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2020 (8) TMI 712 - AT - Income TaxTP Adjustment - Comparability Analysis and Determination of Arm's Length Price - HELD THAT:- M/s. C G VAX Software & Exports Limited is not only engaged in the business of computer software development, but also engaged in product manufacturing process, whereas the present assessee is not in product manufacture activity. M/s. C G VAX Software & Exports Ltd. owns huge intangible assets and also engaged in outsourced product development. In view of the foregoing reasons, we hold that the said company cannot be considered for inclusion in the list of comparables. Comparability on the basis of turnover filter - decisions cited by the learned DR before us cannot be the basis to hold that high turnover is not relevant criteria for deciding on comparability of companies in determination of ALP under the Transfer Pricing regulations under the Act. For the reasons given above, we uphold the order of the CIT(A) on the issue of application of turnover filter and his action in excluding companies by following the ratio laid down in the case of Genisys Integrating [2011 (8) TMI 952 - ITAT BANGALORE]. Negative working capital adjustment - Negative working capital adjustment shall not be made in case of a captive service provider as there is no risk and it is compensated on a total cost plus basis. MAT Credit not allowed - At the time of hearing, the ld. counsel for the assessee submitted that the MAT credit would be consequential to the decision rendered in AY 2009-10 , 2010-11 & 2011-12 with regard to exemption u/s. 10A of the Act in those years - HELD THAT:- We accept the prayer of the ld. counsel for the assessee and direct the AO to given consequential relief based on the outcome of the earlier assessment years. Ground is accordingly treated as allowed for statistical purposes.
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