https://www.taxtmi.com/caselaws?id=311835 The ITAT Pune ruled on transfer pricing adjustments under TNMM method. The tribunal held that depreciation should be included in operating costs when calculating PBIT/Sales ratio, rejecting the assessee's argument for PBDIT/Sales. No adjustment was allowed for depreciation differences between companies, as higher depreciation typically correlates with lower repair costs. Federal-Mogul Bearings India Ltd. was properly excluded from comparables due to functional differences - it engaged in both trading and manufacturing without discernible segmental information. The tribunal upheld granting +/-5% margin for ALP determination under section 92C(2) proviso. While accepting Revenue's ground regarding certain comparable companies' inclusion, no additional transfer pricing adjustment resulted as the assessee's profit margin remained within permissible range. en-us Fri, 07 Jun 2019 00:00:00 +0530 Tue, 16 Jan 2024 21:19:54 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=311835 The ITAT Pune ruled on transfer pricing adjustments under TNMM method. The tribunal held that depreciation should be included in operating costs when calculating PBIT/Sales ratio, rejecting the assessee's argument for PBDIT/Sales. No adjustment was allowed for depreciation differences between companies, as higher depreciation typically correlates with lower repair costs. Federal-Mogul Bearings India Ltd. was properly excluded from comparables due to functional differences - it engaged in both trading and manufacturing without discernible segmental information. The tribunal upheld granting +/-5% margin for ALP determination under section 92C(2) proviso. While accepting Revenue's ground regarding certain comparable companies' inclusion, no additional transfer pricing adjustment resulted as the assessee's profit margin remained within permissible range. Case-Laws Income Tax Fri, 07 Jun 2019 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=311835