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2020 (12) TMI 813 - AT - Income TaxTP Adjustment - how to compute PLI when RSP Method is applied in this peculiar case - computation of the profit level indicator as directed by the learned CIT-A - as submitted by AR job profile of three expatriates employees and stated that cost of these employees cannot be reduced while computing the profit level indicator when resale price method is to be applied - HELD THAT:- According to the provisions of rule 10 B for the determination of the arm's-length price u/s. 92C, the resale price method computation shall be determined according to sub-rule (1) (b) of the income tax rules. Mostly looking at the profile of the expatriates provided by the ld AR, it is apparent that either those are for providing Warranty services or after sales services. When the goods are sold all the price of these items/services are already embedded in the sales price. Naturally when sales price consists of price for warranty and After sales services, which are promised at the time of sales, naturally corresponding expenses are also to be considered while computing the margin of the assessee. After sale support services, training to customers and local staff for troubleshooting and service coordination expenses are thus, required to be included for determining the gross profit margin in resale price method. In view of this, we do not find any infirmity in the order of the ld TPO and CIT(A). Accordingly Ground no. 3 to 5 of the appeal are dismissed.
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