2018 (3) TMI 222

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.... Mr. Kamal Sawhney, Mr. Shikhar Garg and Mr. Prashant Meharchandani, Advocates ORDER The Revenue's appeal under Section 260-A of the Income Tax Act, 1961 (for short "the Act") challenges the impugned order passed by the Income Tax Appellate Tribunal (for short "ITAT"). It is urged that the deletion directed by the ITAT, based upon its application of the Related Party Transaction ("RPT") a....

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.... 22 comparables on the basis that they were not premised upon the relevant single year data but rather based upon multiple years' data. The OP/TC yielded an operating margin to the AE at 11.61% (within the tolerable range of +/-5% of the three years weighted average of OP/TC), which was computed at 12.51%. The average margin considered by the TPO of comparables was 22.09%. On the basis of appli....

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.... comparables by applying a broad ballpark threshold of taking into account the functioning and profits of comparable entities, whose unrelated transactions were in equal to or in excess to 75% of their business. The Revenue is aggrieved against this filter. It is also aggrieved by the exclusion of M/s Wipro Limited from the list of comparables. The ITAT did so on the basis that the entity had a si....

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....ving similar if not identical functions. Therefore, if a particular entity predominantly has transactions with its associate enterprise - in excess of a certain threshold percentage, its profit making capacity may resulted in a distorted picture, either way. In these circumstances, the ITAT, in the present case, followed a previous precedent and was of the opinion that a broad threshold figure of ....