TMI Blog2014 (1) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant details were already available on record and the assessee simply required the examination of its claim before the CIT(A) – Following Dy. CIT v. Quark Systems (P) Ltd.[2009 (10) TMI 591 - ITAT, CHANDIGARH] – Decided against Revenue. Adoption of Cash profit to Operating cost as the PLI – Held that:- The CIT(A) has allowed the claim of exclusion of depreciation by considering the fact that in subsequent assessment year i.e. 2007-2008 TPO has accepted the same, thus, the principle of consistency cannot be ignored – the CIT(A) was justified in applying Cash profit/Operating cost as the correct PLI under Transactional Net Margin Method and resultantly deleting the addition – Decided Against Revneue. - IT Appeal No. 9177 (Mum.) of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on straight line policy taking useful life of the assets varying from 2 to 5 years. In contrast to that, it was pointed out that the finally comparable companies shortlisted by the TPO adopted the depreciation rates prescribed under Schedule XIV of the Companies Act, which were significantly lower. Relying on certain decisions, it was requested that the ratio of Cash profit to Operating cost should be considered as the PLI. The assessee furnished a calculation of ratio of Cash profit/Operating cost for comparables as well as its own to demonstrate that the arithmetical mean of the TPO's comparable cases by applying such PLI was at 43.07% as against the assessee's 45.93%, requiring no transfer pricing adjustment. The learned CIT(A) remitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preciation in assessee's case did not come to be considered for the first time. The assessee had reported this fact in Notes to its Financial Statement that the depreciation on equipments was charged on straight line basis on the original cost in accordance with the policy of charging depreciation taking useful life of 2 to 5 years. Such Note is available on page 11 of the paper book. In view of the fact that all the relevant details in this regard were already available on record and the assessee simply required the examination of its claim before the CIT(A), respectfully following the Special Bench order in the case of Dy. CIT v. Quark Systems (P) Ltd. [2010] 38 SOT 307 (Chd.), we find no infirmity in the order of the ld. CIT(A) in entert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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