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2016 (3) TMI 1169 - AT - Income TaxTransfer pricing adjustment - TPO determined the PLI of the assessee at -28.05% whereas the PLI of the comparable companies was determined by him at 14.34% by using single year data. This resulted into an upward adjustment of ₹ 8,73,52,427/-. - Held that:- We find the DRP rejected the various contentions of the assessee and upheld the action of the TPO/AO. It is the submission of the Ld. Counsel for the assessee that capacity utilization adjustment should be granted to the assessee since as against average capacity utilization of 57.50% for comparables, the assessee has used capacity of 13.01%. We find some force in the above argument of the Ld. Counsel for the assessee. We find different Benches of the Tribunal are allowing capacity utilization adjustment. Under these circumstances we deem it proper to restore the issue relating to capacity utilization adjustment to the file of the TPO for adjudication of the issue in the light of the decisions cited above and in accordance with law. Similarly the TPO in his order for A.Y. 2012-13 has granted working capital adjustment to the assessee resulting in deletion of TP adjustment. We further find from the paper book that the DRP in its direction for A.Y. 2011-12 has also agreed with the assessee’s contention and directed the TPO to consider the correct operating profit margin of all comparable companies after working capital adjustment. Also we find from the order of the DRP for A.Y. 2011-12 that the DRP has directed the TPO to accept the contention of the assessee that a higher discount is offered to the assessee as well as to the third parties. The TPO has also granted benefit of +/-5% to the assessee in his order for A.Y. 2012-13. We therefore find merit in the submission of the Ld. Counsel for the assessee that the benefit of +/-5% should be granted to the assessee for A.Y. 2009-10, if applicable. In view of the direction of the DRP for A.Y. 2011-12 on various issues and the order of the TPO for A.Y. 2009-10 we are of the considered opinion that the matter requires a re-visit to the file of the TPO for adjudication of the entire issue afresh. - Decided in favour of assessee for statistical purposes.
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