« ITAT-Constitution of Benches » Open DEMAT Account in 24 hrs  Amrit Bottlers Pvt. Ltd. Kolkata vs Department Of Income Tax  ITAT ruling: Cryptocurrencies now recognized as capital assets for taxation  ITAT upholds Possession Date for Capital Gains Tax Exemption  ITAT deletes addition of Cash Deposit against Opening Balance during demonetization  Mere Securing a House on Rent in USA is not conclusive fact that Assessee is US Resident to Allow DTAA Benefit: ITAT  20 LPA Opening Hiring Qualified CA For Assurance Manager Profile  Non-Filing of Income Tax Return amounts to Escapement of Income: ITAT upholds Reassessment u/s 147  Non Appreciation of facts in true perspective: ITAT sets aside Revision Order  No Evidence of Tax Evasion by showing Fictitious or False Transactions: ITAT deletes Addition of Expenditure u/s 40A(3)  Earning Interest Income from Inter-Corporate Deposit is Business Income: ITAT  Income Tax Penalty u/s 271E cannot be levied in the absence of Regular Assessment: ITAT «  Ahmedabad Benches - Constitution... Nandi Steels Ltd vs. ACIT (ITAT Bangalore Special Bench)... » Demag Cranes & Components (India) vs. DCIT (ITAT Pune) January, 16th 2012 Transfer Pricing: TPO is duty bound to eliminate differences in comparables data   In a Transfer Pricing matter, the Tribunal had to consider whether for purposes of making adjustment under Rule 10B (1)(e)(iii) working capital constituted a difference between the international transactions and the comparable uncontrolled transactions of between the enterprises entering into such transactions and if so whether the said difference could materially affect the amount of net profit margin of relevant transactions in the open market. HELD by the Tribunal:   Rule 10B(e)(iii) provides that the profit margin arising in comparable uncontrolled transactions has to be adjusted to take into account the differences, if any between the international transaction and the comparable uncontrolled transactions, or between the enterprises entering into such transactions, which could materially affect the amount of net profit margin in the open market. While the differences are not specified, it covers any differences which could materially affect the amount of net profit margin. The litmus test to be applied is if the difference, if any, is capable of affecting the NPM in open market? If yes, then the TPO is under statutory obligation to eliminate such differences. The revenue cannot say that difference is likely to exist in all accounts and so the demands of the assessee should be ignored. The revenues stand that the assessee is ineligible for any adjustments if he provides the set of comparable is not correct because under Rule 10(3) it is the duty of the AO/TPO/DRP to minimize/eliminate the difference which is likely to materially affect the price. It is the settled proposition that working capital adjustment is an adjustment that is required to be made in TNMM. The revenues contention that the differences specified should refer to only (i) the factor of demand and supply; (ii) existence of marketable intangibles i.e. brand name etc; (iii) geographical location and the like is not acceptable. Further, as the difference in the Arms length Operating Margin of the Comparables before and after making the adjustment for working capital was up to 3.77%, it was material and had to be eliminated (Mentor Graphics 109 ITD 101 (Del), E-gain Communication 118 ITD 243 (Pune) Sony India 114 ITD 448 (Del) & TNT India followed)