Capital Gain Deductibility: proportionate IPO and PMS expenses held allowable against capital gains where netting and nexus to transfer are establishe...
Admissibility of Documentary Evidence: appellate authority may admit self explanatory documents on first production and uphold deletion of unexplained...
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.
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