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2018 (8) TMI 1928 - AT - Income TaxTP Adjustment - selection of comparable - functional similarity - HELD THAT:- Assessee's international transaction relating to provisions of services to its Associated Enterprises is providing consultancy services - assessee has adopted the transactional net margin method to benchmark its International transactions, thus companies functionally dissimilar with that of assessee need to be deselected from final list. Comparables to be excluded which have been directed by the DRP to be included as canvassed by the ld. Counsel of the assessee are Coral Hubs Ltd., Eclerx Services Ltd., Accentia Technologies Ltd. and Cosmic Global Ltd. Write off of fixed assets as non operating expenditure - HELD THAT:- We find that the item of fixed assets write off is not a normal expenditure. It cannot be equated with depreciation. Hence, the direction of the DRP that the same is non operating item and should be excluded from the calculation of the profit margin, is liable to be sustained. Furthermore, the DRP has directed that if there is similar write off of fixed assets in any of the comparables finally considered, the TPO is directed to exclude such costs from the comparables also. Thus, in our considered opinion, is fair and reasonable direction and does not need any interference in our part.
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