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2016 (8) TMI 1321 - AT - Income TaxTPA - comparability analysis - Held that:- The assessee is a company incorporated under the Companies Act, 1956 and is wholly owned subsidiary of Akamai Technologies Inn., USA. The assessee provides back office support services and related IT enabled services (ITES) to its AE, which includes voice based support services, voice/non-voice based technical support services, invoice processing, accounts receivables and collection processing, thus companies functionally dissimilar with that of assessee need to be deselected from final list. Determination of ALP - foreign exchange fluctuation income arising from the sales realization exclusion from operating profit - Held that:- The foreign exchange gain or loss arising from the export turnover realization would be part of the operating profit of the assessee as well as the comparable company. Therefore, foreign exchange fluctuation income arising from the sales realization cannot be excluded from the operating profit for the purpose of determining arms length price. However rule of parity has to be maintained by considering the gain or loss on account of foreign exchange fluctuation in the cases of comparable also. Benefit of second proviso to sec. 92C for considering the tolerance range of + 5% - Held that:- The benefit of the proviso is available if the price of the international transaction of the assessee is within the tolerance limit of + 5% of the comparable price determined by the TPO. Accordingly, we direct the AO/TPO to consider the benefit of proviso to sec. 92C if the price of the assessee is within the tolerance range as provided in the said proviso.
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