TaxTMI 
TaxTMI 
2014 (4) TMI 622
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....Assessing Officer has moved a petition praying that the delay be condoned. Learned counsel for the assessee does not oppose this marginal delay in filing of the appeal. Having perused the petition, and having heard rival contentions on the same, we deem it fit and proper to condone the delay and take up appeal for disposal on merits. 3. Grievances of the Assessing Officer, relate to learned CIT(A)'s deleting the arm's length price (ALP) adjustment amounting to Rs 5,72,16,360, and are as set out below: 1. On the facts and circumstances of the case, the Ld. CIT(A) has erred in using the margins of the assessee after allowing for adjustment for capacity utilization. As per A.O., the ca....
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....rnational transaction will not be correct reflection of economic activities undertaken by the assessee". The assessee was not satisfied with the stand so taken by the TPO and the matter was carried in appeal before the CIT(A). Learned CIT(A took note of assessee's submission that the assessee's production in the relevant previous year was much below the installed capacity, that such capacity underutilization explained higher fixed costs and lower profits, and that the assessee's brands, i.e. ' National' and ' Panasonic', were premium brands with high end prices whereas Indian television market was dominated by certain Korean brands which were producing high volumes on the basis of low profits. Learned CIT(A) was ....
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....rofit margin in open market. Capacity underutilization by enterprises is certainly an important factor affecting net profit margin in the open market because lower capacity utilization results in higher per unit costs, which, in turn, results in lower profits. Of course, the fundamental issue, so far as acceptability of such adjustments is concerted, is reasonable accuracy embedded in the mechanism for such adjustments, and as long as such an adjustment mechanism can be found, no objection can be taken to the adjustment. In our considered view, the learned CIT(A)'s approach is reasonable in this regard and the adjustments are on a conceptually sound basis. In any case, as pointed out by the learned counsel, the adjustments so directed b....
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.... that the assessee, at the appellate stage, prayed for admission of these comparables. Learned CIT(A), relying upon Special Bench decision in the case of Quark Systems (supra), has held that there cannot be any estoppel against pointing out assessee's own errors in selection of comparables and that aspect of the matter is to be decided on merits, and on merits as also since the AO has not made any submissions against the same in remand report, these additional comparables can be accepted. So far as second facet of this dispute, i.e. exclusion of Videocon International, is concerned, the reasoning adopted by the CIT(A) in the exclusion is this. It is observed that Videocon is not a comparable company because its turnover is substantially....
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.... as was done to argue on unsuitability of Videocon International, was also done on the other comparables. Learned counsel admittedly his inability to do so but fairly accepted that the matter can be remitted to the file of the learned CIT(A) for fresh adjudication by applying uniform norms on the analysis of all the entities picked up as comparables. Learned Departmental Representative was also satisfied with this course of action. In our considered view also, there cannot be a cherry picking for deciding parameters of rejection of a comparable, and the parameters have to be broad enough of being general application. In the scheme of things envisaged under the TNMM, it is inevitable that there will be some differences between the comparable....