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2016 (7) TMI 321 - AT - Income TaxTransfer price adjustment - payment of subsidiaries - Pass through cost consideration for arriving at operative profit or operating profit margin of the assessee - Held that:- As it is an admitted fact that the assessee itself included the pass through cost in its Profit and Loss Account. It is not the case of assessee that it is charged only mark up receivable from A.E in its P&L A/c. It is also admitted fact that assessee raised bills upon its A.E as payment from its A.E and received the payments from its A.Es. It is also brought on record that for the work got done by the assessee from its subsidiary and other independent units, the bills have been raised by these entities on the assessee and the assessee has made the payments to them on its own accounts and not on behalf of the A.Es. Thus, the payments to the subsidiary and other independent units by the assessee cannot be treated as pass through cost as it is not the payment from A.E to subsidiary of the assessee. Being so, the AO is justified in considering the pass through cost also for arriving at the operative cost/operating cost and the decision relied upon by the ld.A.R cited above have no application. - Decided against assessee. Suitable adjustments to account for differences in the risk profile of the assessee and its comparables - Held that:- We direct the TPO to allow risk adjustment at 1% as decided in the case of M/s.HELLOSOFT INDIA (P.) LTD. Vs. DCIT. [2014 (4) TMI 72 - ITAT HYDERABAD ] Carry forward of current year unabsorbed depreciation - Held that:- It is held by the Hon’ble Karnataka High Court in the case of CIT Vs. Himatsingka Seide [2006 (8) TMI 125 - KARNATAKA High Court] held that brought forward depreciation had to be adjusted against the profit of the EOU before computing exemption allowable u/s.10B of the Act
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