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2019 (5) TMI 1590 - AT - Income TaxDepreciation on exclusive business rights (good will) - HELD THAT:- As decided in assessee's own case [2016 (3) TMI 590 - ITAT DELHI] AO is directed to grant the depreciation on the consideration for the purchase of the exclusive business rights which are to be treated as intangible assets - Decided in favour of assessee TP Adjustment - selection of MAM - Resale Price Method (“RPM”) OR Transactional Net Margin Method (“TNMM”) - Expenses directly attributable to the manufacturing activity - HELD THAT:- Only airconditioners are imported from AE and water cooler plus air cleaners are manufactured and no sales are made to the AE. The bench marking done by the TPO is on erroneous facts. Unless a proper bench marking is done the dispute cannot be decided. We find that the TPO has adopted TNMM as the most appropriate method by saying that the comparables are not clear and their operating profit margin is not capable of applying RPM as most appropriate method though the same comparables have been used for bench marking by applying TNMM. This contradiction needs to be examined once again. We restore this issue to the files of the AO/ TPO with a direction that the manufacturing activity should not be considered as part of international transaction. Expenses directly attributable to the manufacturing activity should be ignored and the comparables should be once again examined to decide whether RPM is the most appropriate method. The assessee is free to raise any other issue relating to the bench marking and the TPO is also free to decide the issue after giving a reasonable opportunity of being heard to the assessee. Ground treated as allowed for statistical purpose.
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