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2012 (12) TMI 482 - AT - Income TaxWhether amended provision of Sec. 92C(2) which was applicable w.e.f. AY 2009-10 are equally applicable to appeals pending relating to previous years Revenue in the present case to deny the assessee benefit for adjustment of +/-5% variation while computing ALP - Held that:- Though the amended proviso to sec 92C(2) was applicable w.e.f 1.10.2009 and following the decision in case of UE Trade Corporation India (P) Ltd. (2010 (12) TMI 224 - ITAT, NEWDELHI) it is a well-settled proposition that the statutory provisions as they stand on the first day of April of the assessment year must apply to the assessment of the year and the modification of the provisions during the pendency of assessment would not generally prejudice the rights of the assessee. Therefore, we find no justification in the action of the lower authorities in disentitling the assessee the benefit of +/-5% while computing ALP in terms of erstwhile proviso to sec 92C(2). Appeal decides in favour of assessee Adjustment of higher depreciation in calculation of ALP - Assessee has charged higher depreciation as compare to the rates prescribed under the Companies Act Assessee claims that such excess depreciation was liable to the excluded while benchmarking the financial results of the assessee with those of comparable cases Held that:- It was opined that the object and purpose of the transfer pricing is to compare like with the like and to eliminate differences, if any, by suitable adjustments. Therefore, it found justification on the part of the assessee in pleading that the profits be taken without deduction of depreciation. Allow adjustment after verification. Issue remand back to AO Adjustment of start-up cost in calculation of ALP Assessee is in 1st year of operation and due to start-up cost profit margins are abnormally affected - Capacity utilization was not satisfactory Held that:- Following the decision in case of Skoda Auto India P. Ltd.(2009 (3) TMI 249 - ITAT PUNE-A) as the plea set-up by the assessee for economic adjustments on account of under capacity utilization and being in start-up phase, is not something which is unreasonable and neither it is otiose to the mechanism of transfer pricing assessments. The matter requiring factual appreciation, the same is to calculated on reasonable basis. Therefore remanded back to the file of the AO No. of years for which financial data used to compute ALP of comparable companies - TPO in using the financial data of the comparable companies available at the time of assessment and that too only for the single year pertaining to the year under consideration - Assessee of having carried out the transfer pricing study on the basis of the financial data of the comparable companies for the prior two years Held that:- Apart from making a generalized submission, such onus has not been discharged by the assessee on the basis of any credible or cogent material. In the absence of any substantive material being brought out by the assessee to justify the use of multiple data of prior two years and the manner in which it would influence the determination of transfer pricing in relation to the impugned international transaction. Issue decides in favour of revenue.
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