2026 (4) TMI 1243

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....pany incorporated on 14.08.2009 in the State of Tamil Nadu and is a wholly owned subsidiary of Eversendai Constructions (S) Pte Ltd, Singapore, ultimately held by Eversendai Corporation Berhad, Malaysia. The assessment year under consideration represents the assessee's first full-fledged year of operations. The assessee is engaged in the business of engineering, design, detailing, steel fabrication, and development of residential and commercial buildings. During the relevant year, the assessee entered into the following international transactions with its Associated Enterprises ("AEs"): Nature of transaction Amount (Rs.) Purchase of steel 4,71,02,873 Erection, testing and commissioning 5,77,86,046 Engineering design ser....

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....city adjustment is sustainable. Issue 2: Whether the working capital adjustment should include all relevant operating current assets and liabilities. 6. We will take up Issue 1- Idle Capacity Adjustment: The ld.AR for the assessee submitted that underutilization of capacity is with respect to resources of a company and not specific to "manufacturing capabilities". Idle capacity is bound to exist in all industries. Depreciation, rent and salary paid are fixed costs which are bound to be better absorbed as the revenues of the company increases. She further submitted that the Assessee is in its first full- fledged year of operations and that it has taken dedicated efforts to invest in building employees with strong expertise in ....

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....A.Y 2004-05] & ITA No. 1117/DEL/2012 [A.Y 2005-06)) (Paras 39 to 43 of Page Nos 30 to 32 of the Caselaw paper book); c. Mando Limited (L.T.A. No. Private India Steering Systems 2092/Mds/2012) (Para 10 of Page Nos 44 & 45 of the Caselaw paper book); d. Kyocera CTC Precision Tools Pvt. Ltd. Vs. DCIT (ITA No.233/Kol/2022) (Paras 8, 8.1 & 8.2 of Page Nos 64 to 66 of the Caselaw paper book) and e. Amdocs Business Services P Ltd vs DCIT (ITA NO.1412/PN/11) (Paras 8 & 9 of Page Nos 77 to 79 of the Caselaw paper book). Per contra, the ld.DR for the revenue relied upon the orders of the TPO and CIT(A). rejected the adjustment, treating it as non- comparable or inapplicable. Our Adjudication on Issue 1- Idle Capacity ....

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....relevant line items such as unbilled revenue, prepaid expenses, and other components that materially impact profitability of the Assessee vis-à-vis the comparables. The detailed computation has been enclosed as Appendix 2 to this submission. She also placed reliance on the following judgments by the assessee in support of its claim of inclusion of the above items for working capital adjustment: a. HCL EAI Services Limited Vs. DCIT (IT(TP)A No. 1348/Bang/2011) (Paras 29 to 31 of Page No 130 of the Caselaw paper book)' b. GL&V India Private Limited (ITΑ Νο.2252/PUN/2017) (Paras 5.6 & 5.7 of Page Nos 139 to 141 of the Caselaw paper book); c. Mercedes-Benz Research and Development India (P.) Lt....