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2017 (10) TMI 1385 - AT - Income TaxTPA - comparable selection criteria - Held that:- The assessee is a wholly owned subsidiary of Haworth Inc., USA. The assessee company is engaged in the business of manufacturing and trading of furniture (primarily chairs) thus companies functionally dissimilar with that of assessee need to be deselected from final list. Exclusion of liabilities written back and bad debts recovered from operating margin of MSS segment - Held that:- The liabilities written back and bad debts recovered are part of operating income of the assessee. AR has pointed that similar disallowance was made in assessment year 2004-05 and the Commissioner of Income Tax (Appeals) allowed the claim of assessee. Thereafter, the Department has not agitated this issue before the Tribunal. We find that Delhi Bench of the Tribunal in the case of Sony India (P) Ltd. [2008 (9) TMI 420 - ITAT DELHI-H] has held that there is no justification for excluding provision written back in Profit and Loss account not forming part of operating profits. Computation of arm's length price of Management Service Fee paid by assessee to AE - Held that:- The assessee has given the details of benefits derived by the assessee from the management service rendered by its AE Haworth Hong Kong Ltd. at page 282 of the paper book. The assessee has also filed additional evidence in respect of management services provided by its AE. In view of fresh evidence furnished by assessee, without commenting on the merits, we deem it appropriate to remit this issue back to file of Assessing Officer/TPO for de novo adjudication. The Assessing Officer shall consider fresh documents filed by assessee and all other relevant documents. The Assessing Officer shall also grant opportunity of hearing to the assessee before deciding the issue, in accordance with law. Accordingly, ground No. 7 raised in the appeal by assessee is allowed for statistical purpose. Modification in selection of comparables under Manufacturing Segment - Held that:- TPO had made no adjustment in respect of manufacturing segment. DRP has also not commented on this issue. We observe that the findings of TPO on this issue are cryptic. We are of considered opinion that this issue requires revisit to TPO/Assessing Officer for fresh adjudication. The TPO is directed to pass a speaking order after affording opportunity of hearing to the assessee while adjudicating this issue, in accordance with law. Accordingly, ground No. 8 raised in the appeal by assessee is allowed for statistical purpose.
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