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2013 (12) TMI 140 - ITAT MUMBAITransfer pricing adjustment - Held that:- The relevant points raised on behalf of the assessee do not find any mention or proper discussion in DRP's direction which it is obliged to do so. The DRP is a quasi judicial authority and when dealing with a lis pending before it, it is obligatory on its part to ascribe cogent reasons as to why the assessee's contentions are not acceptable. In the present case, no such finding or reasons have been given in its order - All the issues raised in the appeal are restored for fresh adjudication. Transfer pricing adjustment - Held that:- The difference in capacity utilization affects the profitability mainly because of the difference in rates at which the fixed overheads are absorbed or allocated depending on the level of capacity utilization - If the fixed overheads allocation or absorption of comparable is brought at the level of the assessee, it would nullify the effect of difference in capacity utilization on the profit margin - If the depreciation in case of a comparable is allowed at the same rate of its operating cost instead of the actual depreciation claimed, if it is lower, this adjustment, will take care of difference in capacity utilization - The order of CIT(A) is set aside for the A.Y. 2008-09.
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