Cost of Goods Cannot be Included in Denominator of Profit Level Indicator when comparable are Business Auxiliary Service providers

ADM Agro Industries Kota & Akola P Ltd Vs ACIT (ITAT Delhi)

Conclusion:  In present facts of the case, the Hon’ble ITAT observed that since, the assessee is found to be functionally comparable to the business auxiliary service providers, therefore it is established that the assessee has undertaken limited functions and risk in the merchanting trades segment and earns a fixed profit margin. Therefore, the cost of goods cannot be included in the denominator of the PLI (Profit Level Indicator).

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