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| The Tax Publishers2020 TaxPub(DT) 2498 (Del-Trib) INCOME TAX ACT, 1961
Section 92C
Assessee engaged in purchase of spare parts and equipments from AE and thereupon selling it to third parties in India, addition made by TPO to ALP was unjustified, by including a comparable, which was paying excise duty on its manufacturing activity as it could not be treated as pure trader of products like assessee.
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Transfer pricing - Computation of ALP - Selection of comparables - Comparable company paying excise duty, whether comparable to assessee-trader
Assessee company was subsidiary of a Norway based company. It was engaged in purchase of spare parts and equipment used in power plants and it sold the same to parties in India. Assessee contended that a comparable selected by TPO was paying excise duty on sale of products and, thus, said company not being purely engaged in trading was to be excluded from list of comparables. Held: Since excise duty is primarily payable on manufacturing activity and, in absence of any detail, comparable company could not be treated as pure trader of products. Therefore, addition was to be set aside and TPO was directed to exclude company from list of comparables.
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2013-14
INCOME TAX ACT, 1961
Section 92C
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