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2022 (3) TMI 1480 - ITAT CHENNAITP Adjustment - working capital adjustment - HELD THAT:- The coordinate benches already granted working capital adjustment to DPSI, assessee. We will no more interfere in the issue. This ground is setting aside for further adjudication to the Ld AO. Erroneous rejection and selection of comparable companies - HELD THAT:- TPO was wrong to exclude the Engineers India Ltd so, the Engineers India Ltd is included in the TP study. TPO has included L&T Limited on the ground that said companies financials are similar to the assessee company. The assessee never disputed the fact that the functions performed by L&T Limited is not similar to functions performed by the assessee company, but requested to exclude L&T Limited only on the ground that its turnover is huge which is almost more than 16 times of turnover of the assessee. We find that the Ld. DRP in its order on page 7 after considering relevant submissions of the assessee has directed the TPO to consider the power segment functionally of L&T Limited and then compare with assessee’s transactions. In addition to this, we also direct the TPO to adopt turnover filter to determine whether the power segment of L&T Limited is fit into the turnover category to compare the transactions of the assessee and then re-compute the TP adjustments. Incorrect computation of margin of comparables and adjustment amount - HELD THAT:- We herein restore the matter back to the TPO with a direction to calculate OP/OC margin by comparing the entities as mentioned above. The matter is setting aside to AO for further calculation. Transfer Pricing adjustment relating to payment of Technical Royalty - HELD THAT:- In this case, the AO has given various reasons to reject the TP study conducted by the assessee for benchmarking royalty payment and thus rejected the arguments of the assessee. Having said so, let us come back to the comparables selected by the TPO. The TPO has selected two comparables M/s Amanasu Energy Corp. & M/s Power verde Inc. According to the ld. Counsel of the assessee both are functionally similar and cannot be compared. He further submitted that in respect of M/s. Power verde Inc., the data relied upon by the TPO pertains to AY 2014- 15, whereas, the issue pertains to AY 2015-16. He further claimed that the TPO has failed to apply proper filter to select the companies. Therefore, considering the facts and circumstances of the case, we are of the considered view that this issue will go back to the file of the TPO for fresh examination of the claim of the assessee to carryout TP analysis in respect of royalty payments. Employees Contribution to PF & ESI - payments of assessee made after the due date of the specific act, but before the due date of filing return u/s. 139(1) - HELD THAT:- The matter is already covered in assessee’s own case [2021 (3) TMI 585 - ITAT CHENNAI] So, the addition made is deleted and accordingly ground of assessee are allowed.
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