{"id":3119,"date":"2011-05-06T23:52:56","date_gmt":"2011-05-06T18:22:56","guid":{"rendered":"http:\/\/itatonline.org\/archives\/?p=3119"},"modified":"2011-05-06T23:52:56","modified_gmt":"2011-05-06T18:22:56","slug":"sapient-corporation-pvt-ltd-vs-dcit-itat-delhi-transfer-pricing-loss-making-super-profit-companies-are-not-comparable","status":"publish","type":"post","link":"https:\/\/itatonline.org\/archives\/sapient-corporation-pvt-ltd-vs-dcit-itat-delhi-transfer-pricing-loss-making-super-profit-companies-are-not-comparable\/","title":{"rendered":"Sapient Corporation Pvt Ltd vs. DCIT (ITAT Delhi)"},"content":{"rendered":"<table width=\"150\" border=\"0\" align=\"right\">\n<tr>\n<td><a href=\"https:\/\/itatonline.org\/archives\/?dl_id=422\" onclick=\"if (event.button==0) \r\n     setTimeout(function () { window.location = 'http:\/\/itatonline.org\/downloads.php?varname=dl_id=422&varname2=sapient_corp_super_profit_co_TNMM.pdf'; }, 100)\" ><strong>Click here to download the judgement (sapient_corp_super_profit_co_TNMM.pdf) <\/strong> <\/a><\/p><\/td>\n<\/tr>\n<\/table>\n<p><strong><br \/>\nTransfer Pricing: Loss-making &#038; super-profit companies are not comparable<br \/>\n<\/strong><\/p>\n<p>The assessee claimed that its international transactions of software development was at arms length under TNMM on the basis that its average operating profit ratio (OP\/TC) was higher than that of 10 comparable companies. <em>The TPO &#038; DRP rejected a few comparables on the ground that they were loss-making<\/em> and recomputed the OP\/OC of the other comparables at a higher rate. Before the Tribunal, the assessee claimed that <strong>if loss making companies were excluded, a super profit earning company should also be removed from the comparables<\/strong>. HELD upholding the plea:<\/p>\n<blockquote><p><strong>When loss making companies have been taken out from the list of comparables by the TPO, Zenith Infotech Ltd. which showed super profits should also be excluded<\/strong>. The fact that assessee has himself included in the list of comparables, initially cannot act of estoppel particularly in light of the fact that the AO had only chosen the companies which are showing profits and had rejected the other companies which showed loss (<strong>Quark System vs. DCIT<\/strong> 38 SOT 307 (SB) followed).\n<\/p><\/blockquote>\n<div class=\"journal2\">\nSee Also: <strong><a href=\"http:\/\/itatonline.org\/archives\/index.php\/dhl-express-india-pvt-ltd-vs-acit-itat-mumbai-transfer-pricing-low-to-companies-are-not-comparable-only-operational-profits-to-be-considered-for-comparison\/\">DHL Express (India)<\/a><\/strong> (ITAT Mumbai) (<em>Low T\/O companies are not comparable<\/em>) &#038; <strong><a href=\"http:\/\/itatonline.org\/archives\/index.php\/adobe-systems-india-transfer-pricing-super-normal-profit-cos-must-be-excluded-from-comparables-drp-must-not-pass-cursory-laconic-orders\">Adobe Systems India<\/a><\/strong> (ITAT Delhi) (<em>super-normal profit companies to be excluded<\/em>)\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>When loss making companies have been taken out from the list of comparables by the TPO, Zenith Infotech Ltd. which showed super profits should also be excluded<\/strong>. The fact that assessee has himself included in the list of comparables, initially cannot act of estoppel particularly in light of the fact that the AO had only chosen the companies which are showing profits and had rejected the other companies which showed loss (<strong>Quark System vs. DCIT<\/strong> 38 SOT 307 (SB) followed)<\/p>\n<div class=\"read-more\"><a href=\"https:\/\/itatonline.org\/archives\/sapient-corporation-pvt-ltd-vs-dcit-itat-delhi-transfer-pricing-loss-making-super-profit-companies-are-not-comparable\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[4,8],"tags":[],"class_list":["post-3119","post","type-post","status-publish","format-standard","hentry","category-all-judgements","category-tribunal"],"acf":[],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/3119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/comments?post=3119"}],"version-history":[{"count":0,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/posts\/3119\/revisions"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/media?parent=3119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/categories?post=3119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/archives\/wp-json\/wp\/v2\/tags?post=3119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}