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2013 (11) TMI 772 - AT - Income TaxAdjustment of arm's length price - Internation transaction with associated enterprise - Rejection of comparables - Held that:- The TPO has come to a wrong conclusion that 25% employee cost filter is not satisfied by excluding the cost of outsourcing incurred by this company. The fact remains that this company has never outsourced any of the project. The conclusions of the TPO are therefore erroneous. This company is therefore directed to be accepted as a comparable company. From a perusal of the formulae which has been advocated by the OECD shows that unbilled revenues and advance from customers have to be taken into account while working out the working capital adjustment. The TPO's computation as done at page 161 of the order shows that he has not considered the aforesaid items pointed out by the Assessee. We are of the view that it would be just and appropriate to set aside this issue to the TPO and direct him to consider this objection in the set aside proceedings as the same has not been considered by the TPO or the DRP.- AO directed to work out the ALP as per directions - Decided in favour of assessee.
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