Transfer Pricing: Only functionally comparable companies can be compared for calculating ALP

Brief of the case:

ITAT held in Acclaris Business Solutions Lvt Ltd. Vs I.T.O that only those companies could be compared for calculating ALP which were functionally similar. Those companies which were not performing similar functions could not be compared for calculating ALP. If the companies were having different functional lines then their profit margins could not be compared.

Specific reasons should be there to exclude the high profit margin company from the list of comparables

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