Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (6) TMI 321 - AT - Income TaxTransfer pricing adjustment - rejection of benchmarking approach adopted/contemporaneous documentation maintained by the appellant - selection of comparable - Held that:- From the results of Bodhtree Consulting Ltd. it is seen that there is drastic fluctuation in the operating margins with a high of 80.15% in F.Y. 06-07 and low of -4.46% in F.Y. 10-11. We find that Special Bench of Tribunal in the case of Maersk Global Centres India Pvt. Ltd. [2014 (3) TMI 891 - ITAT MUMBAI] had considered a question as to whether companies having abnormal profits should be excluded as a comparable & took the view that it has to be shown that the high profit margin does not reflect the normal business conditions and only in such circumstances high profit margin companies can be excluded. The results of Bodhtree from F.Y. 2003 to 2008 excluding F.Y. 2007 shows, that there has been a consistent change in the operating margins. Also see PTC Software (India) Pvt. Ltd (2015 (1) TMI 466 - ITAT PUNE) E-Infochip Bangalore Ltd.'s annual accounts of the company, with respect to the segment information it is stated that the company is primarily engaged in software development and I.T enabled services which is considered the only reportable business segment as per Accounting Standard AS-17 “segment reporting” prescribed in Companies (Accounting Standard) Rules, 2006. We thus find that no segmental information is available, thus to be excluded from the list of comparable. Thus restore the issue back to the file of A.O/TPO, who after excluding the aforesaid 2 companies rework the addition - Decided in favour of assessee for statistical purposes.
|