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2018 (6) TMI 505 - ITAT HYDERABADDetermining Arm’s Length Price u/s 92CA - comparables selection - extraordinary event - Held that:- The assessee company is engaged in providing/rendering R&D support services in respect of CAD and CAE tools in designing the automobile parts and is into modelling and iterative simulation. It receives the basic design from its group company. With respect of CAD modelling, it made a 3-D CAD modelling data of vehicle components using CAD software tools primarily CIT-A. Companies selected as comparable must match functionally with assessee. Provision for bad and doubtful debts and bad debts written off as non operating expenses for the purpose of margin computation of comparable companies as selected by the TPO - Held that:- We direct the AO/TPO to recompute the margins of comparable companies by including bad debts and provision for bad and doubtful debts as operating expenses for the purpose of computing profit and loss of comparable companies. Accordingly, this ground is allowed. Adjustment should be restricted to the value of international transactions - Since the assessee failed to furnish the evidence in respect of the invoices raised for revenue of ₹ 71,26,20,193/- either before the TPO or before the DRP, the DRP rejected the objections raised by the assessee. To meet the ends of justice, we remit this issue back to the file of the TPO with a direction to give one more opportunity to the assessee to submit the required information to substantiate its claim. We direct the assessee to file the required information to substantiate its claim. This ground is allowed for statistical purposes.
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