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2012 (11) TMI 988 - AT - Income TaxDetermination of Arm's Length Price - Transaction with Associate Enterprises - In the present case Assessee has adopted "Transactional Net Margin Method" as most appropriate method for determining its ALP of international transaction. It had used six comparable companies for bench marking its ALP on international transactions. However, out of six, the TPO rejected three comparables on the ground that their related party transactions were either more than 15% or turnover was more than Rs. 1,500 crore - TPO introduced his set of fresh nine comparables to bench mark the ALP of international transaction of the assessee. The arithmetic mean of the PLI of the 12 comparable companies (three of assessee and nine of TPO) worked out to 5.34%. Held that:- Value of international transaction of the assessee falls within safe harbour of +/- 5% of the ALP determined by the TPO. Accordingly, on this preliminary ground alone, the adjustment of Rs. 3,70,87,177 made towards ALP by the Assessing Officer is uncalled for and the same is hereby deleted - grounds raised by assessee are allowed. The contention of the revenue that adjustment arising our of ALP has to be made on the entire turnover instead of restricting the same to the international transaction with the A.E - Decided in favor of assessee. Disallowance of Expenditure on Computer Software - held that:- insofar as the directions on account of AMC for maintenance of software given by the DRP is concerned, the same appears to be very reasonable and no interference is called for - However, with regard to the other expenditure, the Assessing Officer is directed to verify this contention of the assessee in the light of the decision of the Special Bench of the Tribunal, Delhi, rendered in Amway India Enterprises v. DCIT, [2008 (2) TMI 454 - ITAT DELHI]- Thus, this ground is partly allowed for statistical purposes. Disallowance of Depreciation on laptop purchased - held that:- Assessee could not produce evidence for purchase of laptop - no merit in the contention of the assessee and the same is dismissed - Thus, this ground is dismissed.
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