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2022 (12) TMI 418 - AT - Income TaxTP Adjustment - exclusion of the comparable - HELD THAT:- Companies functionally dissimilar with that of assessee company engaged in the business of export of Information Technology enabled Services (ITeS) need to be deselected from final list. Acquisition of a new type of business during the year is an exceptional event and renders the comparability of this entity which the assessee, who has no such event. So also the comparability depends upon the segment which forms the predominant activities of the entity and on this score, compnaies does not pass the test of comparability. Foreign exchange loss - treatment as operating in nature for transfer pricing purpose - HELD THAT:- In DHL Express (India) (P) Ltd. [2011 (4) TMI 856 - ITAT MUMBAI] and Hanil Tube India (P) Ltd. [2017 (2) TMI 1449 - ITAT CHENNAI] it is held that foreign exchange fluctuations and profit on sale of assets do not form part of the operational income because these items have nothing to do with the main operations of the assessee. In these circumstances, we are of the considered opinion that the foreign exchange loss should not have been treated as operational expense and we direct the learned AO/Ld. TPO to treat the foreign exchange fluctuation loss as non-operating in nature for calculation of margins. Disallowance of interest on unsecured loan taken which is 100% subsidiary of the assessee - addition on the ground as it is not incurred for the purpose of assessee’s business though the said borrowings were utilised for investments in subsidiaries which is part of business purpose of the assessee company - HELD THAT:- As in assessee’s own case for the assessment year 2011-12 wherein it is clearly held that the interest on unsecured loan taken from M/s. Social Media India Ltd., is an allowable expenditure. Respectfully following the view taken by a coordinate Bench of this Tribunal in assessee’s own case, we allow this ground and direct the learned Assessing Officer to delete this addition.
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