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2016 (1) TMI 1493 - HC - Income TaxTP Adjustment - comparable selection - exclusion of M/s. Cosmic Global Ltd. ( CGL ) as a comparable by the Assessee - HELD THAT - A perusal of the impugned order of the ITAT reveals that the ITAT was conscious of this fact and proceeded to assess on merits whether the Assessee was justified in seeking the exclusion of CGL as a comparable. The ITAT has set out detailed reasons why the said plea of the Assessee was justified. Inter alia it was noticed that CGL s functional profile did not match that of the Assessee and a substantial portion of its earnings was on account of translation charges whereas the Assessee was not in that line of business at all. This being a purely factual determination, the Court is not persuaded to hold that any substantial question of law arises from the impugned order of the ITAT.
Issues:
Appeal under Section 260A of the Income Tax Act, 1961 against ITAT order for AY 2008-09. Justification for exclusion of M/s. Cosmic Global Ltd. as a comparable by the Assessee. Analysis: The appeal before the Delhi High Court was made under Section 260A of the Income Tax Act, 1961, challenging the ITAT's order for the Assessment Year 2008-09. The Senior Standing Counsel for the Revenue pointed out a previous order by the Court in a different case for AY 2007-08, where the Revenue's appeal was dismissed. However, in the present case, the main point of contention was the exclusion of M/s. Cosmic Global Ltd. (CGL) as a comparable by the Assessee. The Assessee had included CGL during proceedings before the Transfer Pricing Officer and the Dispute Resolution Panel. The ITAT's order acknowledged this issue and thoroughly examined whether the Assessee was justified in excluding CGL as a comparable entity. The ITAT provided detailed reasons supporting the Assessee's plea, highlighting that CGL's functional profile did not align with the Assessee's business, and a significant portion of CGL's earnings was from translation charges, which was not relevant to the Assessee's business activities. As this determination was based on factual analysis, the Court concluded that no substantial question of law arose from the ITAT's order and dismissed the appeal.
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