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2022 (9) TMI 1505 - ITAT BANGALORETP Adjustment - comparable selection - HELD THAT:- Metro Shoes Ltd. wherein trading income as a percentage of the total revenue is more than 25% - TPO has applied trade filter of 75% while selecting fresh comparable companies and according to the above working the company fails the trade filter of more than 75%. We further notice from the financials of Metro Shoes Ltd., that the company has paid customs duty. We do not see any merit in the contention of the DRP that Metro Shoes is also primarily engaged in trading of footwear similar to the business of the assessee while rejecting the plea of the assessee on the application of trade filters. In view of this discussion we hold that Metro Shoes fails the trade filter of more than 75% and therefore should be excluded from the comparable companies. Sreeleather Ltd is engaged in both wholesale and retail trading of footwear and leather articles - We notice that Rule 10B(2)(d) of the Act, the relevant extract is reproduced below provide that the company is in the wholesale trading and retail trading have to be considered separately for the purpose of comparison and for the purpose of comparability with an uncontrolled transaction, whether the market in which the companies are operating is wholesale or retail needs to be considered - In view of the above and considering the provisions contained in Rule 10B (2)(d) we are of the considered view that Sreeleather Ltd. should be excluded as comparable. VF Brands Pvt. Ltd. and Tommy Hilfiger Arvind Fashion Pvt. Ltd. - As per the working submitted by the learned A.R. during the course of hearing the margin of VF Brands Pvt. Ltd. is at 12.07% while the TPO has considered it at 14.56%. Similarly the margin as per computation submitted for Tommy Hilfiger Arvind Fashion Pvt. Ltd. is at 3.23%. The TPO has considered the percentage at 8.24%. We therefore remit this issue back to the TPO to look at the financials of these two companies and arrive at the margins afresh in accordance with law. This issue is allowed for statistical purposes. TPO is directed to re-compute the ALP based on the directions given in this order.
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