Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (6) TMI 374 - AT - Income TaxUpward adjustment in determining the arm's length price - Rejecting the functional analysis, search process adopted and documentation maintained by the Appellant for this transaction - assessee contested against exclusion of Coral Hubs Ltd. as comparable and for the purpose of taking correct rate of profit in hands of Mold-tek Technologies Limited and Datamatics Financial Services Ltd. - Held that:- Respectfully following the decision of in the case of Willis Processing Services (I) (P.) Ltd. (2013 (3) TMI 415 - MUMBAI TRIBUNAL COURT) restore this issue to the file of AO/TPO for verification of the fact that whether for the year under consideration also the activity of ITES is outsourced by Coral Hubs Ltd. If it is so, then the Coral Hubs Ltd. has to be removed from the list of comparables following the aforementioned decisions. Profit margin of Mold-tek Technologies Limited taken by TPO at 96.66%, the assessee has given calculation of profit rate and reference has also been made to the financial account of the said concern. This issue was raised by the assessee before TPO as well as DRP but no specific findings have been given on that. Therefore, it just and proper to restore this issue also to the file of AO/TPO to give specific finding on that and after giving the assessee a reasonable opportunity in this regard, the correct profit margin should be taken. So far as it relates to contention of the assessee that only segmental result should be taken in the case of Datamatics Financial Services Ltd., this issue is also supported by the decision of the Tribunal in the case of Willis Processing Services (I) (P.) Ltd. (supra). Accordingly direct the A0/TPO to take segmental result for the purpose of computing the arithmetic mean of the said comparable. Assessee should be given reasonable opportunity of hearing and after giving such opportunity the mean margin of comparables should be computed and if the mean margin computed is within the safe harbour of ± 5% then no adjustment should be made - appeal filed by the assessee is partly allowed for statistical purposes.
|