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2018 (8) TMI 2130 - AT - Income TaxTP Adjustment - Segregation of services - Assessee furnished separate set of comparables for “Trading Segment” and “Services Segment” - TPO determined ALP of the transactions by segregating the services rendered by the assessee company into two different segments, viz., “Trading segment” for supply of materials and “Services segment” for services actually rendered - DRP also upheld the same - According to the assessee, both are composite services and hence the TPO was not right in determining ALP separately for Products and Services - HELD THAT:- As rightly pointed out by Ld D.R, we are of the view that this specific contention of the assessee requires examination at the end of AO/TPO, since these aspects have not been taken into consideration by them while determining the ALP of the assessee. The co-ordinate bench of Tribunal, in the cases relied upon by the assessee Boskalis International Dredging International [2014 (7) TMI 866 - ITAT MUMBAI] AND Gates India (P) Ltd [2017 (8) TMI 282 - ITAT DELHI] has expressed the view that the closely linked transactions/composite transactions have to be examined together. Since this contention of the assessee goes to the root of the issue, we are of the view the same needs to be examined at the end of AO/TPO. Accordingly we set aside the matter relating to determination of ALP of the transactions entered by the assessee with its AE to the tile of AO/TPO for examining them afresh by duly considering the various contentions of the assessee. Direct expenses computation for the purpose of computing gross profit margin - Decision of TPO in including liquidated damages as part of direct expenses - D.R submitted that the liquidated damages have been incurred by the assessee in connection with rendering of services and accordingly submitted that the TPO has rightly included it as part of direct cost - HELD THAT:- As relying on Emerson Process Management (India) (P) Ltd. [2012 (9) TMI 42 - ITAT MUMBAI] liquidated damages cannot be considered as direct cost for the purpose of computing Gross profit margin. Delayed employees’ contribution to PF and ESI - amount not been remitted within the due date prescribed in the respective Acts - A.R submitted that he has paid the same within the due date prescribed for filing return of income u/s 139(1) and hence the same is allowable as deduction as per the decision of CIT vs. Ghatge Patil Transports Ltd [2014 (10) TMI 402 - BOMBAY HIGH COURT] - HELD THAT:- We set aside the order passed by the AO on this issue and direct the AO to allow the deduction after satisfying himself that the impugned employees contribution have been remitted before the due date prescribed u/s 139(1) of the Act for filing return of income for the year under consideration.
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