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2024 (4) TMI 141 - BOMBAY HIGH COURTTP Adjustment - relevance of capacity under utilisation factor alongwith other factors for determining TP adjustment - comparable selection - ITAT directing to make appropriate capacity utilization adjustment while computing net margin of the tested party (i.e. assessee) - HELD THAT:- In the assessment order the TPO provided all set of 12 comparables to assessee. The set of 3 comparables selected by assessee were sent for bench marking. Assessee raised various objections to the proposed comparison and the main ground of objection was that assessee had started production only in the month of May 2007 and the sales have started only from the month of July 2007. Whereas, the comparables were in the business for many years. This objection was rejected by the TPO. The CIT(A) upheld the findings of the TPO. The ITAT has rightly came to a conclusion that comparison has to be made between two equals. We agree with the finding of the ITAT that assessee who started the business in a particular year cannot be compared with assessee who are doing business for many years. On facts, the ITAT has given a finding that though there has been no major sales throughout the whole year, the expenses incurred by assessee are almost the same as compared to the expenses of the next year. It is also a fact that assessee had achieved sales of Rs. 62 crores in the next assessment year and assessee could achieve that turnover because the business by that time had got stabilised. No infirmity in the order passed by the ITAT. Therefore, no substantial question of law arise.
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