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2017 (7) TMI 953 - AT - Income TaxTPA - ALP determination - selection of comparable - selection criteria - Held that:- The issue is now settled that high profit or loss cannot be a criteria for inclusion or exclusion of companies in the set of comparables. However, if the high profit or loss is by the reason of some extraordinary circumstances then those extraordinary circumstances which has led to the high profit or loss can be considered as a criteria for inclusion or exclusion of the companies in the list of comparables. Therefore, the mere high profit margin or loss cannot be considered as a parameter or criteria for selection of comparable companies Assessee is a subsidiary of Exeter Educational Management Systems Inc. USA and provides software development services for the administration of higher education institutions worldwide thus companies functionally dissimilar with that of assessee need to be deselected from final list of comparable. Eligible for deduction u/s. 10A - denial of reversal of provision for management charges payable to its parent company - Held that:- Referring to assessees's submission that this amount was allowed as business expenditure in the earlier year and therefore the business profit of the assessee for the purpose of deduction u/s. 10A was reduced by this amount in the earlier year also as during the year under consideration the assessee has reversed the provision which has resulted increase in the business income of the assessee and therefore it is eligible for deduction u/s. 10A this fact of provision being allowed as business expenditure in the earlier year has not been verified by the authorities below and therefore in the absence of any finding on this issue by the authorities below it is not possible to give a concluding finding at this stage. Thus in the facts and circumstances of the case we set aside this issue to the record of the AO for verification
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