overdue receivables deleted where warranty obligations were embedded and working capital adjustment alr...
The Tribunal held that comparables lacking functional similarity were to be excluded, while Keystone Integrated Marketing Services Pvt. Ltd. had to be included because the DRP had already directed its inclusion. Pass-through third-party costs in the contract R&D segment, incurred without value addition and recovered on a cost-to-cost basis, were excluded from the PLI computation and the related transfer pricing addition was deleted. Working capital adjustment was recognised as an accepted TP adjustment and directed to be verified on actuals. The DRP's direction to set off contract R&D income against royalty attribution was binding on the AO, so the adjustment was reduced accordingly. Arithmetical errors and foreign tax credit claims were remanded for verification and recomputation.
The Tribunal held that comparables lacking functional similarity were to be excluded, while Keystone Integrated Marketing Services Pvt. Ltd. had to be included because the DRP had already directed its inclusion. Pass-through third-party costs in the contract R&D segment, incurred without value addition and recovered on a cost-to-cost basis, were excluded from the PLI computation and the related transfer pricing addition was deleted. Working capital adjustment was recognised as an accepted TP adjustment and directed to be verified on actuals. The DRP's direction to set off contract R&D income against royalty attribution was binding on the AO, so the adjustment was reduced accordingly. Arithmetical errors and foreign tax credit claims were remanded for verification and recomputation.
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 4801
Join Channel
TaxTMI 
