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2012 (10) TMI 884 - ITAT, MUMBAITransfer pricing – ALP – computation - TNMM method - selection of comparable - Held that:- there is no dispute that the transaction between the Assessee and its group companies in Germany whereby the Assessee provided services in the form of contract testing and research services was an international transaction attracting the provisions of Sec.92 of the Act Comparables chosen by the assessee on the basis of the contemporaneous data for A.Y 2006-07 gives an arithmetic mean of 18.97% which we have already mentioned. This is the highest arithmetic mean of the comparable chosen by the assessee - TPO has not given any reason whatsoever for rejecting these comparables - if TPO does not reject a comparable on the ground of functional incomparability then neither the AO or the revenue can take a plea of functional incomparability of the comparables chosen by the assessee in its TP Study - assessee's operative margin has to be held as within the range of 5% of the arithmetic mean of 18.97% of comparable companies and the same has to be accepted as ALP - addition made by the AO and confirmed by the DRP is directed to be deleted - the reasons given by the TPO does not anywhere mentioned as to how the comparables selected by the assessee were not functionally comparable. - decided in favor of assessee.
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