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2017 (2) TMI 1413 - AT - Income TaxTP adjustment - disallowance of the Technical and Management costs - payment to parent company - payment relates to “Technical Development and Production Support’ and ‘Technical Marketing Support’ - HELD THAT:- As decided in assessee's own case [2015 (8) TMI 1473 - ITAT CHENNAI] entire matter has to be remitted back to the file of Ld. TPO for denovo consideration because both the assessee as well as the Revenue has not examined the issue with respect to the correct factual matrix. “Management services” and “Technical services” false under different field and the nature of work involved both these services are different. When the assessee has made payments to its parent company it has to establish and justify the nature of payment and the nature of service received for the purpose of determining Arms length price in Transfer pricing matters. The onus is on the assessee to substantiate its claim. Just because the operating cost incurred by the assessee company is less than the operating cost of the comparable companies, the claim of expenses incurred towards payment made to its parent company on an adhoc basis cannot be justified - case the entire confusion has arisen because the assessee company has not submitted the evidence for the service rendered by the parent company to the assessee company against which the payments are made to the parent company by the assessee company. With these observations we remit the matter back to the file of TPO for fresh considerations - Appeal of assessee is allowed for statistical purposes Comparable selection - consideration of risk related adjustment fpr comparable selection - HELD THAT:- In two wheelers space the company’s major customers are TVS, Bajaj Auto and Hero Moto. In the Four wheeler segment, the company’s customers are Tata Motors, Mahindra and Mahindra, Hyundai, Ford and General Motors. The major exports customers are General Motors, Suzuki and Piaggio. Being so, the AO required to reexamine the claim of risk adjustment and replacement adjustment claimed by the assessee and suitable adjustments to be given after apprising the TP documents submitted by the assessee. With this observation, we remit the issue to the file of AO for the purpose of determination of risk adjustment to be granted to the assessee. Inclusion of Loss on Forex fluctuation in Operating Expenditure - reinstatement of foreign currency as per accounting standards - HELD THAT:- As relying on M/S. PENTASOFT TECHNOLOGIES LTD. [2010 (7) TMI 75 - MADRAS HIGH COURT] we are inclined to decide the issue against the assessee holding that foreign exchange loss is a part of operating expenditure. Non-consideration of advance tax payment - HELD THAT:- In our opinion, if it is duly paid, as an advance tax relevant to the assessment year due credit to be given and thereafter the interest u/s.234B & 234C of the Act to be computed.
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