TaxTMI 
TaxTMI 
2013 (11) TMI 141
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....n 92CA(3) of the Income-tax Act, 1961. 2. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) erred in holding that payments made to provident fund and employees' State insurance corporation authorities even beyond the grace period provided under the respective law are allowable as deductions, contrary to the provisions of section 43B of the Income-tax Act, 1961." Ground No. 1 pertains to the issue of transfer pricing, while ground No.2 pertain to the issue of amounts paid beyond the grace period towards provident fund and employees' State insurance disallowed under section 43B. The assessee is an Indian company engaged in the business of international transportation servic....
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....rnational transactions entered into by the assessee. Based on the functional analysis, the comparable uncontrolled price (CUP) method was determined to be the most appropriate method. For the purpose of the comparable uncontrolled price analysis, a similar agreement between the associate enterprise and Elbee Services Ltd. ("Elbee"), was considered to constitute a comparable uncontrolled transaction. Based on the above analysis, it was concluded in the transfer pricing report that the international transactions were undertaken at arm's length standard. During the assessment proceedings, the Transfer Pricing Officer asked the assessee to provide reasoning as to why the transactional net margin method ("TNMM") should not be applied and c....
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....as made in this case. On the above basis the Transfer Pricing Officer passed an order dated November 28, 2006 under section 92CA(3) and made an upward adjustment of Rs. 9,35,48,886 to the value of the international transactions of the assessee. The Assessing Officer relied upon the order of the Transfer Pricing Officer and made an addition of Rs. 9,35,48,886 to the total income of the assessee in the order issued under section 143(3) of the Act. Before the Commissioner of Income-tax (Appeals) it was contended that the Transfer Pricing Officer wrongly considered the entity-wise margin of one of the comparable companies, i.e., Patel On-Board for the purpose of benchmarking the assessee's margin under transactional net margin method. On fur....
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....to be benchmarked in the assessee's case." The revised margin computation of UJEL, Patel On-Board and Sky park is as follows : Particulars UJEL (as per Transfer Prici-ng Officer's order dated June 28, 2006) (Rs.) Skypark Service Specialist Ltd. (Rs.) Patel On-Board P. Ltd. (Co-loading segment) (Rs.) Operating income (A) 13,12,29,853 26,99,19,243 1,08,68,01,494 Expenses Operating expenses 1,34,42,32,269 25,86,28,921 1,08,68,01,494 Other expenses Bank charges (refer note in case of Patel on Board) 9,46,092 8,74,867 71,94,331 Provision for doubtful advances 72,24,....
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....o Rs. 13,61,654,102 whereas the appellant's price is Rs.13,52,402,382. As such it falls within the permitted Añ5 per cent. range under section 92C. 3.21. To conclude, the appellant's corrected margin of ƒ_"3.06 percent as per the remand report of the Transfer Pricing Officer-II, is considered to be at an arm's length level. Accordingly, the addition of Rs. 9,35,48,886 made by the Assessing Officer on account of transfer pricing adjustment is deleted." After hearing the learned Departmental representative and the learned assessee's counsel, we do not see any reason to interfere with the order of the Commissioner of Income-tax (Appeals) as the Commissioner of Income-tax (Appeals) based his order on the revised Transfer Prici....