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2017 (9) TMI 99 - AT - Income TaxTPA - comparable selection - admission of additional ground - Held that:- Merely making a reference about their functional dissimilarity without pointing out specific functional dissimilarity in the function of the assessee vis-a-vis comparable prima facie, the assessee cannot be allowed to resile from the comparables selected by it. This shows that the assessee has taken the Government machinery for a ride for 11 years. Therefore the claim of the assessee for admission of additional ground is on weak footing except that the assessment year involved is the assessment year 2006-07 which is very near to the assessment year (AY 2004-05) for which the appeal is decided by the Special Bench in Deputy CIT v. Quark Systems P. Led. (2009 (10) TMI 591 - ITAT, CHANDIGARH ), holding that those were the initial years of transfer pricing assessments. The co-ordinate Bench has not laid down a law that anytime and every time the assessee can resile from a comparable. Therefore, after pointing out the above facts, respectfully following we admit the additional ground of appeal of the assessee in interest of justice. Determination of functional profile of the assessee - high-end service provider or low-end service provider - Held that:- In view of the categorical finding of the co-ordinate Bench for the assessment year 2005- 06 based on the transfer pricing study report of the assessee itself now it is not possible to assume the functional profile of the assessee as low-end ITES provider. It is also not possible to ignore the findings of the co-ordinate Bench for the assessment year 2007-08 further the appeal before us is the assessment year 2006-07 which is in between the year of both the above years decided by the co-ordinate Bench. The two comparables objected by the assessee also cannot be directed for its exclusion without reaching at the correct functional profile of the assessee. Therefore, in the interest of justice and to dig out the correct functional profile of the assessee amidst host of confusion, we set aside the whole issue of transfer pricing adjustment back to the file of the learned Assessing Officer/Transfer Pricing Officer for ascertaining the correct functional profile of the assessee for this year without being influenced by the order of the co-ordinate Bench for the assessment year 2007-08, then carry out examination of comparability analysis and then determine the arm's length price of the international transactions. Needless to say that the assessee shall be duty bound to provide correct functional profile of the assessee and its complete search process and its steppers results to the learned Transfer Pricing Officer/Assessing Officer along with its justification for claim of working capital adjustments or capacity utilisation for examination by the learned Assessing Officer/Transfer Pricing Officer. Whether deduction under section 10A of the Income-tax Act is allowable after setting of brought forward losses of the previous year, or before that? - Held that:- According to us after the decision of the Hon’ble Supreme Court in the case of CIT v. Yokogawa India Ltd. [2016 (12) TMI 881 - SUPREME COURT] issue is squarely covered in favour of the assessee.
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