Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2013 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (9) TMI 231 - AT - Income TaxTransfer price - ALP - corporate additions - selection of Comparables for Transfer pricing transactions – Held that:- The company selected by TPO namely Semac – The details of the Semac ought to have been provided by the TPO for consideration of assessee, in order to include it as a valid comparable – Again, Comparable Kitco submitted by Assessee should not have been excluded as other comparables are included by TPO on same parameters - Natural justice i.e. justice, equity and fair play have not been complied with in selection of comparables, hence the issue of TP adjustments restored back to the file of TPO to address these issues and pass a speaking order in accordance – Decided in favor of Assessee. Whether the loss/gain arising on fluctuation of exchange is allowable as deduction/additions in the year of fluctuation of exchange rate or whether the same could be allowed only in the year of repayment – Consistency to be maintained in the form of book keeping - Held that:- assessee in respect of foreign exchange realization follows mercantile system of accounting and not cash system of accounting. The loss has been incurred for hedging of foreign currency fluctuation involved in sales invoices on the basis of forward contracts, which is a business decision to safeguard its interest. The loss has been incurred on the basis of scientific method in the ordinary course of business. The loss being based on a scientific method, on the basis of contractual liability with banks and on mercantile system has to be allowed to the assessee following Hon'ble Supreme Court judgment in the case of Woodward Governor India (P.) Ltd. [2009 (4) TMI 4 - SUPREME COURT] - Allowability of the loss on actual payment in A.Y. 2009-10 has been made subject to the allowability of the loss for AY. 2008-09. This stand of the DRP itself negates the observations of assessing officer that it is a notional loss and establishes that it is a business loss incurred by the assessee on mercantile system which method is consistently followed by the assessee - Allowed the foreign exchange fluctuation loss to assessee in this year – Decided in favor of Assessee.
|