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2016 (9) TMI 306 - HC - Income TaxTransfer pricing adjustments - Benefit of 30% given in the profit margin of Titagarh Wagons Ltd. (TWL) for the "free of cost supplies" received by TWL from the Railways - Held that:- TPO has not taken into consideration the proper information related to the free of cost. material provided by the Railways to Titagarh Wagons Ltd. as well as to Texmaco Ltd. and thus the said information is necessary to take into account the functions performed, assets employed and risks assumed ("FAR"). Ld. DRP in his finding also has directed Ld. TPO to take these aspects while allowing the said comparables. There is no doubt that these two companies are having the major role in supplying coaches to the Indian Railway and these are proper comparables if all the aspects are taken into consideration including the free of cost material value. Therefore, Ld. TPO is directed to take into account 30% additional cost base to account "free of cost" material and revised the OP/TC margin of 13.65% for determining the arm's length margin as claimed by the Assessee.
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