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2019 (8) TMI 403 - AT - Income TaxTP Adjustment - comparable selection criteria - TPO has excluded the loss making companies - HELD THAT:- TPO has excluded the loss making companies we find he has not excluded the high profit making companies from the comparables. We find merit in the submission of the Ld. Counsel for the assessee that the Annexure given by the TPO during the assessment proceedings is incomplete and some fresh sets were given according to which the average ALP margin comes to 6.02% as against 10% on cost shown by the assessee. It is only after this incomplete list showing lesser profit than the profit declared by the assessee was brought to the notice of the TPO that he excluded the 47 loss making companies to determine the mean average profit at 20.42%. We, therefore, find merit in the submission of assessee that there is no basis for only excluding the loss making companies and not excluding the high profit making companies or companies which are not at all comparable considering their size, volume of turnover and other factors. In our opinion, the whole exercise of selecting the comparables by the TPO is not proper and is in a haphazard manner. In this view of the matter and in view of the detailed discussion by the Ld. CIT(A) on this issue, we do not find any infirmity in his order and accordingly upheld the same. See FROST & SULLIVAN (I) (P.) LTD. [2012 (4) TMI 120 - ITAT MUMBAI] - Decided against revenue.
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