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2019 (7) TMI 358 - AT - Income TaxPenalty u/s 271 (1)(c) - addition based on the findings of the transfer pricing officer in its order u/s 92CA(3) - HELD THAT:- TPO assessed the Arithmetic Mean @ 16.85%. It is now well settled that the government companies are not good comparables to the private companies and In this regard we also find support of law settled in the case of CIT,3 v. ThyssenKrupp Industries India (P.) Ltd. [2016 (3) TMI 1354 - BOMBAY HIGH COURT] , Pr. CIT-4 v. International SOS Services India (P) Ltd [2017 (5) TMI 1588 - DELHI HIGH COURT] . In these ‘10’ comparables there are ‘4’ companies which has been compared by the TPO. Whose names are Apitco Ltd, Rites Ltd, Vapi Waste & Effluent Mgmt Co. Ltd, WAPCOS Ltd (Seg). If the ratio of these companies be not included for comparisons then the Arithmetic mean would be 8.32% and e-bay India Margin would be 9.82%, if the legal fee be adjusted by the TPO then the margin would be approximate 9% whereas the assessee has already given the Arithmetic Mean @ 8.69%. After concluding all the facts mentioned above when the Arithmetic mean is approximate to the working of the assessee we are of the view that it is not a case of concealment of income or furnishing of the inaccurate particulars. Moreover the assessee has acted in good faith and with due diligence so no penalty is leviable in view of the law settling in case tiled as Pr. CIT-04 v. Gap International Sourcing India Pvt. Ltd. [2017 (8) TMI 1556 - DELHI HIGH COURT] , Pr. CIT-6 v. Mitsui Prime Advanced Composites India (P.) Ltd. [2017 (4) TMI 186 - DELHI HIGH COURT] . Taking into account of all the facts and circumstances, we are of the view that the finding of the CIT(A) is not justifiable and is not liable to be sustainable in the eyes of law, therefore, we set aside the finding of the- CIT(A) in question and delete the penalty - Decided in favour of assessee.
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