· In this case, the assessee-company was engaged in the business of providing information technology enabled services to its group companies.
· The TPO computed the ALP making an upward adjustment in respect of IT enabled services. While making the TP adjustment so as to determine the ALP, the TPO considered five comparables.
· With regard to one of the comparables, there was no dispute that the comparable was functionally comparable to the assessee's case.However, the accounting year adopted by the said comparable was different from assessee's accounting year. The said comparable adopted 1st January to 31st December as accounting year, as against the accounting year adopted by the assessee as 1st April to 31st March.
· The Hon’ble Tribunal was of the view that the data for the financial year, as that of the comparable, could be compiled from the audited accounts of the assessee company. Hence, the Hon’ble Tribunal directed the assessee to furnish data to the TPO, who after verification of the same, can determine the ALP.
· The Hon’ble Tribunal, therefore, was of the view that a functionally comparable company ought not to be excluded from the list of comparables merely because it had a different accounting year.
For further reading, refer the attachment.
Further Reading