https://www.taxtmi.com/caselaws?id=462799 The ITAT Hyderabad ruled on transfer pricing adjustments involving software development services. The assessee challenged the selection of comparables, arguing that five companies (Tata Elxsi Ltd, Mindtree Ltd, R S Software India Ltd, Larsen & Turbo Infotech Ltd, and CG-VAK Software & Exports Ltd) were functionally dissimilar and should be excluded. The tribunal found merit in this argument, noting that companies functionally dissimilar to the assessee's software development services should be deselected. However, since excluding these companies would bring the average margin of remaining comparables within the acceptable range of +/- 3% of the assessee's margin, the tribunal declined to adjudicate the issue further, considering it an academic exercise. Similarly, regarding working capital adjustment claims supported by precedents, the tribunal found no need to decide as the comparable margins were already within the acceptable range without such adjustments. en-us Wed, 30 Sep 2020 00:00:00 +0530 Wed, 16 Jul 2025 23:42:42 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=462799 The ITAT Hyderabad ruled on transfer pricing adjustments involving software development services. The assessee challenged the selection of comparables, arguing that five companies (Tata Elxsi Ltd, Mindtree Ltd, R S Software India Ltd, Larsen & Turbo Infotech Ltd, and CG-VAK Software & Exports Ltd) were functionally dissimilar and should be excluded. The tribunal found merit in this argument, noting that companies functionally dissimilar to the assessee's software development services should be deselected. However, since excluding these companies would bring the average margin of remaining comparables within the acceptable range of +/- 3% of the assessee's margin, the tribunal declined to adjudicate the issue further, considering it an academic exercise. Similarly, regarding working capital adjustment claims supported by precedents, the tribunal found no need to decide as the comparable margins were already within the acceptable range without such adjustments. Case-Laws Income Tax Wed, 30 Sep 2020 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=462799