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2014 (8) TMI 1035 - AT - Income TaxTransfer pricing adjustment - selection of comparable - Held that:- UTV Software Communication should be included in the list of comparables. However, we find that in the order of TPO, as per submission of the assessee UTV Software Communication was having PLI of (-) 2.64%. However, in the submissions made before us such margin has been taken as (-) 3.81%. Thus, there is a variation in computing the PLI of UTV Software Communication. Though this would also not make much difference as the difference between the PLI of the assessee and arithmetic mean of final comparable even after this difference & other minor adjustment with regard to depreciation etc. which is dealt elsewhere in this order will be within the safe harbour of +/- 5%, however, for the purpose of verification of the PLI of UTV Software Communication we restore this issue to the file of TPO and we direct that if after including UTV Software Communication in the list of comparables and after adjustment on account of depreciation, which is dealt elsewhere in the order, difference between the PLI of the assessee and arithmetic mean of the comparable parties is within the safe harbour of +/-5%, then no addition on account of TP adjustment should be made. Adjustment on account of depreciation - Applicability of rule 10B(1)(e)(iii) - Held that:- We direct the TPO to adopt the adjusted profit margin of the comparables as well as assessee after brining at par the treatment of the claim of depreciation. This exercise has been done by TPO in the remand proceedings and those figures should be adopted for the purpose of computing arithmetic mean of the margin of the comparables and the profit margin of the assessee Computation of PLI - Held that:- A uniform approach has been adopted by the TPO in respect of computation of PLI in the case of assessee as well as in the case of comparables. If the uniform approach is adopted, unless any contrary material has been brought on record, we see no infirmity in such basis of the calculation.
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