Case Law Details
Nordex India Pvt Ltd Vs DCIP (ITAT Bangalore)
ITAT Bangalore held that if two out of the three preceding assessment year the comparable has earned profits it cannot be held a persistent loss making company. Hence, persistent loss filter can be applied only if there is loss in three successive assessment years.
Facts- Assessee is a company being wholly owned subsidiary of Acciona Windpower International S.L., Spain. The assessee aggregated the purchases of raw materials and purchase of fixed assets under manufacturing segment.
The only segment disputed by the TPO was in the manufacturing segment. It was noted by the TPO that assessee computed its margin under the manufacturing segment to be 5.83%. Assessee selected six comparable with a median of 5.47% thereby treating its transaction to be at arm’s length under the manufacturing segment. Disagreeing with the transfer pricing study, the TPO applied certain filters and shortlisted the comparables with a mean of 11.62%. Accordingly, TPO proposed an adjustment of Rs. 30,14,11,018/- to be the shortfall.
DRP upheld the observations of the TPO and rejected the objections raised by the assessee. Being aggrieved, the present appeal is filed.
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