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2023 (3) TMI 1021 - AT - Income TaxTP Adjustment - determination of profit level indicator computation - HELD THAT:- For the purpose of profit level indicator, the margin of the assessee should be computed only on international transactions. It was also found that the CIT- A has not given any finding on this aspect despite making a written submission before him. The order of the lower authorities is not sustainable on this count. Accordingly, TPO/AO is directed to compute the profit level indicator of the assessee at 11.35%. Comparable selection - Aurum software systems Ltd - No justification in the order of the learned CIT – A4 exclusion of above comparable. Naturally, the learned transfer pricing officer did not apply the accept reject metrics filter which the learned CIT - A applied. The logic given by the learned CIT – A is devoid of any merit. Accordingly, as the comparable is functionally comparable, same deserves to be included in comparable analysis. Accordingly, we direct the learned transfer pricing officer/assessing officer to include the above company. Cybermate Infotech Ltd (-13.71%) and Info drive software Ltd (-17.52%) - Cybermate Infotech Ltd has revenue from operation according to schedule 18 and such is only ITeS segment. Further info drive software Ltd is also from ITeS segment. Accordingly, both are functionally comparable. DR could not show that these companies are not functionally comparable with the assessee. He also could not show anything to support the finding of the learned CIT – A. Therefore, we do not have any other alternative but to direct the learned AO/TPO to include both these companies in the comparability analysis. The learned CIT – A despite having the annual accounts before him did not comment that why he is upholding the action of the learned transfer pricing officer in excluding the above comparable.
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