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2017 (1) TMI 1623 - AT - Income TaxTPA - comparable selection - Held that:- In the light of submissions advanced by both the parties, if result in respect of three comparables viz. (i) Cambridge Technology Enterprises Ltd., (ii) Powersoft Global Solutions Ltd., (iii) SIP Technologies & Export Ltd. can be drawn corresponding to the financial year ending on March, 2006 then only these three comparables should be included otherwise they have to be excluded from the list of comparables. Similarly, in regard to Systemlogic Solutions Ltd., ld. TPO should examine the assessee’s contentions, as noted above. If the same is found to be correct then to exclude this comparable from the list of comparables. In the result, this ground is allowed for statistical purposes in terms of aforementioned observations. Working capital adjustment - Held that:- matter may be restored back to the file of ld. Assessing Officer/TPO for examining the assessee’s plea and to allow the working capital adjustments. After hearing both the parties, this additional ground is admitted for examining the assessee’s contentions. This ground is also allowed for statistical purposes. Comparable selection - Held that:- From the TPO’s order for the assessment year 2006-07, it is evident that Goldstone Technologies Limited and Computech Information Ltd. were included in the final list of comparables. However, no reason has been assigned for excluding these comparables from the final list of comparables for assessment year 2007-08. Unless any functional dissimilarity had arisen in assessment year 2007-08 in respect of these two comparables, which warranted exclusion of these two comparables, they should not have been excluded particularity in view of the principle of consistency. We, therefore, restore this matter to the file of the ld. Assessing Officer/ TPO to examine the assessee’s contentions in the light of functional dissimilarity of these comparables and, if, the same are found to be in line with the assessee then these two comparables have to be included to the list of comparability. In the result, this ground is allowed for statistical purposes. Computation of Net Cost Plus (“NCP”) margin of selected comparable companies - Held that:- We direct the ld. Assessing Officer/TOP to compute the operating income of assessee by including foreign exchange gain as operating income of assessee. Thus, this ground is allowed.
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