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2011 (11) TMI 464 - ITAT BANGALORETransfer Pricing Adjustment – determination of ALP margin by Revenue on basis of detailed analysis of the assessee's and the TPO's approach to selection of comparable data - assessee contested agianst Satyam Computers Services Limited accepted as a comparable – Held that:- Various Tribunals have taken note of the fact that Satyam cannot be accepted as a comparable on the ground that it was publicly known that its financial statements were not reliable. See case of Agnity India Technologies (P.) Ltd. [2010 (11) TMI 852 - ITAT DELHI]. Hence, this plea of the assessee is allowed. Rejection of comparable companies with margins less than 6% (Including comparable companies with negative margins) – Held that:- The Tribunal was of view that extreme cases should not be included as comparables and thus has taken a conscious decision in excluding companies having margin less than 6% from the comparables on facts and circumstances of the case. Hence, this plea of the assessee is rejected. Request for Risk Adjustment at 5.25% - Held that:- It is not clear as to how the assessee had arrived at relief of 5.25%. However, ITAT has allowed benefit of deduction of 5% under proviso to section 92C(2) and in view of the decision in case of Symantec Software Solutions (P.) Ltd. v. Asstt. CIT (2011 (5) TMI 107 - ITAT MUMBAI) no separate adjustment is required on account of risk functional difference. Therefore, this plea of the assessee is dismissed. Computation of the arm's length range – Held that:- When there are two prices determined by the most appropriate method, the first step is to take the arithmetical mean of such prices as ALM. Assessee has the option to adjust the above ALM by ±5%. However, in present case the arithmetical mean of two prices (price determined by A.O. & assessee) has not been done. For this purpose, this issue is restored to the file of the AO, who shall in turn, may refer the matter to the TPO - Decided partly in favor of assessee.
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