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2021 (9) TMI 849 - AT - Income TaxTP Adjustment - Comparable selection - exclusion of Acropetal Technologies Ltd. - HELD THAT:- As regards allegation of fraud against the company in light of notice issued by SEBI, we find that the notice was issued in financial year 2016-17, whereas the assessment year in question pertains to 2012-13. The assessee has not filed any evidences to demonstrate the disciplinary proceedings initiated by SEBI is having any bearing on financial results of assessment year 2012-13, but the assessee is supporting its arguments only on the basis of certain newspaper reports. Although, the assessee has referred the investigation report of SEBI, but on perusal of report issued by SEBI, we could not find any adverse comments on financial results for the relevant assessment year except violation of certain regulatory guidelines in respect of trading of shares in stock market. Therefore, we are of the considered view that unless the assessee demonstrate with evidences that disciplinary proceedings initiated by certain agencies are having bearing on financial results of the company for relevant assessment year, the company cannot be excluded from the list of comparables, more particularly when the assessee itself had included said company in the list of final comparables in its TP documentation. Therefore, on this count also, exclusion of Acropetal Technologies Ltd., is rejected. Bloom Energy India Pvt. Ltd - No merit in arguments of the assessee to exclude Acropetal Technologies Ltd., from the list of comparables and hence, we are inclined to uphold the findings of ld. DRP and reject ground taken by the assessee. Onward Technologies Ltd.- In light of reasons given by the ld. DRP to exclude Onward Technologies Ltd., from the list of comparables and find that one side, the ld. DRP is accepting the fact that the company is engaged in engineering design services and IT consulting, but on the other side, rejected objection filed by the assessee only for the reason that segmental data is not available in the financial years. Therefore, once the DRP having accepted fact that functions performed by Onward Technologies Ltd., is similar to functions performed by the assessee, it ought not to have rejected inclusion of said company, merely for non-availability of segmental data - we are of the considered view that the ld. TPO needs to re-examine the claim of the assessee for inclusion of Onward Technologies Ltd., in the list of comparables by analyzing FAR studies of both companies - we set aside the issue to the file of the ld. TPO and direct him to reconsider the claim of the assessee in light of various averments made and in accordance with law.
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