Held that where revenue recognition method followed by selected company caused drastic variation in profit margin of said company, it would be safe to exclude it from final list of comparables particularly when assessee followed fixed price project model where revenue from software development was recognised based on software developed and built to clients. TPO has applied a turnover filter of Rs. 1 crore, companies having turnover of more than Rs. 200 crores have to be eliminated from list of comparables. (AY. 2019-10)
Triology E-Business Software India (P.) Ltd. v. DCIT (2021) 188 ITD 615 (Bang.)(Trib.)
S. 92C : Transfer pricing-Arm’s length price-Comparable-Functionally similarity-Safe to exclude it from final list of comparables to assessee who had been following fixed price project model-turnover filter of Rs. 1 crore, companies having turnover of more than Rs. 200 crores have to be excluded.