Dismissing the appeal of the revenue the Court held that since the assessee had a policy of charging a higher rate of depreciation as compared to the companies selected by the Transfer Pricing Officer, there was a definite impact on the net margins of the assessee as compared to the comparable companies. There was a need for an adjustment to eliminate the differences in the accounting policies of the appellant and the comparable companies, in terms of rule 10B, especially given that in the benchmarked international transactions were sales by a captive service provider to its associated enterprises, on which depreciation would have no bearing and could be excluded altogether. The direction issued by the Tribunal to the Transfer Pricing Officer to exclude depreciation from the cost of the assessee and of the comparables and directing the Assessing Officer/Transfer Pricing Officer to rework the depreciation was not perverse. (AY. 2010-11)