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2017 (8) TMI 339 - AT - Income TaxTPA - RPT filter of 0% - comparability - CIT(A) applied the 0% related party transaction filter as well as the high profit margin of more than 50% - Held that:- Only in extreme and exceptional circumstances when the comparable companies are not easily available or found then this tolerance range is relaxed up to 25%. Therefore in the case of the assessee where neither the TPO nor the assessee has made out a case of exceptional difficulty in searching the comparable companies then the normal tolerance range of 15% shall be taken as proper. - 15% tolerance range of related party is reasonable and proper in the case of the assessee. Selection of comparable - Held that:- As directed the AO / TPO to exclude certain companies from the set of comparables therefore and also remanded certain companies for verification of fact therefore the TPO/AO is directed to recompute the arms length price on the basis of the remaining set of comparables. Needless to say the benefit of proviso to section 92C(2) of the Act shall also be considered. Deduction u/s 10A - amount of provision for management charges payable to its AE - Held that:- We note that the AO as well as CIT(A) has denied the claim of deduction u/s. 10A in respect of this amount of ₹ 8,01,755/- pertains to the reversal of provision for management charges payable to its parent company. The assessee has stated that this amount was allowed as business expenditure in the earlier year and therefore the business profit of the assessee for the purpose of deduction u/s. 10A was reduced by this amount in the earlier year. During the year under consideration the assessee has reversed the provision which has resulted increase in the business income of the assessee and therefore it is eligible for deduction u/s. 10A. - Matter remanded back to the record of the AO for verification of the relevant facts and then decide the claim of the assessee as per law.
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