Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (4) TMI 263 - AT - Income TaxDetermining the average profit margin under the TNMM method - comparable - assessee stated that the companies which are showing loss are to be considered as comparable for determining ALP - CIT(A) observed that the financial results of the company used for comparable by TPO are shown for 15 months period and direct report of this company clearly stated that due to abnormal circumstances during the year, profits were adversely affected - due to the extra expenses, the probability of the company has been adversely affected - CIT(A excluded the results of loss making companies for the purpose of determining profit margin - Held that:- The determination of the ALP is depended upon the facts of a particular case - selection of comparables should be based on functional, asset and risk analysis of both the parties and the transactions - The underlying principle being that only likes can be compared with the like -the result of mentioned companies is not considered as comparables with the assessee's company transactions on the reason that the datas of these companies are not comparable with the assessee's company - If a reasonable accurate adjustment for the difference to eliminate material effect of the differences cannot possibly be made, then such comparables (uncontrolled) are to be rejected
|