ITAT Rules on Comparable Companies and Working Capital Adjustments Under Transfer Pricing Rules Section 92C

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....The ITAT upheld the exclusion of Cybage Software P. Ltd. and Nihilent Ltd. from the final list of comparables due to lack of segmental revenue data and extraordinary acquisition events, respectively. Sagarsoft (India) Ltd.'s claim as a comparable was rejected based on absence of product development and insufficient evidence of on-site services. Conversely, R Systems Ltd. and Infomile Technologies Ltd. were directed to be included as comparables, the former despite differing financial year-ends and the latter due to functional similarity in software development services. Regarding adjustments for outstanding receivables, the AO/TPO was instructed to verify whether working capital adjustments already account for credit periods, and if so, no separate adjustment for interest on delayed receivables is warranted.....