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Issues involved: Interpretation of transfer pricing provisions u/s 10A, use of earlier year data for comparability analysis, standard deduction in TP cases, comparability adjustment, selection of comparables with related party transactions, determination of arm's length price.
Issue 34 - Transfer Pricing Provisions u/s 10A: The Tribunal's decision on invoking transfer pricing provisions when section 10A is availed by the assessee is under scrutiny. The key question is whether the Tribunal erred in its interpretation considering the plain and unambiguous language of the statute. Issue 36 - Use of Earlier Year Data for Comparability Analysis: The Tribunal's justification for allowing the use of earlier year data in comparability analysis, contrary to the mandatory requirement of using current year's data as per rule 10B(4), is being examined. Additionally, the restriction on using data available in public databases by the specified date is questioned. Issue 37 - Standard Deduction in TP Cases: The Tribunal's ruling on the proviso to section 92C(2) providing for a standard deduction of 5% in all transfer pricing cases is being reviewed for its correctness and applicability. Issue 38 - Comparability Adjustment: The Tribunal's decision to allow a flat comparability adjustment of 11.72% without considering important factors like the quality, purpose, and reliability of the adjustment, as required by Rule 10B(3)(ii), is being challenged. The focus is on whether the Tribunal deviated from the prescribed criteria for making adjustments. Issue 39 - Selection of Comparables with Related Party Transactions: The Tribunal's stance on excluding companies with any related party transactions from being selected as comparables, while accepting a comparable with significant related party transactions, is being questioned. The consistency and rationale behind this decision are under scrutiny. Issue 40 - Determination of Arm's Length Price: The Tribunal's decision to uphold the arm's length price determined by the taxpayer, despite identified defects, and rejecting the TPO's determination based on cogent evidence and correct data analysis is being evaluated. The correctness and reliability of the arm's length price determination process are at the center of this issue. This summary provides a detailed breakdown of the issues involved in the judgment, highlighting the specific legal questions and challenges raised in each aspect of the case.
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