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2021 (3) TMI 1316 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- It is pertinent to note that the comparables which were argued by the assessee to be excluded as a functionally dissimilar cannot be simplicitory included - as seen from annual report and the documents provided by the assessee before us that the functional profile was not properly verified by TPO / AO. Thus, it will be appropriate to direct the TPO to exclude these three comparables i.e. M/s Aptico Ltd.; Axis Integrated System Ltd. and Killik Agencies and Marketing Ltd. As regards the inclusion prima facie after seeing the documentation of all the three companies it can be seen that the functional profile of each of the company were not exactly similar to the assessee company and besides that there are filters which was taken into account by the TPO during the reference proceedings has not been properly sufficient and comparable to the assessee company. Though the assessee pointed out that these companies have to be included, it needs proper verification as the data before us cannot convey as to how these comparables has to be accepted. Therefore, it will be appropriate to remand back the inclusions to the file of the TPO / Assessing Officer for through verification of these comparable companies and if found comparable, the same should be taken into account. Working capital Adjustment - As issue from the perusal of the order of the TPO / Assessing Officer it can be seen that the computation of the working capital adjustment was not properly done and the same has to be done in accordance with the ALP margins. Therefore, we direct the TPO / Assessing Officer to re-compute the working capital adjustment as per the ALP margins.
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