The Assessing Officer restricted the deduction claimed under section 10A by invoking section 10A(7) read with section 80-IA(10) on the ground that the assessee had earned a net profit margin of 27.86% as against the ordinary profit margin of 9.35% reflected by comparable companies in the transfer pricing study. The Tribunal deleted the addition. On appeal by the Revenue, the Bombay High Court held that the issue was squarely covered by its earlier decisions in CIT v. Schmetz India (P.) Ltd. (2012) 26 taxmann.com 336 (Bom.)(HC)  and Pragati Aroma Oil Distillers (P.) Ltd. v. DCIT (2026) 187 taxmann.com 31 (Bom.)(HC), wherein it was held that the provisions of section 10A(7) read with section 80-IA(10) can be invoked only when there is material to establish an arrangement between the parties for inflating profits. Mere comparison of higher profit margins with comparable entities or sister concerns is insufficient to infer such an arrangement. As the Revenue failed to demonstrate any such arrangement, no substantial question of law arose. Accordingly, the appeal was dismissed, and the Tribunal’s order was affirmed. (ITXA No. 2924 of 2018, dt. 09-07-2026 )(AY. 2010 -11 )