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2020 (3) TMI 391 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- We find that in assessee’s own case in [2019 (5) TMI 290 - ITAT MUMBAI] the Tribunal excluded Apitco from the list of comparables for the reasons that the company is Government company and also being functionally non-comparable. TSR Darshaw Limited is engaged in providing Share Registrar and transfer services, depository services, pay roll and Provident fund Management Services, etc. The activities carried out by the said company are in the nature of BPO/KPO. We find that the Tribunal in the case of Star India Pvt. Ltd [2019 (8) TMI 1464 - ITAT MUMBAI] a group company of the assessee, having activities similar to that of assessee has held, TSRDL is not comparable to support service provider. TDS u/s 194H - disallowance made under section 40(a)(ia) - Agency commission paid to the agents for procuring business for the assessee - HELD THAT:- Revenue did not assail the findings of Tribunal on the issue of deleting the addition made in respect of agency commission under section 40(a)(ia) of the Act. Thus, the Revenue accepted the findings of Tribunal on this issue. See STAR ENTERTAINMENT MEDIA (P.) LTD. [2020 (1) TMI 867 - BOMBAY HIGH COURT] WAPCOS company is liable to be rejected as comparable on account of functional disparity as well as, being a Government Company. In view of our above observation, we direct TPO /Assessing Officer to exclude WAPCOS from the list of comparables. Company having related party transactions exceeding 25% of turnover - It is no denying fact that where an entity is having related party transaction in excess of 25% of the total turnover, the same is held to be bad comparables - We find that in the case of DCIT vs. Aruba Network Pvt. Ltd., [2016 (9) TMI 1447 - ITAT BANGALORE] has excluded Hindustan Housing Co. Ltd. from the list of comparables as it has failed to qualify RPT filter of 25%. Taking into consideration, well settled principle of rejecting comparable by applying RPT filter, we deem it appropriate to refer this comparables to the TPO for re-examination. In case the related party transactions of the said company exceeds 25% of the total turnover, the TPO is directed to exclude said company from the list of comparables.
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