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TMI Blog2019 (7) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... far as possible, the comparables must be selected keeping in view the comparability factors as specified. Wide deviations in profit level indicator must trigger further investigations/ analysis In the present case the reasons given by the ITAT for excluding Axis as a comparable appear to be plausible and based on a detailed analysis of the different profiles of the Assessee and Axis. Consequently, the Court is not persuaded that the ITAT has erred in excluding Axis as a comparable. No substantial question of law arises. - ITA 176/2019 - - - Dated:- 8-7-2019 - S. MURALIDHAR AND TALWANT SINGH JJ. Appellant Through: Mr. Ajit Sharma with Ms. Adeeba Mujahid, Advocates Respondent Through: Mr. Neeraj Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjustment of ₹ 5,75,92,477/-. The matter was then taken, at the instance of the Assessee, before the Dispute Resolution Panel (DRP). Under the direction of the DRP the three comparables which had been picked up by the TPO were examined again. The DRP noted that ICRA Management Services which had been retained by the TPO as a comparable should be excluded since it had totally different Functionality Assets and Risks (FAR) when compared with the Assessee. BVG India Limited was also excluded as a comparable in the final set of comparables. Axis and other comparables were retained as such. Aggrieved by the order of the DRP, the Assessee approached the ITAT, which, while agreeing with the Assessee, directed that Axis be excluded as a comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was a routine captive sourcing service provider for consumer goods. As pointed out by this Court in Rampgreen Solutions Pvt. Ltd. v. CIT 377 ITR 533 (Del) comparability analysis by the transactional net margin method may be less sensitive to certain dissimilarities between the tested party and the comparables. However, that cannot be the consideration for diluting the standards of selecting comparable transactions/ entities. A higher product and functional similarity would strengthen the efficacy of the method in ascertaining a reliable arm's length price. Therefore, as far as possible, the comparables must be selected keeping in view the comparability factors as specified. Wide deviations in profit level indicator must trigg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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