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2021 (2) TMI 877 - AT - Income TaxTP Adjustment - Adopting the Transactional Net Margin Method (TNMM) for benchmarking its International transactions and Operating Profit/Total Cost (OP/TC) as the PLI - Comparable selection - HELD THAT:- Assessee is into international transactions of provision of business support services to its group entities, thus companies functionally dissimilar with that of assessee need to be deselected from final list. As three companies which were included by the TPO/DRP in the final list of comparables for benchmarking the International transactions of the assessee, viz. (i). Mold-Tek Technologies Ltd.; (ii). Eclerx Services Ltd.; and (iii). Accentia Technologies Ltd., in terms of our observations recorded hereinabove, cannot be held to be comparable to the assessee. Accordingly, we herein direct the A.O/TPO to exclude the aforesaid three companies from the final list of comparables for the purpose of benchmarking the International transactions of the assessee for the year under consideration. Before parting, we may herein observe, that the assessee had furnished before us a "Chart", wherein it is stated that in case if the aforementioned three companies are excluded from the final list of comparables, then, its International transactions of provision of support services to its AEs would meet the arms length standard and no adjustment would be warranted. It is stated by the assessee that as the value of its International transactions i.e provision of ITeS services is higher than the tolerance limit of +/- 5% as per the erstwhile sec. 92C(2) . As we have excluded the aforementioned three companies from the final list of comparables, the A.O is therefore directed to verify the aforesaid claim of the assessee. In case the value of the International transactions of the assessee is found higher than the value of the tolerance band of +/- 5%, then, no adjustment shall be therein be made by the A.O. Disallowing credit for TDS - HELD THAT:- As despite the fact that the same was claimed in the return of income. As the aforesaid claim of the assessee would require verification of the facts from the records, we therefore, direct the A.O to look into the said issue. In case if the claim of the assessee is found to be correct then the A.O shall allow the credit of the amount of the tax deducted at source. The Ground of appeal allowed for statistical purposes.
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