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2016 (11) TMI 1605 - ITAT PUNETPO - Comparable selection - inward Technologies Ltd. has been wrongly excluded from the list of comparable, therefore, the same should included in the list of comparables - AR prayed for excluding from the list of comparables Tata Technologies Ltd. having operating margin of 31.18% on the ground of high profit making company - Held that:- There is no dispute in respect of settled position that the consistent loss making company has to be excluded from the list of comparables. A company is said to be consistent loss making when the company has incurred losses in the three consecutive financial years including the financial year in which the international transactions have been made. In the instant case Financial Year 2009-10 is relevant to the assessment year under appeal. Thus, the financial years to be considered for determining whether the company is consistent loss making are financial years 2007-08, 2008-09 and 2009-10. A perusal of the profit and loss account of Onward Technologies Ltd. placed on record shows that the said company has suffered losses in financial years 2007-08, 2008-09 and 2009-10. Thus, it is evident from the perusal of the financial results of Onward Technologies Ltd. that Onward Technologies Ltd. is consistent loss making company, therefore, the said company cannot be considered as a good comparable. Exclusion of Tata Technologies Ltd., the ld. AR has not substantiated as to how the said company has abnormal profits. We do not find any merit in the appeal of the assessee and the same is dismissed.
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