TaxTMI 
TaxTMI 
2013 (11) TMI 65
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....CIT(A)/Assessing Officer grossly failed to appreciate that during the relevant assessment year, the Appellant's business was adversely impacted by unutilized capacity which resulted in unabsorbed overheads and operating losses." 2. Brief facts of the case are that the assessee is a Global Turbine Services Inc. (India Branch Office) ('GTSI India' for short) was incorporated on 22.09.2003 as Indian Branch of the parent company. This is the first and last of the assessment of the branch office entity as there after the parent company started a subsidiary in the name and style of Global Turbine Service India Ltd on the same line of business activity as that of assessee. 3. During this financial year the assessee was engaged in manpower sourci....
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....iwari contends that:- (i) The appellant had commenced its operations in September 2003 and FY 2004-05 was the first full year of its operations. In AY 2005-06, the appellant had shown income of Rs.43, 539,119 against the expenditure of Rs. 44,271,913 resulting in a loss of Rs. 732, 795 in this gestation period on account of inadequate volumes of work generated during the year. (ii) Creation of capacity was a business Investment for the appellant and such an Investment was necessary during the gestation period and would be borne by any independent company in its initial years. Even from the accounting point of view, with the increase in turnover, the fixed cost gets apportioned. When the tu....
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....nts on a reasonable basis. 7. Further, the principle of capacity adjustment for consideration of T.P. adjustments has also been upheld by the ITAT in the below mentioned rulings * Mentor Graphics Noida (P.) Ltd. v. Dy. CIT [2007] 109 ITD 101 (Delhi) * Fiat India (P.) Ltd. v. Dy. CIT IT Appeal No. 1848/Mum/2009. * CRM Services India Private Limited. * Genisys Integrating Systems (India) Pvt Ltd (2011-TII-96-ITAT-BANG-TP, ITA No. 1231 (Bang.)/2010, ITAT Bangalore, Assessment Year: 2006-07) * Brintons Carpets Asia Private Limited (ITA No.1296/PN/10. 8. Ld. Counsel for the assessee further requests to admit the add....