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2019 (11) TMI 360 - ITAT DELHITP Adjustment - proportionate difference for purpose of calculation of +/- 5% benefit as against the actual difference between the Arms Length Price determined and amount shown in the books of accounts - HELD THAT:- After passing of the second rectification order, the final TP adjustment as per the Assessing Officer comes to ₹ 4,10,82,596/- which is 3.86% of the operating cost of the manufacturing segment. Therefore, the adjustment in international transactions being less than 5% of the total international transactions is deemed to be at ALP as per second proviso to sub-section (2) of section 92 of the IT Act. We, therefore, do not find any infirmity in the order of the CIT(A) in directing the A.O./TPO to delete the addition. The ground raised by the Revenue, in our opinion, is without any merit. The various decisions relied on by the ld. counsel also support its case that TP adjustment made under TNMM is not warranted when the value of the international transaction of purchase of raw material and the proportionate arm’s length operating cost falls within the +/- 5% arm’s length range. We further find that the TPO in the instant case has passed rectification order twice i.e., the first one on 19th August, 2014 and the second one on 12th March, 2015 and finally reduced the TP adjustment from 11,09,72,200/- to ₹ 4,10,82,956/-. We, therefore, find merit in the argument of the appeal filed by the Revenue should be dismissed being infructuous since the variation between the ALP so determined and the price at which the international transaction has actually been undertaken does not exceed 5%. The grounds raised by the Revenue are accordingly dismissed.
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