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2022 (12) TMI 1256 - AT - Income TaxTP Adjustment - working capital adjustment to be considered for the difference in working capital levels between the comparable companies and the assessee - HELD THAT:- With regard to international transaction of provision of marketing services to Red Hat US, the assessee is seeking for working capital adjustment. We find that the Co-ordinate Bench of this Tribunal in assessee’s own case for A.Y.2016-17 [2022 (2) TMI 1283 - ITAT MUMBAI] had indeed accepted to the plea that working capital adjustment shall be eligible to the assessee and the same shall be reckoned for the difference in working capital levels between the comparable companies and the assessee. Admittedly, the assessee had indeed furnished the workings for working capital adjustments before the ld. TPO as is evident - We direct the ld. TPO to grant working capital adjustment while determining the ALP of provision of marketing support related services to Red Hat US. The ground No.18 raised by the assessee for A.Y.2012-13 is allowed for statistical purposes. Inclusion and exclusion of certain comparables - Exclusion of Infobeans Technologies Ltd. from the final list of comparables as it is into diversified services but its segmental financials are not available without which it is difficult to compute the correct profit margin of the relevant segment. So Infobeans is also ordered to be excluded as a comparable being not a comparable to the assessee. Exclusion of Ingenuinity Gaming Solutions - In absence of segmental data for the software development segment alone, the same cannot be held to be comparable with the assessee in IT segment. Accordingly, we direct the ld. TPO to exclude the same from the list of comparables. The segmental data for software development services segment alone also was not available in respect of this comparable. Hence, we direct the ld. TPO to exclude this company from the final list of comparables. As stated earlier, once the aforesaid two comparables are excluded and working capital adjustments are given, the ld. AR submitted that it would not be required to go into other grounds as the assessee would be well within the tolerance band of +/-5% range. Hence, the ground Nos.5-7 are not hereby adjudicated and they are left open.
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