2014 (9) TMI 936

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....inivasulu ORDER Per P.M.Jagtap, Accountant Member : This appeal is preferred by the Revenue against the order of the learned Commissioner of Income-tax(Appeals) IV, Hyderabad dated 20.3.2013 and in the solitary substantive ground raised therein (as revised), the Revenue has challenged the action of the learned CIT(A) in deleting the TP adjustment made by the AO/TPO by accepting the Profit....

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.... appellant in this regard. The purpose of identifying the PLI is to ensure that the comparability analysis of the controlled transactions is objective. Reference may be made to the OECD Transfer Pricing Guidelines, 2010 in this regard, which are selfexplanatory. "2.88 The denominator should be reasonably independent from controlled transactions, otherwise there would be no objective starting po....

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....d office charges, rental fees or royalties paid to an associated enterprise, caution should be exercised to ensure that said controlled transaction costs do not materially distort the analysis and in particular that they are in accordance with the arm's length principle. 2.89 The denominator should be one that is capable of being measured in a reliable and consistent manner at the level of the ....

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....perating revenue ratio as the PLI and the third ground of appeal is allowed." 3. As noted by the learned CIT(A), the purpose of identifying the PLI is to ensure that the comparability of the controlled transactions is objective and reference in this regard was made by him to the OECD Transfer Pricing Guidelines 2010, wherein it was explained that the denominator should be reasonably independent....