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2013 (11) TMI 1413 - AT - Income TaxSelection of comparables Held that:- The event management division of Saket Projects Limited was taken as comparable - The event management was done by sponsorships in the case of assessee which is evident form various documents placed - Further the segment allocation of expenses also appears to be not reliable - In the case of Saket Projects Ltd. there is functional dissimilarity - When direct comparables are available then segmental results of companies engaged in other business should not be taken as comparable Decided in favour of assessee. Non-operating income Held that:- While computing operating margin under TNMM non-operating income is not to be considered The TPO is directed to exclude miscellaneous income of ICRA Mannagement Consultancy Services The nature of such miscellaneous income could not be defined with the documents available The issue was restored for fresh decision. Overstated profit of comparable Held that:- On perusal of the Audit Report of the comparable company - There was an abnormality in the accounts of comparable Education Consultant (P) Ltd. overstating the profit to the tune of ₹ 2.72 crores This abnormal profit needs to be adjusted while working out the OP/TC in this account of comparables The issue was restored for fresh decision. Foreign exchange difference Held that:- The issue was no more res integra Following ITAT, Bangalore Bench in the case of SAP Labs India (P) Ltd. vs. ACIT [2010 (8) TMI 676 - ITAT, BANGALORE] - The foreign exchange gain is an integral part of the sale proceeds of an assessee carrying on an export business - This income should not be excluded from the computation of the operating margin of the assessee company Decided in favour of assessee. Risk profile and working capital adjustment Held that:- No risk adjustment can be allowed when the same has not been quantified - The assessee has failed to bring any evidence on record to show that there was any difference in risk profile of comparable companies If difference in the risk results into deflation and inflation of the financial results of comparables adjustment can be made on this fact - The assessee has also failed to establish any working capital difference Decided against assessee. Arms length Range Held that:- As per amendment inserted by the Finance Act, 2012 retrospectively - Benefit of +/- 5% under the Proviso to section 92C(2) of the Act shall not be allowed for the purpose of computation of arms length price Decided against assessee. Depreciation on computer peripherals Held that:- Following Commissioner of Income Tax vs. BSES Yamuna Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT] - Computer accessories and peripherals such as, printers, scanners and server etc. form an integral part of the computer system - The computer accessories and peripherals cannot be used without the computer - Depreciation @ 60% on such items shall be allowed Decided in favour of assessee. Professional consultancy fee Held that:- The DRP has directed the Assessing Officer to verify the claim of the assessee and allow deduction if the TDS has been deducted - The direction of the DRP is upheld Decided against assessee.
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