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Commissioner of Income Tax, Panaji, Goa Versus M/s. Pentair Water India Pvt. Ltd.

2016 (5) TMI 137 - BOMBAY HIGH COURT

Selection of comparability - Transfer pricing adjustment - whether tribunal has erred in holding that the profits on costs of five comparable companies as abnormal without giving reasons how the functions discharged, assets deployed and risks assumed of such companies were different from the Respondent-Company - Held that:- Appellant-Revenue has not been able to controvert or deny the data relied upon by the Authorities below to come to such conclusion. The said Companies are no doubt large and .....

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ining similar circumstances for the assessment year 2005-06. He has taken us through the findings therein to point out that the conclusions arrived at are based on a comparison that the condition in any uncontrolled transaction between an independent enterprises for the purpose of such comparison, economically relevant characteristics must be sufficiently comparable if two parties are to be placed in a similar situation. Learned Counsel as such submitted that it is not open for the appellant to .....

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pondent : Mr. Jitendra Jain, Advocate with Ms. Sumedha Joshi, Advocate ORAL ORDER (Per F. M. Reis, J.) Heard Ms. Asha Desai, learned Counsel appearing for the Appellant and Mr. Jitendra Jain, learned Counsel appearing for the Respondent. 2. Briefly, it is the contention of the Appellant that the Assessee- Respondent is engaged in the business of manufacture of fibre glass pressure vessel used for water treatment, swimming pool equipments and that the Respondent-Company is making three kinds of v .....

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it at Verna Industrial Estate where the said manufacturing activity is taking place. It is further their case that the Respondent-Assess has filed returns of Income on 30.10.2007 disclosing total income of ₹ 5,28,09,795/- on which total tax was ₹ 1,81,13,280/-. An Order under Section 92CA was passed on 27.10.2010 by the TPO and the AO on 21.12.2010 added an amount of ₹ 1,68,60,877/- in the Order passed under Section 143 (3) of the said Act. It is further the contention of the A .....

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rder, the Appellant has preferred the present Appeal. 3. Ms. Asha Desai, learned Counsel appearing for the Appellant, has pressed for only two substantial questions of law framed at para 5A and 5B of the Appeal Memo. Learned Counsel has further pointed out that the Income Tax Appellate Tribunal has erred in holding that the profits on costs of five comparable companies as abnormal without giving reasons how the functions discharged, assets deployed and risks assumed of such companies were differ .....

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the conclusion that the said Companies are not comparable to the Respondent- Assessee Company and, as such, this Court cannot re-appreciate the evidence on record to come to any concurrent finding. Learned Counsel further submits that these concurrent findings of facts based on the material on record cannot be reappreciated by this Court in the present Appeal as there is no substantial question of law which arise therein. Learned Counsel further pointed out that to answer the said two substanti .....

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three companies are comparable by stating as follows : (I) HCL Comnet Systems & Services Ltd :- We find force in the submission of the ld. AR that this company cannot be a comparable as the turnover of this company is 260.18 crores while in the case of the Assessee, the turnover is around ₹ 11 crores only. While making the selection of comparables, the turnover filter, in our opinion, has to be the basis for selection. A company having turnover of ₹ 11 crores cannot be compared w .....

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essee's turnover. We, therefore, do not find any illegality or infirmity in the order of CIT(A) in excluding this Company out of the comparables. Accordingly, we confirm the order of the CIT(A). (iii) Wipro Ltd. :- After hearing the rival submissions, we noted that the CIT(A) applying the turnover filter has excluded this company out of the comparables. The turnover reported in the case of Wipro Ltd. Is ₹ 939.78 crores while in the case of the Asseessee the turnover is around ₹ 1 .....

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em (India)(P.) Ltd. vs DCIT,, 53 Sot 159 (Bang) 6. The said findings of the Tribunal in respect of the said three Companies are on the basis of appreciation of evidence on record. We find no infirmity in the said findings of the Tribunal on that count. In fact, the Tribunal has endorsed the views of the CIT Appeals whilst coming to such conclusions. The concurrent findings of facts arrived at by the Authorities below, cannot be reappreciated by this Court in the present Appeal. 7. In this connec .....

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he evidence, or when the evidence has been misread. (See Madan Lal v. Gopi, Narendra Gopal Vidyarthi v. Rajat Vidyarthi, Commr. of Customs v. Vijay Dasharath Patel, Metroark Ltd. v. CCE and W.B. Electricity Regulatory Commission v. CESC Ltd) 8. In the present Appeal, the Appellant-Revenue has not been able to controvert or deny the data relied upon by the Authorities below to come to such conclusion. The said Companies are no doubt large and distinct companies where the area of development of su .....

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