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2015 (11) TMI 1729 - HC - Income TaxDetermining the net operating margin - Provision for stock obsolescence/inventory be excluded from the net operating expenditure of the Assessee for since it was an abnormal and extraordinary expenditure - adjustment to the value of import of raw materials - Held that:- Court is unable to discern any legal infirmity in the approach of the CIT (A) which was upheld by the ITAT in the impugned order. It is sought to be suggested that the Assessee makes a provision for stock obsolescence year after year and, therefore, this could not be treated as ‘extraordinary’ or ‘non-recurring’. However, when one peruses the order of the CIT (A) it is seen that the question was not whether the Assessee was claiming it only as a one-time measure but whether it was gaining any undue advantage in using this device as a measure for avoiding tax. Ultimately, the entire exercise of determining ALP for international transactions is to ensure that there is no avoidance of tax by an Assessee by resorting to an accounting device. The Court is unable to hold that the provision made for stock obsolescence by the Assessee resulted in any undue advantage to it. The comparability analysis undertaken by the CIT (A) which has been affirmed by the ITAT does not suffer from any legal infirmity. No substantial question of law arises
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