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2019 (7) TMI 1317 - AT - Income TaxTP Adjustment - computing Arms Length Price in relations to international transactions entered into by assessee with its AE - Comparable selection - HELD THAT:- Kidde India Limited - We have observed that Kidde India Limited has not only incurred losses for both the years (as per audited financial statements for the year ended 31.03.2010 placed on record) but its networth has also been eroded completely due to accumulated losses exceeding networth. The accumulated loss are to the tune of ₹ 92.99 crores as against share capital and reserves and surplus, which are to the tune of ₹ 69.91 crores. The said Kidde India Limited has also been dealing in sale of products and spares which is as much as 32% of operating income. No doubt consistency is to be followed in income-tax proceedings but principles of res judicata are not applicable in income-tax proceedings. The onus is on the assessee to bring on record cogent material to substantiate inclusion of Keddy India Limited as comparable for computing ALP. Nitin Fire Protections Limited - So far as Nitin Fire Protections Limited is concerned, perusal of audited financial statements for the year ended 31.03.2010 will reveal that apart from providing turnkey solutions including procurement, designing, system integration, commissioning and installation of safety and security solutions, is also in manufacturing and trading activities. As submitted before us that in these turnkey projects, the project cycle is of 2-3 years and comparable profits for last three years should be taken, as assessee is into executing turnkey project which take two to three years to execute/complete. It is also claimed that assessee has incurred extraordinary expenses due to delay in DIAL project and these extraordinary expenses incurred should be excluded while computing PLI of the assessee. New comparables namely New Fire Engineers Pvt. Ltd. and Logicon Building Systems Pvt. Ltd. - These were not accepted by learned DRP as comparables mainly on the grounds that these comparables were not selected by assessee while conducting its TPSR through Prowess. The learned counsel has prayed that in the interest of justice, matter may be restored to the file of the AO/TPO for fresh adjudication on merits in accordance with law after considering all the contentions of the assessee. DR has also fairly submitted that the issues in this appeal can be set aside and restored to the file of the AO/TPO for fresh adjudication of the issue on merits in accordance with law. In our considered view also keeping in view facts and circumstances of the case, end of justice will be met in this case if the matter is restored back to the file of AO/TPO for fresh adjudication of all the issues which had arisen in this appeal, in accordance with law on merits.
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