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2024 (4) TMI 132 - AT - Income TaxTP adjustment - margin computation for provision of services to the AEs by the assessee - AR submitted that for the assessment year 2020-21, while computing the operating margin on cost for rendering of the same engineering and other related services, the learned TPO considered only the segmental operating margin on cost, but not at the entity level - HELD THAT:- We are of the considered opinion that the details furnished by the assessee in respect of margin computation for provision of services to the AEs by the assessee, vide Annexure-A to the submissions made before the TPO on 08/01/2021 deserves consideration and for such purpose, we restore the issue to the file of the AO/ TPO, who will consider the same and take a fresh look on this issue, after affording an opportunity to the assessee. Ground raised treated as allowed for statistical purpose. Adjustment towards reimbursement of expatriates’ salary, bonus and the provident fund costs - AR submits that the copy of the deputation agreement is now available with them and they are ready to furnish the same and therefore an opportunity may be granted to the assessee to produce such agreement before the authorities and get the matter disposed of on merits - HELD THAT:- As in view of the fact that the earlier issue was restored to the file of the learned AO/TPO, we deem it just and proper to restore this issue also to the file of the learned AO/learned TPO with a direction to the assessee to produce all the requisite documents sought by the TPO on the earlier occasion and cooperate with the proceedings. Ground is accordingly treated as allowed for statistical purpose. Disallowance of miscellaneous expenditure considering the same as prior period expenses and also capital in nature - According to the assessee, for the purpose of construction of a temporary site office, the assessee entered into a service contract and incurred an expenditure on account of site mobilization work subcontracted and submitted the invoices - HELD THAT:-We find force in the argument of the learned AR and since this matter requires verification at the end of the learned AO/learned TPO, this issue is also restored to the file of the learned AO/learned TPO to verify the invoices and take a view as to the nature of this expenditure. Loss on projects - assessee submitted that it is following the Accounting Standard-7-Construction Contract describes and lays out the accounting treatment in respect of the revenue and costs in relation to a construction contract and it has to be used in for the accounting of construction contracts in the financial statements of the contractors - HELD THAT:- We deem it just and necessary to give an opportunity to the assessee to take such a plea before the learned DRP and to have the facts verified by the learned DRP in the light of ICDS-III. For this purpose, we restore this issue to the file of the learned DRP and the assessee will make all the submissions relating to this aspect to the learned DRP. Appeal of the assessee is treated as allowed for statistical purposes
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