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2017 (9) TMI 1890 - AT - Income TaxTP Adjustment - comparable selection - CIT- A accepting Brescon Corporate Advisors Ltd. (“Brescon”) as a comparable to the appellant by holding that the activities performed by Brescon are similar to the activities performed by the appellant - TPO has accepted TNMM as the most appropriate method for benchmarking the international transactions - HELD THAT:- As decided in own case [2017 (2) TMI 1389 - ITAT DELHI] we are of the considered view that Brescon Corporate Advisors Ltd. introduced by the TPO and retained by ld. CIT (A) in the final list of comparables is not a suitable comparable, hence ordered to be excluded from the list of comparables. Integrated Enterprises India Limited - We are of the considered view that when a specific prayer has been made by the assessee to admit additional evidences in the form of financial data which was not available in the public domain during the TP proceedings before TPO, it was imperative on the part of ld. CIT (A) to pass an order on the application for additional evidence and to examine the suitability of comparable sought to be included by the assessee for benchmarking its international transaction. We set aside this issue to the ld. CIT (A) to decide afresh the suitability of the comparability of the Integrated Enterprises India Limited after allowing the application for additional evidence - additional ground is determined in favour of the assessee. Bonus paid to the employees by invoking provisions contained u/s 36(1)(ii) - HELD THAT:- As decided in own case [2017 (2) TMI 1389 - ITAT DELHI] deduction u/s 36(1)(ii) in respect of payment of bonus to the aforesaid shareholder/Director who are also major shareholder in the company with 50% shareholding of each is allowable deduction as there is no change in the shareholding pattern during the year under assessment - Decided in favour of the assessee. M/s. Keynote Corporate Services Ltd. - Only the shareholding pattern of M/s. Keynote Corporate Services Ltd. is changed with amalgamation which has not affected the profit. However, this contention is not tenable in the face of uncontroverted fact that the profit margin of assessee company has raised up to 145% during the year under assessment which is extremely volatile and abnormal and is due to the amalgamation and merger. Moreover, launch of ESOP Division which focused on designing and implementing stock option scheme for corporate, the business model of comparable company has undergone a change. So, we are of the considered view that the ld. CIT (A) has rightly excluded M/s. Keynote Corporate Services Ltd. as unsuitable comparable.
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