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2014 (11) TMI 1275 - AT - Income TaxTP Adjustment - ALP determination of international transaction - allocation of expenses - segment wise account rejected as assessee did not maintain segmental accounts contemporaneously - HELD THAT:- In our opinion the segment wise account submitted by the assessee could not be rejected unless any defect was pointed out in the segmental results shown by the assessee. Moreover, the activities relating to both these transactions are different activities as is observed from the functional analysis described in the above part of this order as one transaction is relating to communication network operation and engineering services and other transaction relates to provision of finance and accounts services, therefore, these transactions are to be evaluated separately for determination of ALP. If the claim of the assessee is to be rejected then Revenue Authorities are bound to explain that why such claim of the assessee is required to be rejected. No such reason has been given except stating that either the segmental results are unaudited or they have been prepared later on or for the purpose of TP study. Taking into account these facts and submissions which are supported by the case laws relied upon by Ld. AR, we are of the opinion that it would meet the interest of justice if the matter is restored back to the file of AO/TPO with a direction to re-determine the ALP of these international transaction separately after verifying the segmental results of the assessee. Needless to observe that in the whole process of re-determination of ALP with regard to impugned transactions, the assessee will be provided with reasonable opportunity of hearing and placing evidence on record to support its case. After re-determination of ALP of the impugned international transaction in the manner described above, Ld. AO/TPO will give appropriate relief as per proviso to section 92C(2) as it is applicable for the year under consideration after giving the assessee a reasonable opportunity of hearing.
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