TMI Blog2016 (12) TMI 1414X X X X Extracts X X X X X X X X Extracts X X X X ..... o show that the profit of the comparable companies had been hit by a strike. The profit margin of the comparable company was required to be adjusted after taking into account a strike like situation as had taken place in the assessee company. Our order would show that qua question no. 1, we have upheld the order of the Tribunal remitting the matter to the TPO for fresh assessment in accordance with law. Questions no. 4 and 5 are also to be decided afresh. While deciding question no. 1, the second question would also be considered and decided by the TPO on making appropriate adjustments in the profit margin of the comparable company after taking into account a strike like situation in the comparable company as had taken place in the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done by the Assessing Officer instead of the Transfer Pricing Officer (TPO). On 24.09.2016, we had re-called our order dated 26.08.2016 to the limited extent that the second question of law would be decided by us afresh. The correction in the order dated 26.08.2016 qua question no. 5 was made that on remand, the issue which was the subject matter of question no. 5 would be determined by the Assessing Officer and not the TPO. We now proceed to answer the second question raised in the appeal. Before the TPO, the appellant-assessee had claimed an adjustment in the operating margin of the assessee on account of a strike in the assessee Company. It was submitted that the strike adversely effected the production/sales of the assessee but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee had not demonstrated that the operating expenses during the months preceding and succeeding the strike period were at any higher level and that as per the production chart submitted by the assessee, there was production even during the strike period. The Tribunal further held that on the happening of any abnormal event like a strike, it would be the net operating profit margin of the comparable companies, which would need adjustment to bring both the international transactions and comparable costs at the same pedestal and that such adjustment was not to be made in the net operating profit margin of the assessee. Since the assessee had failed to bring on record any material to the effect that profit of any of the comparable entiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the international transaction by the assessee Company and that of the comparable company at the same pedestal. According to us, the Tribunal, after rightly observing that the adjustments in the net operating profit margin on account of any strike etc. was to be made in the profit margin of the comparable company, erred in rejecting the case of the assessee Company on the ground that the assessee had failed to bring on record any material to show that the profit of the comparable companies had been hit by a strike. The profit margin of the comparable company was required to be adjusted after taking into account a strike like situation as had taken place in the assessee company. Our order dated 26.08.2016 would show that qua question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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