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2017 (9) TMI 1155 - AT - Income TaxTPA - selecting a comparable - Held that:- Following the decision rendered by the coordinate Bench of the Tribunal in case SunGard Solutions (India) (P.) Ltd. (2014 (12) TMI 429 - ITAT PUNE) and the fact that when the TPO has himself adopted the filter of 25% of RPT for the purpose of excluding a company from the list of comparables, he cannot arrive at a logical computation for benchmarking the international transaction by selecting a comparable having 36.74% of its total expenses with related parties. So, we are of the considered view that Motilal Oswal Investment Advisors Pvt. Limited is not a suitable comparable, hence ordered to be excluded. LIBOR or PLR rate applicability - adjustment qua the delayed receipt of advisory fees - Held that:- Ratio of the judgment CIT-I vs. Cotton Natural (I) (P.) Ltd. (2015 (3) TMI 1031 - DELHI HIGH COURT) “that PLR rate as applied by TPO/CIT (A) are not applicable for determining interest rate rather LIBOR should be applied to compute the interest on the delayed payment of ₹ 1.13 lakhs.” So, in these circumstances, grounds determined in favour of the assessee. Addition on account of bonus by the taxpayer to its Managing Director and Director who were also shareholder of the assessee in the ratio of 2 : 1 u/s 36(1)(ii) - Held that:- As in assessee’s own case for AY 2006-07 the deduction u/s 36(1)(ii) in respect of payment of bonus to the aforesaid shareholder/Director who are also major shareholder in the company with 50% shareholding of each is allowable deduction as there is no change in the shareholding pattern during the year under assessment, hence ground is determined in favour of the assessee. Exclusion of M/s. Keynote Corporate Services Ltd. as unsuitable comparable - Held that:- Revenue's contention that only the shareholding pattern of M/s. Keynote Corporate Services Ltd. is changed with amalgamation which has not affected the profit is not tenable in the face of uncontroverted fact that the profit margin of assessee company has raised up to 145% during the year under assessment which is extremely volatile and abnormal and is due to the amalgamation and merger. Moreover, launch of ESOP Division which focused on designing and implementing stock option scheme for corporate, the business model of comparable company has undergone a change. So, we are of the considered view that the ld. CIT (A) has rightly excluded M/s. Keynote Corporate Services Ltd. as unsuitable comparable.
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