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2019 (7) TMI 668 - HC - Income TaxTP Adjustment - exclusion of two comparables in the transfer pricing - two comparables i.e. M/s Bharat Earth Movers Ltd. and M/s Telco Construction Equipment Co. excluded by ITAT on the ground that both these companies have reported unusually high turnover - HELD THAT:- This Court is of the opinion that the ITAT’s opinion is ex facie untenable. This Court in Chryscapital Investment Advisors (India) pvt. Ltd. vs. Deputy Commissioner of Income Tax [2015 (4) TMI 949 - DELHI HIGH COURT] , had held that unusually high turnover per se cannot be a ground for exclusion and that the AO has to probe into the matter further. The Court also held that it is functional similarity which should be considered rather than the turnover. As a consequence, the impugned order cannot be sustained, on the first question, and is hereby set aside. Additional depreciation - Revenue urges that the items bought and for which said relief was claimed, cannot be termed as equipment - HELD THAT:- ITAT had relied upon its previous order granting the same relief. Moreover, the assessee engages itself in manufacturing of equipments for construction and building industry. In the circumstances, unless the connection of the items purchased and claimed to be equipment is shown to be remote, the Revenue cannot dictate and say that the said equipment is not plant, and not connected with the manufacturing activities.No question of law arises on this aspect.
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