TaxTMI 
TaxTMI 
2022 (8) TMI 35
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....n filed Cross Objection no. 157/Mum/2011 in ITA No. 157 /Mum/2011 for the same assessment year. 03. Assessee in ITA No. 5975/Mum/2010 has raised following grounds of appeal:- "This Appeal is against the Order of the Commissioner of Income Tax (Appeals) - 15 Mumbai, and relates to the Assessment Year 2005-2006, 1) The learned Commissioner of Income Tax (Appeals) erred in holding that in computing the deduction under Section 10A of the Act the loss of one eligible unit was required to be set off against the profit of the other eligible unit, and that the said loss could not be set off against the income computed under the head "Profits & Gains of Business or Profession". 2) The learned Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer in taxing the lease rent received for use of office space aggregating to Rs.3,17,26,468/- under the head "Income from House Property Having regard to the facts and circumstances of the case, the Appellant submits that the said income requires to be taxed under the head "Profits & Gains of Business or Profession": 3) The learned Commissioner of Income Tax (Appeals) erred in....
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....n confirming the action of the Assessing Officer in relying on the provisions of Section 14A of the Act and Rule 8D of the Rules while computing the amount liable for being added back to the book profits to be computed under section 115JB of the Act." 04. The learned assessing officer has raised following grounds of appeal:- 1. On the facts and circumstances of the case and are as well as in Law, the learned CIT (A) has erred in holding that the operating margin earned by the assessee company for its international transaction is higher than the arithmetic mean of margins of comparable companies , the assessee company is considered to have earned an Arm's-length operating margin in respect of the transactions with its associated enterprises 2. on the facts and circumstances of the case as well as in Law, the learned CIT (A) has erred in deciding that as the addition was made on account of transfer pricing adjustments, the other grounds like calculation of operating margins, benefit of deduction of +_5% Under proviso to Section 92C (2) et cetera, becomes of academic interest only and do not require any adjudication." 05. Brief facts of the case show that Asses....
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....D CAM CAE and PDM. The assessee entered into three types of international transactions. Assessee paid Rs.5,01,50,314/- for availing of marketing support services and rendered on site services of Rs.3,63,91,932/-and also rendered support services of Rs.6,83,41,998/-. These transactions were benchmarked by the assessee by adopting the Transactional Net Margin Method (TNMM) as the most appropriate method taking net margin as profit level indicator. Assessee selected 28 comparables, whose margin was 9.76% where as assessee‟s margin was 20.27% and therefore, according to assessee the international transactions are at Arm's Length Price. Reference was made to The Additional Commissioner Of Income Tax, Transfer Pricing - 1 (3) Mumbai (the learned TPO). The learned TPO found that assessee has taken a multiple year data and for other reasons he rejected the comparability analysis. Thereafter he carried out fresh search, selected 19 comparables, computed their profit level indicator of OP/TC of 27.70%, compared it with the margins of the assessee at 20.34 percentages and thereafter proposed an adjustment of Rs. 58,412,442 as Arm's-length price of the services rendered abroad. This was ....
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....er whereas the learned authorised representative submitted that learned AO does not have any grievance with respect to the comparability analysis but has merely challenged the finding of the learned CIT - A. 011. We have carefully considered the rival contentions. In fact the learned CIT - A has categorically, after including/excluded certain comparables computed the arithmetic mean of the comparable companies at 18.30%, compared with the margin of the assessee as computed by the TPO at 20.34% and as the margin of the assessee is higher than the margin of the comparables, he deleted the transfer pricing adjustment. Here, the learned assessing officer is not aggrieved with any of the comparables included or excluded by the learned CIT - A. Therefore, we do not find any merit in any of the 2 grounds raised by the learned assessing officer. Accordingly, those are dismissed. 012. In the result ITA number 6219/M/2010 filed by the learned assessing officer is dismissed 013. Now we come to the appeal of the assessee. Ground number 1 is against the order of the learned CIT - A in setting of the loss of one eligible unit against the profit of the other eligible unit. The learned Au....
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....rofit of the business. However, in the case in hand, the let out was not temporary, more so the leased out premises were never got vacated but were sold subsequently therefore the decision of the Hon‟ble Supreme Court do not support the case of the assessee. The assessee has also not submitted the copy of lease agreement neither before the Revenue authorities nor before us. 9.1. The Ld. Counsel for the assessee reiterated its alternative claim that the income should be taxed under the head "Other Sources‟. It is the say of the Ld. Counsel that the Ld. CIT(A) has himself contradicted his own evaluation of facts. On the one hand, the Ld. CIT(A) has observed that the provisions of Sec. 56(2)(iii) are applicable where the machinery, plant or furniture are let out alongwith building and letting out of building is inseparable from the letting out of said machinery, plant or furniture and on the other hand the Ld. CIT(A) observed that there was no machinery or plant which were let out alongwith the building. The Ld. Counsel further stated that the Ld. CIT(A) has dismissed the claim of depreciation holding that the items like UPS, Plant and machinery and furniture and ....