TaxTMI 
TaxTMI 
2013 (5) TMI 70
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....ransfer pricing (TP) Adjustment. The AO during the assessment proceedings noted that the assessee had international transactions with 10 associate enterprises (AEs) which included import of raw material at Rs.12.91 crores . The gross receipts of the business were Rs.139.48 crores and operating cost before tax at Rs.131.64 crores giving operating margin of 5.62%. The AO, therefore, referred the determination of arms length price in relation to international transactions to TPO. The TPO asked the assessee to submit information in support of ALP for international transactions. The assessee conducted TP study using TNMM method in respect of purchase of raw material from associate enterprise in which 12 comparables were selected which gave weigh....
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.... of Rs. 120.21 crores against the total expenses of Rs. 131.64 crores claimed by the assessee. The difference of Rs. 11,42,21,880/- was therefore, proposed to be added on account of TP adjustment as import of raw material of Rs. 12.91 crores was beyond the safe labour limit of 5%. The AO therefore, following report of TPO and after giving opportunity of hearing to the assessee made adjustment of Rs.11,42,21,880/- on account of purchases from associate enterprises. 3. In appeal CIT(A) confirmed the adjustment made by AO. CIT(A) observed that in assessment year 2006-07, the TP adjustment issue had been set aside by the Tribunal to AO which showed that the Tribunal had not accepted the finding of CIT(A) in assessment year 2006-07. CIT(A) thus....
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....omparison of operating margins of the enterprises. The Tribunal therefore restored the issue to the file of AO for fresh adjudication in accordance with law. The facts this year admittedly are identical. Therefore we set aside the order of CIT(A) and restore the matter back to the file of AO for passing a fresh order in accordance with law after allowing opportunity of hearing to the assessee. 5. The second dispute is regarding allowability of claim of bad debt amounting to Rs. 40,04,230/-. The assessee had not made claim in the return of income but the claim was made during the course of assessment proceedings. The AO apparently did not consider the claim as there is no specific mention of the claim in the assessment order. In appeal, the....