INCOME TAX ACT, 1961

Section 92C

Transfer pricing - Computation of ALP - Whether forex gain/loss would be included while working out operating margin -

AO made exclusion in respect of forex gain/loss while arriving at profit level indicator (PLI) of assessee-company in TP analysis. However, Tribunal set aside the said exclusion and directed the AO to include the same for determining the PLI. Aggrieved, Revenue was in appeal.Held: It is settled that forex gain/loss would be included while working out operating margin of assessee-company in TP analysis. Therefore, the Tribunal was justified in directing the AO to include forex gain/loss while arriving at PLI of the assessee.