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2015 (10) TMI 1077 - ITAT DELHITransfer pricing adjustment - upward adjustment of Arm’s Length Price of the Internation Transaction - CIT(A) deleted the two comparables, namely, M/s Datamatics Technologies Ltd. and Infotech Enterprises Ltd. on the ground that these companies had substantial related party transactions - Held that:- The law is fairly well settled to the extent that the companies having in related party transactions more than 15% cannot be considered as comparable. But in the present case, though the CIT(A) adopted the same parity of reasoning while deleting the two comparables chosen by TPO, he had not referred to any evidence on the record in support of the conclusion drawn that these comparables had related party transactions exceeding 15%, nor the Authorized Representative of the respondent assessee company could establish this fact conclusively before us. No relief can be granted based on mere reliance on the legal proposition without supporting evidence on record. Therefore, we are of the considered opinion that the interest of justice would be met, if the matter is restored to the file of the Assessing Officer for the verification of this issue, after affording reasonable opportunity of being heard to the assessee company. If it is found on verification that the ratio of related party transactions is more than 15%, these companies may be excluded as comparables. - Decided partly in favour of revenue for statistical purposes.
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