INCOME TAX ACT, 1961

Section 92C

Transfer pricing - Determination of ALP - Selection of comparables - Rejection without examining accuracy of computation of RPT

Assessee rendered software development services to its AE abroad. TPO considered TCS e-Serve International Limited and Tech Mahindra as comparable to assessee's case. Assessee furnished computation of RPT in respect of these two companies and pointed out that in case of TCS e-Serve Ltd and Tech Mahindra Ltd, RPT was more than 40%. When this objection was raised before TPO, TPO summarily rejected objection by stating that both these companies passed the filter. Held: TPO should have examined calculation provided by assessee and thereafter, should have rejected contention of assessee. Therefore, in the interest of justice and fair play, issue was to restored to TPO with direction to examine arithmetical accuracy of computation of RPT and, if found correct, both the companies were to be excluded from the final set of comparables.

REFERRED :

FAVOUR : Matter remanded.

A.Y. : 2013-14

INCOME TAX ACT, 1961

Section 92C

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