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2020 (6) TMI 206 - AT - Income TaxTP Adjustment - non-granting of “Capacity under utilization adjustment” while determining Arms length price of international transactions - assessee is engaged in the business of manufacture and sale of self adhesive tear tapes - HELD THAT:- We notice that an identical issue has been examined by the coordinate bench in the case of IKA India Pvt. Ltd. [2018 (10) TMI 49 - ITAT BANGALORE] thus we hold that the assessee is entitled for deduction from its PLI towards capacity under-utilisation adjustment. As noticed earlier that the assessee has computed the adjustment by presuming that the comparable companies have operated at 100% of capacity. A.R also accepted that the said adjustment should have been computed by considering the details of actual capacity utilization by comparable companies. Since the said details are not available in public domain, it is imperative to restore this issue to the file of AO/TPO with the direction to collect the relevant details from comparable companies for the year under consideration and accordingly compute the adjustment. We notice that the co-ordinate bench has given certain directions to be followed by the AO/TPO in the case of IKA India Ltd (supra). Accordingly, we set aside the order passed by AO on the impugned issue and restore the same to the file of AO/TPO with similar directions. - Appeal filed by the assessee is treated as allowed for statistical purposes.
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