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2020 (8) TMI 37 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- In Dover India (P.) Ltd. v. DCIT [2017 (4) TMI 1497 - ITAT PUNE ] it is held that “where a company was performing similar functions with that of the assessee, in absence of revenue establishing that said concern was persistent loss making concern, merely because said concern during relevant year had shown losses, could not be a valid reason for excluding same from list of comparables. We are of the considered view that the principles laid down in the above decisions are applicable to the instant case. A fortiori Sabero Organics Gujarat Ltd., Aksharchem (India) Ltd. and Bhageria Dyechem Ltd. have earned profit in FYs 2009-10, 2010-11, 2012-13 & 2013-14 and incurred losses only in FY 2011-12. Such fluctuations are normal in competitive business environment and the same cannot be considered as a reason for rejecting the aforesaid comparables. These three comparables are definitely not persistent loss making companies. We direct the AO/TPO to include Sabero Organics Gujarat Ltd., Aksharchem (India) Ltd. and Bhageria Dyechem Ltd. as comparable and compute the arithmetic mean margin and pass consequential order. Needless to say, the AO would give a reasonable opportunity of being heard to the appellant before passing the order. Order being pronounced after ninety (90) days of hearing - COVID-19 pandemic and lockdown - HELD THAT:- Taking note of the extraordinary situation in the light of the COVID-19 pandemic and lockdown, the period of lockdown days need to be excluded. See case of DCIT vs. JSW Limited [2020 (5) TMI 359 - ITAT MUMBAI]
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