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2014 (2) TMI 1347 - ITAT PUNETPA - Computation of net operating margins for the purpose of comparability of its international transactions - determination of net operating profits and operating revenues for the purposes of computing PLI of the assessee company - Held that:- No difference in approach between the assessee and the Revenue on the aspect of excluding any item of income or expenditure for the purposes of calculating PLI so long as such item of income/expenditure is not linked to the international transactions under review. Objection of the Revenue is quite misplaced inasmuch as the assessee had raised this plea before the TPO evidently inasmuch as the order of the TPO extracted above, is in response to such plea of the assessee. We are also satisfied that the no additional evidence within the meaning of rule 46A of the Rules has been accepted by the CIT(A) on this aspect inasmuch as the exclusion of income/expenditure canvassed by the assessee, are based on its financial statements, which are a part of record. Therefore, we find no justification for the Revenue to assail the directions of the CIT(A). Ostensibly, the aspect involves a factual appreciation of the material on record, and therefore, we hereby uphold the direction of the CIT(A) to the Assessing Officer to re-determine the PLI by excluding items of income/expenditure which are not linked to the international transactions in order to compute the PLI of the assessee. The Assessing Officer shall allow the assessee a reasonable opportunity to make submissions to support its stand and thereafter the Assessing Officer shall pass an order on this aspect in accordance with law. Thus, on this aspect, assessee succeeds for statistical purposes and the Revenue fails in its Grounds of Appeal. Disallowance of adjustment on account of difference in levels of risk assumed by the assessee vis-à-vis comparable companies - Held that:- Our attention was invited to the written submissions wherein assessee had raised the issue of working capital adjustment and also wherein the issue of allowing risk adjustment wa1s raised. The assessee pointed out that aforesaid two aspects have not been adjudicated by the CIT(A) and that they have a bearing on the determination on the final tax liability. The learned counsel also furnished a copy of the order of the TPO u/s 92CA(3) of the Act for the subsequent assessment year of 2006-07 wherein the plea of the assessee for allowing of adjustment on account of working capital differences has been accepted. It was therefore contended that omission to deal with such Grounds of Appeal by the CIT(A) is unjustified. Factually speaking, the points raised by the learned counsel for the assessee have not been controverted by the learned Departmental Representative appearing for the Revenue. In background of the aforesaid factual matrix, it is evident that the grievance raised by the assessee in terms of the Grounds of Appeal Nos. 9 and 10 have not been adjudicated by the CIT(A) and, therefore we deem it fit and proper to restore the same back to the file of the CIT(A) for adjudication afresh
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