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2022 (12) TMI 835 - AT - Income TaxTP Adjustment - ALP determined in respect of the international transactions pertaining to the Manufacturing Segment and related activities - Working Capital Adjustment - HELD THAT:- As relying on Mobis India Ltd. [2014 (2) TMI 36 - ITAT CHENNAI] the issue is remanded back to the file of this AO/TPO with the directions to grant suitable Working Capital Adjustment. Claim for Ideal Capacity Adjustment & Exclusion of Extra-Ordinary Expenses - DRP had rejected claim for Idle Capacity Adjustment, and Exclusion of Extraordinary Expenses made by the Appellant on the ground that no such adjustments were made in the Transfer Pricing Study, however, the same were claimed by the Appellant only during the course of assessment proceedings - HELD THAT:- From documentary evidence, it is clear that the Appellant had shifted the manufacturing facility which resulted in incurring one-time extra ordinary expenditure and capacity under-utilization during the relevant previous year on account of shifting of manufacturing facility. Accordingly, we direct the AO/TPO to recomputed operational margins of the Appellant after excluding the one-time extra ordinary expenditure after verification of the same. Further, the AO/ TPO is also directed to grant suitable capacity under-utilization adjustment to the Appellant after necessary verification and after providing the Appellant an opportunity of being heard. Foreign Exchange Fluctuation Adjustment - We direct the Assessing Officer/TPO to provide suitable foreign exchange fluctuation adjustment after verification and after providing the Appellant opportunity of being heard. Comparable selection - Exclusion of Nitin Fiber Protection Industries Limited (NFPIL) from list of Comparables - HELD THAT:- We note that the Tribunal has, while deciding the appeal filed by the Appellant for immediately preceding Assessment Year 2012-2013 [2017 (4) TMI 1552 - ITAT CHENNAI] directed the AO to exclude NFPIL after coming to a conclusion that major income of NFPIL was from project related activities and therefore, could not be compared to the Appellant. In view of the aforesaid, we direct the AO to exclude NFPIL from the list of comparables. Selection of Comparables and Computation of Margins - HELD THAT:- As the authorities below have failed to appreciate the correct facts and take into account the financial data as reflected in the annual accounts of the comparables placed on record by the Ld. Authorised Representative for the Appellant. We find merit in the contentions advanced on behalf of the Appellant in this regards - subject to the directions given by us hereinabove, since there are a number of factual discrepancies leading to incorrect selection/rejection of comparables and computation of margins, we deem it appropriate to remit all issues related to inclusion/exclusion of comparables and computation of the margins thereof back to the file of AO/TPO for fresh adjudication after giving appellant opportunity of being heard. Rejection of claim of carry forward of unabsorbed depreciation by setting off of the unabsorbed depreciation before allowing set off of the brought forward losses while computing taxable income of the relevant previous year - HELD THAT:- As relying on SPEL Semi Conductors Ltd [2012 (12) TMI 81 - MADRAS HIGH COURT]. we direct the Assessing Officer to allow the set off of the brought forward business loss with current year business income as claimed by the Appellant and allow carry forward of the unabsorbed depreciation. Accordingly, Ground is allowed.
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