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2017 (4) TMI 358 - AT - Income TaxTaxing of accrued income shown as unmatured advances in the balance sheet - Held that:- The issue is covered in favour of the assessee by the decision of the ITAT, Hyderabad in assessee’s own case for AY 2001-02 what is to be seen is whether the assessee has followed a recognized method of accounting or not. If method followed by the assessee is such whereby correct income cannot be deduced, then only the assessing officer has the authority to adopt a reasonable basis to determine the total income. In the instant case,. It cannot be disputed that the assessee has followed a recognized method of accounting and hence, there is no question of adding any further amount to the total income. - Decided in favour of assessee Arm’s length Price determined by TPO u/s 92CA - Held that:- As noted from the order of TPO, the total cost of the assessee adopted by the TPO is not correct as he should have adopted the cost what is relevant for the international transactions. As observed by the CIT(A), the cost adopted by the assessee are only relating to man power and depreciation relating to computer, may not be sufficient, there may be other cost associated to the international transactions like administration, management resources etc. To substantiate the cost allocation method adopted by the assessee, Assessee has filed additional evidence before us, which requires verification. At the same time, some of the filters adopted by the TPO, as highlighted by CIT(A), are not proper and some of the comparables considered by the TPO are not relevant to the assessee. Considering the above factual errors, we remit the issue back to the file of the TPO for de-novo consideration. We direct the TPO to re-do the assessment after giving proper opportunity to the assessee in this regard. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.
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