Appeal allowed to exclude severance pay and certain non-comparable firms; revise benchmarking for transfer pricing margins

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....ITAT allowed the appeal of the assessee and directed the TPO to revise the benchmarking analysis. The Tribunal held that severance pay constitutes a non-operating, extraordinary item and must be excluded from operating costs when computing the assessee's margins for transfer pricing purposes. The Tribunal further directed exclusion of several identified comparables: Comparable A (functionally dissimilar and exhibiting extraordinary profit), Comparable B (functionally superior with advanced product offerings and extraordinary profits), Comparable C (diversified group activities and extraordinary profit), and Comparable D (product development focus previously rejected by the TPO), concluding none were functionally comparable to the assessee's captive software development services.....