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2019 (3) TMI 1815 - AT - Income TaxTP Adjustment - Comparable selection - HELD THAT:- Excel Infoways Ltd was not considered as a comparable company for the reason that the profits of the company was declining and it was having super normal profits. The year-wise profit percentage would show that the same was consistently declining from 364.14% in FY 2009-10 to 0.43% in FY 2014-15. In view of the fluctuating profit, i.e., diminishing profit, the above said company was not taken as a comparable. Even though the D.R contended that the decision in the case of Emerson Climate Technologies (India) Pvt. Ltd, which was followed by the Pune bench of Tribunal in the case of Ocwen Financial Solutions P Ltd [2019 (1) TMI 1352 - ITAT PUNE] was related to different assessment year and further the functions of M/s Emerson Climate Technologies (India) Pvt. Ltd. were different, yet we are of the view that the principle laid down in the above said case with regard to diminishing revenue and fluctuating profit can be adopted in the instant case. Further the Ld A.R has pointed out that there is difference in the functions performed between the assessee company and M/s Excel Infoways Ltd. In view of the above, we agree with the contentions of the assessee that M/s Excel Infoways Ltd cannot be considered as a comparable company in the hands of the assessee. M/s R System International Ltd - We notice that the assessee has collated the financial results of the above said company for the financial year 01-04-2011 to 31-03- 2012. Further the details furnished by the assessee also show that this company cannot be categorised as persistent loss making company. Hence both the reasons given by the TPO to exclude this company would, in our view, fail. However the details furnished by the assessee require examination at the end of AO/TPO. Accordingly we restore this issue to the file of the AO/TPO for examining the details furnished by the company and if no fault is found with them, then the above said company should be considered as a comparable company. ALP of international transactions requires re-examination. Accordingly we restore the same to the file of AO/TPO for examining them afresh in the light of discussions.
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