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2016 (1) TMI 1367 - ITAT BANGALORE
Selection of comparables - determination of arm's length price - functional similarity - Held that:- Excessive profits or abnormal loss by itself would not be a reason for exclusion of a company from the list of comparables which was otherwise similar to the tested party - it was not a case where exclusion was directed by the CIT (A) solely for a reason of abnormal profits. Such directions were given considering the fact that such profits arose out of an extraordinary event of amalgamation - thus appeal of revenue stands dismissed
Selection of comparables by applying the turnover filter - Held that:- We cannot say that turnover is having no relevance, especially when the assessee was having a turnover below ₹ 10 crores and was being compared with entities having turnover well exceeding ₹ 200 crores. We are therefore convinced that CIT (A) was justified in direction exclusion of companies having turnover in excess of ₹ 200 crores from the list of comparables - appeal of revenue stands dismissed
Liable for a standard deduction of 5% applying proviso to Section 92C(2) - Held that:- AR fairly conceded that the proviso to Sub-section (2) of Section 92C of the Act could not be considered as a standard deduction. We therefore allow ground taken by the Revenue.
Assessee is an off-shore development centre had international transactions with its AE during the relevant previous year in the software development segment, thus companies functionally dissimilar with that of assessee need to be deselected from final list