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2020 (12) TMI 983 - AT - Income TaxTP Adjustment - Working capital adjustment - HELD THAT:- AO/TPO has to consider the assessee’s case as entitled for working capital adjustment as in earlier year, while determining the ALP. Accordingly, we direct the A.O. to determine the appropriate rate of working capital risk adjustment after going through the relevant records of the assessee. Comparable selection - Mubea Suspension (India) Ltd. rejected by the TPO on the reason that this comparable is having loss for 2 years out of 3 years - It is not disputed that there is only one-year profit out of 3 successive financial years. Being so, there is a profit in 1 year out of consecutive 3 financial years, Mubea Suspension (India) Ltd. to be considered as a comparable to determine the ALP of the transactions in assessee’s case as held in the case of KBACE Technologies Pvt. Ltd. [2020 (2) TMI 78 - ITAT BANGALORE]. TP adjustment should be restricted to international transaction with the Associated Enterprises - contention of the assessee is that as the quantum of sales made to the A.E. vis-à-vis total sales is 52.16%, it is stated that if the TP adjustment is to be restricted only to the quantum of manufacturing sales pertaining to A.Es i.e. 52.16% and it cannot be extended to other than international transactions to A.E. - HELD THAT:- As gone through the orders of the authorities below. Admittedly, this issue came for consideration in assessee’s own case in the assessment year 2010-11. The Tribunal on this issue observed in para 23 [2016 (7) TMI 1281 - ITAT BANGALORE]that TPO was confined to the adjustment to the value of international transactions only as the section 92 of the Act applies with reference to computation of income from international transactions having regard to ALP in this AY 2013-14 and other domestic transactions cannot be considered for determining ALP in this A.Y. Being so, we direct the AO/TPO to confine the TPO adjustment only on international transaction in manufacturing segment only. Benefit of +/- 3% as applicable under proviso to section 92C(2) - HELD THAT:- We observe that while computing the ALP if the profit margin is within the range of +/- 3% in terms of section 92C(2) of the Act there it cannot be any TP adjustment with regard to the international transactions. The AO/TPO to take note of provision of section 92C(2) of the Act and decide accordingly. Ordered accordingly.
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