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2018 (9) TMI 786 - ITAT KOLKATAAddition on account of Transfer Pricing Adjustment - selection and rejection of comparable - denial of natural justice - non providing an opportunity to the assessee to have the audited financial statements along with the FAR analysis of the said comparables - Held that:- CIT(A) ought to have given an opportunity to the AO/TPO to offer their comments on the various aspects of the matter by seeking remand report before accepting the submissions made on behalf of the assessee. CIT(A) has passed a very cryptic order and after extracting the submissions made on behalf of the assessee of his impugned order, he has given his conclusions hardly on one and half pages. As rightly pointed out by the learned DR, the comparables selected by the assessee were rejected by the TPO on specific grounds, but the Ld. CIT(A) has accepted the same only by stating that the FAR of the said entities was comparable to the FAR of the assessee-company. He has not given any reason whatsoever to come to that conclusion and has also not commented upon the specific grounds given by the TPO for rejecting the said comparables. Similarly the entities selected by the TPO as comparables on specific grounds were rejected by the Ld. CIT(A) on the ground that their profit and loss account was not available. As rightly pointed out by the learned DR, the OP/OC of the said entities was worked out by the TPO in his order which was not possible without having their profit and loss account. This aspect, therefore, should have been confronted by the CIT(A) to the AO/TPO seeking their comments. CIT(A) in his impugned order has observed that the TPO did not provide an opportunity to the assessee to have the audited financial statements along with the FAR analysis of the comparables selected by him and there was thus a violation of principles of natural justice by the TPO. - Held that:- It is observed that the TPO has clearly mentioned in his impugned order that the financial statements of the said comparables were available in public domain and the assessee did not ask for the same specifically. CIT(A) at least should have remanded the matter to the AO/TPO for providing an opportunity to the assessee to have the audited financial statements along with the FAR analysis of the said comparables if at all, according to the CIT(A), there was any violation of principles of natural justice by the TPO - set aside the impugned order of the Ld. CIT(A) and remit the matter back to him for deciding the same afresh after getting the remand report from the AO/TPO and by passing a well reasoned and well discussed order. Decided in favour of revenue for statistical purpose.
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