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TMI Blog2013 (11) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... esh after giving assessee adequate opportunity of being heard. - ITA No. 3484/Del/2011 - - - Dated:- 6-9-2013 - R P TOLANI AND J. S. REDDY, JJ. For the Appellant : Rohit Tiwari. For the Respondent : Satpal Singh. ORDER:- PER : R. P. Tolani This is an assessee's appeal challenging Assessing Officer action of making an adjustment of Rs. 8,008,161 in the international transactions on various issues. At the time of hearing ld. counsel for the assessee contends that except issue raised in ground No. 2. No other issues are pressed which are dismissed accordingly. This leaves us with ground No.2 which is as under: "2. The Ld. CIT(A)/Assessing Officer grossly failed to appreciate that during the relevant assessment yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stment on various grounds and by further holding that the assessee was working as manpower sourcing and support services provider and assumed all the operational/ business risks like market risks, foreign exchange risks, capacity risks. 5. Aggrieved assessee preferred first appeal ld CIT(A) dismissed the assessee appeal by upholding the TPO/Assessing Officer and also holding/rejecting assessee's plea about capacity under utilization and held that since the appellant was engaged in recruiting highly technical and skilled employees, and thus in the business of services, a business loss is least expected and hence the loss was obviously due to the transfer price of the international transactions pertaining to services. 6. Aggrieved assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited wherein ITAT has held that the economic adjustment on account of under capacity utilization being the first year of operation is appropriate in the mechanism of transfer pricing assessments the relevant observations are as under: "The plea set-up by the assessee for economic adjustments on account of under capacity utilization and being in start up phase, is not something which is unreasonable and neither it is otiose to the mechanism of transfer pricing assessments. In our view, the matter requiring factual appreciation, the same is remanded back to the file of the Assessing Officer, who shall consider the proposition put forth by the assessee and allow economic adjustments on a reasonable basis. 7. Further, the principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment, this proposition has been held by co-oridnate Bench in the case of the Amdocs Business Services (P.) Ltd. (supra) and various other cases as cited here in above. 11. In the given facts and circumstances it was required on the part of the lower authorities to have given due effect to under capacity utilization of the assessee which has not been done TPO for adjustment for ALP determination. In view of the facts and circumstances we are inclined to set aside the matter and restore the issue of under capacity utilization back to the file of the Assessing Officer /TPO to decide the same afresh after giving assessee adequate opportunity of being heard and to file the necessary evidence on this behalf. Needless to say that a proper and s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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