Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (3) TMI 304 - AT - Income TaxDetermination of ALP - international transaction carried out by the assessee with its AE - adjustment of ALP was deleted by the Tribunal - Held that:- Trading and manufacturing segment of the assessee are not distinct and are inter-related warranting combined transaction approach. TPO has arrived at the bifurcation of the manufacturing and trading segmental operating results. In view of our conclusions that the trading and manufacturing segments are interlinked and therefore a combined transaction approach has to be adopted, we combine the results so arrived at by the TPO. If the segmental results are combined, the operating revenue of the assessee would be 3767.91 crores and the operating profit would be ₹ 94.34 crores. Thus, the operating profit margin on sales would be 2.517. Even assuming that the adjustment on account of operational efficiency made by the TPO is to be accepted, then the combined margin after adjustment of the five comparables which is given in para-20 of this order, would be 7.10%. If the arithmetic mean of the five comparables as above is tested as against the operating profit margin on sales of the assessee at 2.517%, then the same would be within the (+)/(-) 5% range of the arithmetic mean and therefore no addition by way of adjustment to the ALP can be made. In this view of the matter, we are of the view that the addition sustained by the DRP deserves to be deleted and is hereby deleted - Decided in favour of assessee.
|