Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (10) TMI 364 - AT - Income TaxAdjustment made by the TOP/AO - computation of Arms Length Price in respect of international transactions entered with Associated Enterprises - CIT(A) deleted the addition for AY 2004-05 - Held that :- The assessee has worked out its margin of 8.85 per cent and TPO has worked out the margin at 13.30 per cent, and as is evident from the proviso to Section 92C(2) of the Act that if the variation between the ALP and the actual transaction price does not exceed 5 per cent of the latter , the transaction price is to be accepted and no adjustment is required to be made. Since the difference in the Arm's length margin as determined by the TPO and the actual transaction price does not exceed five per cent, we hold that no adjustment is required to be made as it is within 5 per cent range of ALP - against revenue. CUP method as adopted by the assessee is not justifiable - Deletion of addition by CIT(A) for ALP in AY 2005-06 - Held that:- Assessee in its transfer pricing study to TPO stated that it has selected CUP method as the primary method in AL analysis & that assessee charged higher rate from its AEs that what it charged from third party. The department has also not brought any evidence on record to controvert the submissions of assessee that the services rendered to the AEs and third parties are of similar type and operate in the same geographical region - assessee has submitted before the TPO as well as before the authorities below that AEs as well as third party are located in the same region and availing similar services and the department has not brought any evidence on record to controvert the same contention of assessee. Hence, ld D.R. has no merit to find fault with the order of CIT(A) that CUP method as adopted by the assessee is not justifiable. In view of above facts, we hold that ld CIT(A) has rightly held that AO/TPO has not brought out a case for making any adjustment on account of ALP - in favour of assessee. Disallowance of set off the loss from one 10A unit against the taxable profits from the other 10A units and non-10A unit - Held that:- As decided in Hindustan Unilever Ltd v. Dy. CIT [2010 (4) TMI 206 - BOMBAY HIGH COURT] assessee had all the four units of the assessee were eligible under Section 10B. Three units had returned a profit during the course of the assessment year, while the Crab Stick unit had returned a loss. The assessee was entitled to a deduction in respect of the profits of the three eligible units while the loss sustained by the fourth unit could be set off against the normal business income - it is plain and evident that the deduction under section 10A has to be given at the stage when the profits and gains of business are computed in the first instance - in favour of assessee.
|