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2017 (10) TMI 481 - AT - Income TaxTPA - selection of the comparables - Held that:- Assessee engaged in manufacturing and production of Industrial Valves. Automated and Distributed Control System. It also provide Engineering services, offering innovative automation products, solutions and value adding life cycles fitted to customer’s specific needs. It offers environmental technology services e.g. advance process control, advance emission monitoring and authority reporting to help customers in oil and gas, paper and pulp, Power sector and other Industries, thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparability. We find that the observation of the ld. DRP that the assessee has not demonstrated as to how both the divisions are not enter-twined is not at all tenable. By no stretch of imagination, the manufacture and sale of engineering goods on one hand and provision of engineering services on the other can be considered as the same segment unless specific facts to the contrary is put on record. The assessee is claiming that the engineering service segment on stand-alone basis has depicted profit but the goods segment has resulted in loss, which has resulted in the overall loss in the combined results considered in comparability analysis. This aspect deserves proper examination. Hence, we find that the objection of the ld. Counsel of the assessee that the segmental data should be considered in bench marking and comparability analysis is germane. Hence, we uphold the same. Accordingly, the issue is remitted to the file of the TPO. The TPO shall take into account the segmental detail and data and do the analysis afresh.
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