Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (5) TMI 1619 - AT - Income TaxTPA - selection criteria for comparables - applying of proper filter of turnover - Related Party Transaction (RPT) filter - Held that:- Both the parties have agreed in principle that 10 times of the assessee’s turnover on both sides shall be applied as a filter for selecting the comparable companies. For Related Party Transaction (RPT) filter TPO applied 25% RPT. We find that neither the TPO nor the assessee has found any difficulty in selection of comparable companies. The TPO has selected as many as 20 companies in the final set of comparables. Therefore this is a normal case of availability of comparables. Accordingly, in view of the consistent view taken by this Tribunal that in the normal circumstances, the RPT tolerance range shall not exceed 15%. Thus the comparability of the entire set of comparables has to be decided by applying the appropriate filter of turnover at 10 times of assessee's turnover on both sides and further RPT filter of 15%. We are of the considered opinion that the entire TP issue requires fresh examination and consideration at the level of TPO/A.O - set aside the TP issue including selection of comparables and functional comparability to the record of the TPO for consideration and adjudication. Computing deduction under Section 10A - AO took the total turnover of the assessee at entity level instead of the turnover of Export Oriented Undertaking (EOU) - Held that:- Assessing Officer took the total turnover of the assessee at ₹ 29.04 Crores whereas the turnover of the EOU undertaking is ₹ 22.88 Crores. Therefore we find that the Assessing Officer has not taken the total turnover of the EOU undertaking. In view of the above facts and circumstances of the case, we direct the Assessing Officer to consider the total turnover of the EOU for the purpose of computing the deduction under Section 10A of the Act. Deduction under Section 10A computation - AO has considered the entire cost of Employees Stock Option and RSU granted to the employees of the company by the holding company of the assessee - Additional ground - Held that:- There is no dispute that the claim made by the assessee in the additional ground was not raised either before the Assessing Officer or before the DRP. Therefore this is fresh plea raised by the assessee at this stage. So far as the legality of the issue is concerned, there is no bar for raising this legal issue at this level which is also covered by the decision of the Special Bench in the case of Biocon Ltd. Vs. DCIT (2013 (8) TMI 629 - ITAT BANGALORE). This issue also involves verification of the various facts and computation of deduction as it involves mixed question of law and facts and not a pure question of law - set aside this issue to the record of the Assessing Officer. - Appeal of the assessee is allowed for statistical purpose.
|