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2021 (7) TMI 495 - AT - Income TaxTP Adjustment - Comparability selection - functional profile - HELD THAT:- M/s. Container Corpn. of India Ltd - From perusal of the annual accounts of this company, we also find that Container Corporation of India is a Giant Company with turnover of more than ₹ 3,300/- crores, fixed asset base of around ₹ 2,244/- crores, Container fleet of 13,517 units, Speed Wagons of 6,722 and owning Terminals. The assessee, on the other hand, is a service-oriented company with turnover of ₹ 33.24 cr and fixed asset base (gross) of only ₹ 31.22 crores. Container Corporation of India is also operating in Virtual Monopoly conditions. From the above cumulative reasons, we find that FAR of Container Corporation of India is not akin to that of the assessee. It should, therefore, be rejected as a comparable. M/s. Sanco Trans Ltd - Handling charges earned is 40.96% of the total revenue and balance is passive income i.e., hire charges earned and warehouse charges earned which is 59.03%. There are no segmental accounts prepared. M/s. Sanco Trans has earned total operating revenue of ₹ 4296.36 lakh and total employee cost incurred is 511.96 lakhs which in ratio terms is 11.91%. This shows that this is also not a service-oriented company. For reasons akin to that stated above we, therefore, hold that M/s. Sanco Trans cannot be selected as a comparable TPO had computed the PLI of companies selected by him by presuming that FBT expense is a non-operating item - HELD THAT:- We have perused the material on record and it is seen that there is no adjudication by the Ld. DRP on this issue. We, therefore, direct the TPO to adopt a uniform policy. Once FBT expense is taken as non-operating while computing the PLI of comparable companies, a similar effect should also be given while computing PLI of the tested party. We, therefore, direct the TPO to re-compute the PLI of assessee excluding FBT expense.
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