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2016 (5) TMI 1491 - AT - Income TaxTP adjustment - comparable selection - emphasis on product comparability - HELD THAT:- It would have been better if the TPO had dealt the issue raised by the DRP rather than challenging the jurisdiction of the DRP. It is a fact that the two comparable companies were not dealing in the same product as that of the assessee. Therefore, they were at par with the other four comparables. In the TNMM what is to be seen is functional comparability and not the product comparability. If the TPO wanted to emphasis on product comparability, then he should not have accepted the remaining two comparables. Considering the above, we are of the opinion that the order of the DRP does not suffer from any infirmity. First effective Ground (GOA 1 & 2) is decided against the AO. Allowance of claim of bad debts - HELD THAT:- Assessee had written off ₹ 39,056/- only in the books of account during the year under consideration, whereas an amount of 12.40 lakhs was written back. It appears that the TPO without understanding the difference between the writing back of balance and writing off the balance had made the adjustment. The balance written back was offered for taxation by the assessee. Therefore, we fail to understand that how the TPO proposed the adjustment. DRP had rightly deleted the addition but we are surprised to notice that in such a straight case the department has decided to file an appeal. It shows lack of judicial discretion on part of the officers who have recommended/approved the appeal. Such frivolous appeal not only waste the time of the Tribunal, but also increase the burden of the DRs unnecessarily. In our opinion, there is no need to interfere with the order of DRP. So confirming its order we decide second effective ground against revenue. Working capital adjustment - HELD THAT:- As far as the request of the assessee to consider ₹ 39,056/- as working capital adjustment, we would like to state that same could be granted as it has already suffered taxation.
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