Transfer Pricing: Revenue can’t adjust operating costs in allowing capacity adjustment

Brief of the case: In the case of DCIT Vs. Claas India Pvt. Ltd. Delhi Bench of ITAT have denied to approve the method adopted by AO/TPO in allowing capacity adjustments. ITAT further held that once the law enjoins for doing a particular thing in a particular manner alone, it is not open to anyone to adopt a contrary or different approach. ITAT observed that lower authorities have adjusted the operating costs of the assessee in allowing the capacity adjustment. Further ITAT elaborate the method to compute capacity utilization adjustment under TNMM. Facts of the case: Assessee was established ...