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2011 (7) TMI 964 - AT - Income TaxArm's length price - International transaction - TPO suggested upward revision by an amount of Rs. 18,22,82,026/-- assessee contested against non consideration of capacity utilization data provided by him - Held that: The turn over of the assessee has declined significantly in respect of the product named "Avaunt" which had happened because of utilization of BT cotton seeds by the farmers, which require very few sprays for controlling boll-worms. It is a matter of fact that fixed costs remain the same even when there is under utilization of capacity. Therefore, the case of the assessee and the comparable cases have to be examined in respect of capacity utilization so as to make the controlled and uncontrolled transactions comparable - restore this matter to the file of the AO to consider the matter afresh and work the adjustment to be made in this respect by way of a speaking order to be passed after hearing the assessee. Grant of 5% deduction from the main PLI of the comparable cases can be decided by the Assessing Officer after deciding the aforesaid issue and also the interest chargeable u/ss 234B, and 234C as per the tax payable computed after making the assessment.
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