TMI Blog2014 (3) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... I 25 - DELHI High Court] – the order of the FAA is upheld – Decided against Revenue. Deletion made u/s 92CA(3) of the Act – Transfer Pricing Adjustment – Held that:- Infomedia India Ltd. is a company which is engaged in the business of printing and publishing which is totally a different line of business vis-a-vis assessee's business of trade fares and exhibitions - the rejection of this comparable by the CIT(A) is upheld - The only other relief given is that the TPO was directed to exclude domestic transactions in computation while computing adjustment based on ALP of international transactions – there was no infirmity in the finding as transfer pricing adjustments are to be confined only to international transactions – Decided against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was submitted that as is clearly evident from the accounts, the assessee company is having a negative capital base (net worth), if the effect of this capital receipt is excluded, as a result of which it would have not been possible for the company to carry on its operations at all. It was submitted that the purpose of this receipt from the promoters (shareholders) is to provide long term enduring benefits by way of revival of the company and restoration of its capital base. 3. The A.O. for the reasons given in his order at page 3 and 4 held that the receipt in question is in the Revenue field. He further made addition of transfer pricing adjustment of Rs.1,10,55,815/-, based on the order of the TPO. Aggrieved the assessee carried th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company, which was required for revival of the same. He referred to page 25 of the paper book which is a copy of the permission letter given by Reserve Bank of India dated 5th November,2004 and pointed out that the amount was given only to meet the accumulated losses of CIDEX and not for the erosion of net worth. He referred to page 28 of the paper book and submitted that the assessee has reserves and surplus. The sum and substance of his submission is that RBI permitted the assessee to receive the amount in question for recoupment of accumulated losses. He distinguished the judgments relied upon by the Ld.CIT(A). 6. The Ld.Counsel for the assessee on the other hand relied on the order of the First Appellate Authority and supported the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company had incurred accumulated losses and this has resulted in erosion of net worth. The parent company received non refundable financial assistance of upto Euros 6 lakhs from its shareholder company. The proposal with RBI which is a letter, a copy of which is placed at pages 16 to 21 of the paper book, states as follows. The sole purpose of providing the financial assistance, we reiterate, is: - to restore the erosion in the capital of the company, - to place at the disposal of CIDEX liquid resources that will enable it to focus on its business operations - not to burden CIDEX with additional costs and liabilities. We would further reiterate that : - the monies provided by both the shareholders are not refundable and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT, 140 ITR 532. 6 9.5. Applying the binding decision we uphold the order of the First Appellate Authority and dismiss these grounds of Revenue. 10. Ground no.3 is against deletion of transfer pricing adjustment. The Ld.CIT(A) in his order had accepted the method adopted by the TPO as the most appropriate method. Hence the Revenue has no grievance. The Ld.CIT(A) also accepted all the comparables adopted by the TPO except in the case of one comparable i.e. Infomedia India Ltd. We find that Infomedia India Ltd. is a company which is engaged in the business of printing and publishing which is totally a different line of business vis a vis assessee's business of trade fares and exhibitions. Hence the rejection of this comparable by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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