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2023 (4) TMI 1039 - AT - Income TaxTP adjustment on account of working capital - assessee had sought adjustment for working capital to account for difference in the working capital position of the assessee and the comparable companies - HELD THAT:- We find that the Co-ordinate Bench of Tribunal in the case of Sony Mobile Communication International SB [2016 (5) TMI 198 - ITAT DELHI] has held that working capital adjustment cannot be denied to the assessee if it is a service industry. It has further observed that in order to neutralize the differences on account of carrying high or low inventory, trade payables and trade receivables, as the case may be, it becomes eminent to allow working capital adjustment so as to bring the case of the assessee at par with other functionally comparable entities. It has further, by relying on the decision of.Navisite India Pvt. Ltd [2013 (5) TMI 844 - ITAT DELHI] has held that the component of working capital deployed should be considered on annual basis with the average of opening and closing figures. As Revenue has not pointed to any distinguishing feature in the facts of the case in the year under consideration and that of the earlier year. Revenue has also not placed any material on record to demonstrate that the decision relied upon by the CIT(A) has been stayed/set aside/overruled by higher judicial forum. In such a situation, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed. Exclusion of comparables - principle of res judicata - TPO study has selected certain comparable companies - TPO had rejected some of the comparables selected by the assessee and had included fresh comparables for the purpose of determination of Arm’s Length Price (ALP) - HELD THAT:- We find that CIT(A) after considering the material on record has decided the issue in favour of the assessee the comparables which were rejected in all the 4 subsequent years was not be adopted for arriving at Arm’s Length Margin in the current year. Further, as pointed out above out of the 4 comparables adopted by the appellant in the TP study, the TPO had objected to only 3 of the comparables and regarding Tata Elxsi Ltd. the TPO had mentioned that it was a good comparable but had not adopted the same in the final list of comparables. As such, the TPO is directed to adopt the named comparables for the purpose of arriving at Arm’s Length Margin of the segment. Principle of res judicata is not applicable to Income-tax cases, we have no hesitation in accepting the aforesaid principle but at the same time, various courts have held that even if the principle of resjudicata does not apply to tax matter but in the absence of any material change justifying the revenue to take a different view of the matter, the position of fact accepted by Revenue over a period of time should not be allowed to be reopened unless revenue is able to establish compelling reasons for a departure from the settled position. Before us, no distinguishing feature in the facts of the case in the year under consideration and that of the earlier year has been pointed out by Revenue. In such a situation, we find no reason to interfere with the order of CIT(A) and thus the ground of Revenue is dismissed. TDS u/s 194C - non-deduction of TDS on the printing material consumed by the assessee - HELD THAT:- Hon’ble Delhi High Court in the case of Dabur India Ltd [2005 (8) TMI 65 - DELHI HIGH COURT] held printing of the labels on the corrugated boxes did not require any special skill or involve any confidence or secrecy and therefore, the Tribunal was justified in holding that the predominant object underlying the contract was one for sale of goods which took the contract out of the purview of Section 194C - ground of Revenue is dismissed.
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