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TMI Blog2017 (4) TMI 1552X X X X Extracts X X X X X X X X Extracts X X X X ..... MI 401 - ITAT BANGALORE] we remit the issue to the file of AO for the purpose of excluding recovery of advance written off from operating profit and to compare ALP. Hence, this ground raised by the assessee is allowed. Disallowing an adjustment in respect of the extraordinary foreign exchange loss suffered by the appellant as against the comparable companies - HELD THAT:- As per MOTONIC INDIA AUTOMOTIVE PVT. LTD. VERSUS THE ASSISTANT COMMISSIONER OF INCOME-TAX, COMPANY CIRCLE-IV (3) , CHENNAI [ 2016 (8) TMI 1423 - ITAT CHENNAI] this issue is remitted to the file of AO for considering the same afresh in the light of above Order of Tribunal. Applying the comparability criterion inconsistently for different companies and erred in considering c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the law pertaining to TP and by adopting faulty processes/methodologies to finalize the adjustment, such as but not limited to, applying filters, functional analysis, selection of comparable companies, computation of profit margins of appellant and comparable companies and undertaking economic adjustments. 3. The Ld. AO, Ld. DRP and Ld. TPO have erred in not granting the adjustment for differences in working capital levels between the assessee and the comparable companies. A. The Ld. DRP has incorrectly reasoned that the computation of the working capital adjustment submitted by the appellant during the proceedings before the IA. DRP was an additional evidence and that the appellant had not explained as to why it was not submitted befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the DRP, the assessee sought for working capital adjustment, which was rejected by the DRP on the reason that calculation of working capital adjustments between the assessee and the comparable companies is not provided to TPO. Against this, the assessee is in appeal before us. 5. We have heard both the parties and perused the material on record. In our opinion, there is a positive working capital as seen from the balance sheet submitted by the assessee. Accordingly, we remit the issue to the file of AO to grant suitable working capital adjustments after making proper TP study. Hence, this ground is allowed for statistical purposes. 6. Ground No.4 is with regard to not considering the recovery of advances written off as an operating item ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the operating profit. The ld. counsel for the assessee ITA No.1129/Bang/2011 therefore submitted that its net margin should be taken as 9% and not 6.88% as computed by the TPO. Similarly, the additions made by the TPO to the operating cost while computing the arm's length price and to the operating revenue when computing the adjustment is erroneous. Therefore in computing the arm's length price as well as any adjustment, the assessee's operating revenue would still be ₹ 234,26,60,885/- and operating cost would be ₹ 214,92,30,171/-. 10. To the above submissions, the ld. DR could not make any counter submissions. 11. We are of the view that the submissions made by the ld. counsel for the assessee have to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2007-08 and DHL Express (India) Pvt. Ltd. V. ACIT in ITA No.7360/Mum/2010 for the assessment year 2006-07. Accordingly, we direct the TPO to provide considerable exchange fluctuation adjustment while determining the ALP. Accordingly, this issue is remitted to the file of the TPO for determining the ALP after considering the above three components i.e. customs duty adjustment, air freight adjustment and foreign exchange fluctuation adjustment." In view of the above order of the Tribunal, this issue is remitted to the file of AO for considering the same afresh in the light of above Order of Tribunal. 10. The next ground No.6 is with regard to applying the comparability criterion inconsistently for different companies and erred in cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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