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2012 (11) TMI 1094 - AT - Income TaxTPA - ALP determination - comparable selection - Held that:- Assessee is engaged in the business of providing contract pharmaceuticals Research & Development services, thus companies functionally dissimilar with that of assessee need to be deselected from final list. As already seen in the earlier part of this order, if the six companies (including IDC India Ltd. and Mindtree Ltd.) is taken as comparables, the operating margins on cost (unadjusted) is 10.22%. The assessee's operating margin on cost is 13.17% which is much above the arithmetic mean of the comparables. In the given circumstances, we are of the view that the price at which the assessee rendered services to its AE has to be considered as at arms' length and no adjustment on account of arms' length price (ALP) ought to have been made. We accordingly hold that the addition made by the Assessing Officer by way adjustment to ALP deserves to be deleted.
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