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2016 (8) TMI 1187 - HC - Income TaxTransfer pricing adjustment - selection of comparable - Held that:- The assessee was involved only in software development. Considering widely fluctuating and erratic results of the company the Tribunal found that it would be unsafe to assess arm’s length price based on TNMM taking into account the results of Bodhtree Consulting Ltd. company. We do not find the decision of the Tribunal gives rise to any substantial question of law. E-Infochip Bangalore Ltd - Tribunal merely considered whether in absence of segmental information available with respect to E-Infochip Bangalore Ltd., the margin of such company could have been considered by the TPO. This issue completely ignores the fundamental question whether E-Infochip Bangalore Ltd. was engaged in any services other than software development services. Only if answer to the question was in the affirmative, the question of availability or non-availability of segmental information would arise. The Tribunal thus without overruling the finding of the TPO, without giving any specific finding of its own much less recording the reasons, proceeded to hold that in absence of segmental information E-Infochip Bangalore Ltd. must be excluded from consideration, directed exclusion of E-Infochip Bangalore Ltd. We find that the Tribunal has committed a serious error. Tribunal’s directions to exclude E-Infochip Bangalore Ltd. from working out the transfer pricing, the judgment is reversed.
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