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2018 (10) TMI 1116 - ITAT DELHITransfer pricing - proper allocation of expenses - proof of expenses incurred leasing business with AE - Adjustment made in the transaction of purchase of home base segment - The TPO formed a belief that homebase segment was artificially showing higher operating margin of 49%, while the domestic operation was showing loss of 24.13% - Held that:- When the accounts are regularly maintained in the course of business, duly audited under the provisions of the Act, free from any qualification by the auditors, they should be taken as correct unless there are strong and sufficient reasons to indicate that they are unreliable. As mentioned elsewhere, the TPO proceeded on a false premise that the appellant has not allocated any expenses to the homebase segment, whereas, as demonstrated elsewhere, not only the appellant has allocated routine expenses, the details were also furnished before the lower authorities. No merits in the additions made in this segment. We, accordingly, set aside the findings of the DRP and direct the Assessing Officer to delete the additions made under home base segment. This substantive grievance of the assessee is allowed. Adjustment made in the transaction of provision of Market Support Services [MSS] - segment of MSS has been benchmarked by the appellant using TNMM as the most appropriate method - selection of comparable - Held that:- Companies functionally different with that of assessee as routine service provider need to be deselected from the final list. Adherence to RPT filter need to be assured. Loss incurred during the year taken as income of the assessee - Held that:- It appears that the Assessing Officer, while passing final assessment order, has considered the returned income of the assessee as loss. We, accordingly, direct the Assessing Officer to verify and treat the income as such.
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