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| The Tax Publishers2020 TaxPub(DT) 4493 (Del-Trib) INCOME TAX ACT, 1961
Section 92C
There could be no estoppel against assessee to plea for exclusion of entity wrongly selected as comparable. In case of Roto Pumps, major sale turnover was in the form of export sales, i.e., to the extent of 60% as against export turnover of the assessee at 5.%. Further, Roto Pumps was also having different product segment of spare parts, wherein sale of spares was to the extent of 50% in contrast to sale of finished products by assessee. In these circumstances, Roto Pumps was to be excluded from final list of comparables.
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Transfer pricing - Determination of ALP - Selection of comparables - Assessee seeking exclusion of company suggested by itself as comparable
Assessee, engaged in manufacturing of hydraulic drive pumps and control systems used in the automobile and agriculture-industry, etc., entered into transactions with its AE abroad. TPO considered Roto Pumps Ltd. as comparable. Assessee sought for exclusion of Roto Pumps Ltd. TPO rejected this on the ground that Roto Pumps Ltd. was suggested by assessee itself as comparable.Held: There could be no estoppel against assessee to plea for exclusion of entity wrongly selected as comparable. In case of Roto Pumps, major sale turnover was in the form of export sales, i.e., to the extent of 60% as against export turnover of the assessee at 5.%. Further, Roto Pumps was also having different product segment of spare parts, wherein sale of spares was to the extent of 50% in contrast to sale of finished products by assessee. In these circumstances, Roto Pumps was to be excluded from final list of comparables, both on geographical differences and also on being functionally not comparable to the assessee.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
INCOME TAX ACT, 1961
Section 92C
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