TMI Blog2015 (6) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... stock obsolesce and non moving inventory is an extraordinary time. Ld. CIT(A), has rightly made suitable adjustments by eliminating the said provision from the financial statements of the assessee and thereafter arriving at the operation margin for the purpose of comparability and benchmarking with the other comparables companies. Thus no infirmity in the well reasoned order passed by the Ld. CIT(A) on the issue in dispute - Decided against revenue. - I.T.A. No. 5769/DEL/2011 - - - Dated:- 25-3-2015 - Shri H.S. Sidhu And Shri J.S. Reddy JJ. For the Appellant : Sh. Judy James, Spl. Counsel/DR For the Respondent : S h. Himanshu Sinha, Adv. Anil Gupta, CA Archit Rastogi, CA ORDER Per H.S. Sidhu : JM This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 17.3.2006, assessee appealed before the Ld. CIT(A), who vide his impugned order dated 31.10.2011 has partly allowed the appeal of the assessee. 4. Aggrieved with the order of the Ld. CIT(A), Revenue is in appeal before the Tribunal. 5. After hearing the rival contentions, we find that Ld. CIT(A) has held as under:- 4.6 Assessee did not create any provision of stock obsolesce / non moving inventory during the previous years (i.e. AY 2001-02 and AY 2002- 03) and subsequent year (i.e. A.Y. 2004-05). Further, an analysis of stock obsolescence to sales ratio for the comparables companies (as provided by the appellant) is reproduced below:- Name of the Company Obsolete inventory (A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng expense for the comparable companies and the Appellant, then the analysis is as follows:- Name of the company (As per TPO s order) Operating Margin, as per TPO s order Provision for stock obsolescence Revised Operating Margin Escorts Pistons Ltd. (merged) -2.62% - 2.62% Greaves Ltd. 0.14% - 0.14% Kirloskar Oil Engineers Ltd. 10.52% 1.03% 11.55% Precision Pipes Profiles Co. Ltd. 16.48% - 16.48% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and on the other hand it is the comparables. As can be seen from the calculation above, margin of the assessee is above that of the comparables. Therefore, the AO is directed to delete the additions made on account of transfer pricing adjustment. Since the assessee s ALP is above the margin of the comparables proviso to section 92C(2) is not applicable in this case. 5.1. From the above finding of the Ld. CIT(A), we find no infirmity in the same. The assessee in this case has created a provision for obsolete stocks. Admittedly, such the provision for obsolesce stock has not been made by any of the companies, which are taken as comparables as per the TPO s order, except for Kirsolkar Oil Engines Ltd. where the provision for stock obso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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