TMI Blog2020 (7) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies at Sr. No.2 3 have incurred losses in two financial years. Thus, none of the above said three companies fall within the ambit of persistent loss making companies. The CIT (A) has directed the TPO to include AMI Computer (I) Ltd., Mercury Travels Ltd. and Nucleus Netsoft GIS India Ltd. as these are not continuous loss making companies. We concur with the findings of CIT (A). The impugned order is upheld, ergo, the appeal of revenue is dismissed sans merit. - ITA NO.6397/MUM/2006 ITA NO.1548/MUM/2009, C.O.No.171/Mum/2009, (Arising out of ITA No.1548/Mum/2009) - - - Dated:- 31-7-2020 - SHRI VIKAS AWASTHY, JUDICIAL MEMBER SHRI S.RIFAUR RAHMAN, ACCOUNTANT MEMBER Appellant by : Shri Uodhal Raj Singh Respondent by : Shri Dhanesh Bafna Ms. Hirali Desai ORDER PER VIKAS AWASTHY, JM: These appeals by the Revenue are for the assessment year 2003-04 and 2004-05. The assessee has filed Cross Objections in the appeal by Revenue for assessment year 2004-05. We will first take-up the appeal of Revenue for AY 2003-04. ITA NO.6397/MUM/2006 - A.Y.2003-04: 2. This appeal by the Revenue is directed against the order of Commissioner of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that these companies have incurred losses during the year under consideration. After excluding above 5 companies the TPO computed mean of remaining 4 comparable companies at 34.96% and made upward adjustment of Rs.1,41,06,903/-. 3.1. The assessee assailed the adjustment before the CIT (A). The CIT(A) vide impugned order accepted the contentions of assessee with regard to three companies i.e. AMI Computer (I) Ltd., Mercury Travels Ltd. and Nucleus Netsoft Gis India Ltd. and directed the Assessing Officer to include the same in the final set of comparables. With the inclusion of aforesaid three companies in the final list of comparables, the margin of the assesse is within +/- 5% range and hence, TP adjustment did not survive. 3.2. The ld. Authorized Representative of the assessee submitted that AMI Computer (I) Ltd., Mercury Travels Ltd. and Nucleus Netsoft GIS India Ltd. are not consistent loss making companies. He referred to Para-7 of the TPO s order, wherein Vans Information Ltd. was excluded from the list of comparables being continuous loss making company and the assesse has not disputed exclusion of same. He further furnished financials of the three companies to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court for adjudication was: Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in setting aside the order of the CIT (A) and remanding the matter to the AO for fresh adjudication? Answering the substantial question in negative, the Hon'ble High Court vide order dated 17-7-2012 set-aside the impugned order and directed the Tribunal to decide the appeal afresh. The relevant extract of the directions by Hon'ble Bombay High Court are reproduced herein below:- 9. In view of the statement on behalf of the assessee, the question of law is decided in favour of the assessee. The appeal is therefore, allowed in terms of prayer (b) which reads as under:- b) This Hon ble Court may be pleased to set aside the impugned order and direct the Tribunal to decide appeal afresh after hearing both parties . This appeal in second round before the Tribunal is taken-up for adjudication in pursuance to the above directions of the Hon'ble Bombay High Court. 6. From the submissions made by rival sides it emerges that the sole dispute in the present appeal is selection of comparables. The assessee in transfer pricing st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is tabulated as under:- Sr.No. Name of the Company Financial year Net Profit/(Loss) (amount in Rs.) 1. AMI Computes (I) Ltd. 2000-01 2001-02 2002-03 58,21,187 2,98,372 (3,48,22,572) 2. Mercury Travels Ltd. 2000-01 2001-02 2002-03 59,47,110 (1,96,38,797) (2,82,76,139) 3. Nucleus Netsoft GIS India Ltd. 2000-01 2001-02 2002-03 9,70,946 (32,64,757) (40,07,218) From perusal of the above table it is evident that the company at Sr.No.1 has suffered losses in only one year and the companies at Sr. No.2 3 have incurred losses in two financial years. Thus, none of the above said three companies fall within the ambit of persistent loss making companies. The CIT (A) has directed the TPO to include AMI Computer (I) Ltd., Mercury Travels Ltd. and Nucleus Netsoft GIS India Ltd. as these are not continuous loss making compan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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