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TMI Blog2014 (4) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 143(3) read with direction u/s. 144(C) by the Dispute Resolution Panel-I, Mumbai ('DRP' for short) dated 28.10.2010 for the assessment year (A.Y.) 2006-07. 2. The appeal raises two issues, per its two grounds, Gd. # 1 & 2, which we shall take up in seriatim. Vide its first ground, the assessee contests the disallowance in the sum of Rs.21,44,720/- claimed u/s.36(1)(iii) on account of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s return and the claims preferred thereby being only on the assessee (refer: CIT v. Calcutta Agency Ltd. [1951] 19 ITR 191 (SC). So however, the assessee having claimed before the Assessing Officer (A.O.) of having sufficient free reserves, which stood deployed for the purpose, we, in the interest of justice, only consider it fit and proper that the matter is restored back to allow the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer Pricing Officer (TPO) found the assessee's operating margin, at 5.74%, as below the arithmetic mean of 6.97% in respect of the comparable companies, taking us to pg.6 of the TPO's order u/s. 92CA(3) (supra). The Revenue has erred in, firstly, applying the difference on the entity level, rather than on the international transactions only. Two, no adjustment in fact is called for in v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the safe harbor rule of 5% is with reference to the arm's length price; the same however translates to an equivalent difference in the operating margin, as the costs toward the same are not disturbed. In fact, if a part of the interest cost, as contended by the Revenue, is to be excluded from the operating cost, being a part of the capital cost, the assessee's profit margin would rather ..... X X X X Extracts X X X X X X X X Extracts X X X X
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