Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2011 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2011 (12) TMI 225 - AT - Income TaxTransfer Pricing – adjustment in ALP by TPO – non-vessel owning international clearing and forwarding company – assessee contention that cases of Blue Dart Express Ltd., Gati Ltd. & Allcargo Global Logistics Ltd. are not comparables to assessee - rejection of comparables taken by the assessee without justification – Revenue have not followed the order of the CIT (Appeals) for A.Y. 2005-06 decided in favor of the Assessee, allowing 100% deduction for trademarks fee - Held that:- Assessee is engaged as non-vessel owning international clearing and forwarding company, whereas Blue Dart Express Ltd., Gati Ltd. & Allcargo Global Logistics Ltd., are basically courier and integrated operation companies, carrying out their operations with owned airplanes, trucks and other transport assets. Besides, the size of these companies in terms of operating fixed assets as well as the capital investments are remarkably incomparable to assessee's business model. Thus, these differences make aforesaid companies incomparable to assessee. Comparables provided by the assessee are fairly comparable with assessee's business model in terms of services, size of the company, FAR analysis, OP/OC receipt to companies. Assessee's operating profit of 5.14% is equal or more than these three companies, therefore, assessee has demonstrated a fair ALP adopted in its T.P. Report. TPO erred in not allowing the adjustment in respect of technical know how fee, whereas in earlier years similar adjustment was allowed. Principle of consistency should be followed. Besides, the adjustment on account of depreciation also is uncalled for. Further, second proviso to sec. 92C(2) clearly provides that if the assessee's TP adjustments fall within (+) (-) 5%, in that case no addition or further adjustment are called for. Therefore, assessee' transfer pricing is upheld and adjustments as retained by DRP are deleted. - Decided in favor of Assessee.
|