Compilations of case law: General Topics: STATEMENTS RECORDED – USE IN ASSESSMENT & RETRACTION

STATEMENTS RECORDED – USE IN ASSESSMENT & RETRACTION

Authorised Officer can record statement on oath on all matters pertaining to suppressed income – Explanation to Sec. 132 inserted w.e.f. 1.4.89 is clarificatory- Assessment on the basis of the voluntary statement was valid
V. Kunhambu & Sons Vs CIT (Ker) 219 ITR 235
Iswardin Mewalal Vs CIT (MP) 169 ITR 584
Greenview Restaurant Vs CIT (Gau) 263 ITR 169

Presumption u/s 132(4) is applicable to the assessment proceedings also
P.R. Metrani Vs CIT (SC) 287 ITR 209

Addition made on the basis of admission by assessee – justified.
Hira Singh and Co Vs CIT (HP) 230 ITR 791

Where the petitioner entered into a voluntary settlement with the Government and his liability to pay tax arose from such settlement, he cannot question the settlement – unless and until he can establish that his consent was improperly procured.
Dewan Bahadur Seth Gopal Das Mohta Vs The Union of India & Ors.(SC) 26 ITR 722

An admission is the best evidence that an opposing party can rely upon and though not conclusive, is decisive of the matter, unless successfully withdrawn or proved erroneous.
Narayan Bhagwantrao Gosavi Batajiwale Vs Gopal AIT 1960 SC 100
Pranav Construction Co. Vs ACIT (ITAT, Mum) 61 TTJ 145

Preliminary statement recorded before start of actual search in which questions put to assessee were general in nature and not related to any specific asset / document – Not a valid legal statement – cannot be relied upon. Second statement during search – valid – could not be ignored
Rishab Kumar Jain Vs ACIT (ITAT, Del) 63 TTJ 236

Customs Officials are not Police Officers. The confession through retracted, is an admission and binds the petitioner.
Surjeet Singh Chhabra v. Union of India AIR 1997 SC 2560

In statement u/s 132(4), assessee never indicated about receipt of agricultural income outside the books – Later on assessee cannot change stand.
Jaikisan R. Agarwal Vs ACIT (ITAT, Pune) 66 TTJ 704

In a case where party relied on self-serving recitals in documents it was for the party to establish the truth of these recitals. - The taxing authorities were entitled to look into the surrounding circumstances and find out the reality of such recitals.
CIT Vs Durga Prasad More (SC) 82 ITR 540

For retraction to be valid, threat or coercion has to be proved .
Manharlal Kasturchand Chokshi Vs ACIT (ITAT, Ahd) 61 ITD 55
Param Anand Builders Vs ITO (ITAT, Mum) 59 ITD 29
Works of Art (P) Ltd, Vs ACIT (ITAT, Jp) 65 ITD 40
Amritlal Bhagwandas Soni Vs DCIT (ITAT, Ahd) 59 TTJ 418
Hiralal Maganlal & Co. Vs DCIT (ITAT, Mum) 96 ITD 113

Addition on the basis of stock statement given to Bank – valid.
Coimbatore Spinning & Weaving Co. Ltd. Vs CIT (Mad) 95 ITR 375
CIT Vs Ashok Textiles (P) Ltd. (Ker) 141 ITR 785
Great Indian Textiles Vs DCIT (ITAT, Cochin) 58 TTJ 123
God Granites Vs ITO (ITAT, Bang) 65 ITD302
Tip Top Plastic Industries P. Ltd. Vs ITO (Mad) 214 ITR 778
Kaila Sweet Supplier Vs CIT (All) 100 Taxman 59
S. Murugappa Chettiar Vs CIT (Ker) 174 ITR 245
Ramanlal Kacharulal Tejmal Vs CIT (Bom) 146 ITR 368

Valuation done by qualified engineers for LIC and loan advanced by LIC on that basis – AO can rely on such valuation report.
G. Anirudhan Vs ACIT (ITAT,Cochin) 60 TTJ 49

When statement was made voluntary and was not alleged to have been obtained under threat or coercion, onus was on assessee to prove that said declaration was made under any misconception of facts – Since assessee had not taken any steps to rectify its declaration before authorities before whom such declaration was made, there was no valid reason for retraction of same after a gap of about two and a half months
Carpenters Classics (Exim) (P) Ltd. Vs DCIT ( ITAT, Bang ) 108 ITD 142

Direct Tax Laws Oct 11 09

Immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance; transactions of the nature of 'GPA sales' or 'SA/GPA/WILL transfers' do not convey title and do not amount to transfer, nor can they be recognized as valid mode of transfer of immovable property - [2011] 14 taxmann 103 (SC)

Mere difficulty in successfully enforcing mortgage does not make debt bad - [2011] 14 taxmann 102 (MAD.)

For assessment year 2006-07 assessing, an individual, was under no obligation to deduct TDS on expenditure of advertisement - [2011] 14 taxmann 101 (KOL. - ITAT)

Where Tribunal's holding that award from TV game show that was earned prior to 1-4-2002, was not exigible to tax under section 115BB, had attained finality, same could not be assessed by Assessing Officer while giving effect to appellate order of Tribunal - [2011] 14 taxmann 100 (ORISSA)

Direct Tax Laws Oct 2011 06

Direct Tax  Laws

Where all relevant details had been made available by assessee before Assessing Officer who after detailed consideration of all details, made original assessment, reopening of assessment was unjustified - [2011] 14 taxmann.com 48 (Gujarat)

Rule 3(5) nowhere provides that while determining value of perquisite, wherever it exceeds Rs. 1,000 per month, amount of Rs. 1,000 per month has to be reduced from value of such perquisite - [2011] 14 taxmann.com 45 (Punjab and Haryana)

Where assessee was only a housewife and was not having any source of income, addition could not be made in assessee's hands on basis of her admission during survey in absence of any corroborative evidence - [2011] 14 taxmann.com 50 (Jaipur - Trib.)

A reference under section 142A is to be made for purpose of determination of fair market value of investment covered under section 69, 69A and 69B and not for purpose of computation of capital gains under section 48 - [2011] 14 taxmann.com 44 (Delhi - Trib.)

Any advance received and forfeited by assessee upon cancellation of sale of capital asset has to be reduced from cost of acquisition by applying section 51 - [2011] 14 taxmann.com 43 (Mumbai - Trib.)

Portfolio management fee is not allowable as deduction while computing short-term capital gain arising from sale of shares - [2011] 14 taxmann.com 42 (Mumbai - Trib.)

Profit or gain would arise only when transfer has been made at a price which is more than cost price and difference between cost price and amount at which transfer has taken place can be charged under section 45(3) - [2011] 14 taxmann.com 41 (Mumbai - Trib.)

Income from sale of bonsai plant grown by assessee in nursery/farm is agricultural income - [2011] 14 taxmann.com 40 (Cuttack - Trib.)

Order passed by DRP should be a speaking order - [2011] 14 taxmann.com 39 (Delhi - Trib.)

Where audited books of account along with vouchers were produced, assessee's claim of expenditure could not be disallowed

IT : Where audited books of account along with vouchers were produced, assessee's claim of expenditure could not be disallowed

[2011] 14 taxmann 87 (Punjab and Haryana)

HIGH COURT OF PUNJAB AND HARYANA

Commissioner of Income-tax, Faridabad

v.

S.S.P. (P.) Ltd.*

ADARSH KUMAR GOEL, ACTG. CJ.

AND AJAY KUMAR MITTAL, J.

IT APPEAL NO. 535 OF 2010

JULY 20, 2011

Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of - Assessment year 2005-06 - Assessee-company claimed business expenditure incurred on site expenses, telephone expenses and maintenance expenses - Assessing Officer disallowed same on ground that these were not in wholly or exclusively for purpose of business - On appeal, Commissioner and Tribunal deleted disallowance - Whether since audited books of account along with vouchers were produced by assessee and Assessing Officer had failed to show that said expenditure was not for business purpose, Tribunal was justified in deleting disallowance - Held, yes [In favour of assessee]

FACTS

The assessee-company was engaged in manufacturing and trading of capital goods. It claimed business expenditure incurred on site expenses, telephone expenses and maintenance expenses. Assessing Officer disallowed the same on ground that same were not incurred wholly or exclusively for purpose of business. On appeal, the Commissioner (Appeals) and the Tribunal deleted the disallowance.

On appeal :

HELD

It was noted that the disallowance was made on ad hoc basis without there being any material to justify such disallowance. No specific instances of expenditure had been pointed out which may disentitle the assessee's claim for site expenses. The findings on appeal were affirmed by the Tribunal. No error of law or perversity could be shown by the revenue in the aforesaid finding which may warrant interference. [Para 9]

As regards to disallowance telephone and main expenses, the Commissioner (Appeals) had concluded that the audited books of account along with vouchers were produced by the assessee and thereafter the Assessing Officer had failed to show that the said expenditure was not for business purposes. Further, the disallowance was made on ad hoc basis without there being any material which would justify that the amount had been spent for personal use of the directors. The aforesaid findings were confirmed by the Tribunal. [Para 11]

The findings of the Commissioner (Appeals) and the Tribunal have not been shown to be perverse or illegal in any manner. [Para 12]

The appeal is to be dismissed.

Compilations of case law: General Topics: SERVICE OF NOTICE

SERVICE OF NOTICE

Notice in the name of Company received by Director – Attended further proceedings – Later on cannot challenge validity of service of notice.
Southern Plantations Ltd.Vs Commissioner of Agrl. IT (Ker) 236 ITR 509

Chartered Accountant representing assessee received notice and assessee ratified receipt of notice – Estoppel from challenging service of notice on Chartered Accountant.
Y. Rajendra, DCIT Vs Khoday Eshwarsa & Sons & Ors. (Kar) 272 ITR 448

Notice served on assessee's husband – Assessee participating in proceeding – valid service
CIT Vs Kanti Devi Gupta (MP) 274 ITR 526
CIT Vs Uttam Chand Nahar (Raj) 295 ITR 403

Notice served on the father of the assessee who was also the Managing Partner of the firm in which assessee is a partner – Service valid
Latha Chandy Vs CIT (Ker) 260 ITR 385

Notice by affixture – No objection to mode of service of notice – Assessee participating in proceedings before Assessing Officer and CIT(A) – Irregularity in notice waived by assessee - assessment valid.
CIT Vs Premium Capital Market & Investment Ltd (MP) 275 ITR 260

Notices dispatched by Registered Post – Either not received back or received back with endorsement "refused" – Deemed service
Ramesh Khosla Vs ITO & Anr. (P&H) 155 ITR 556

Notice send by speed post – Quite reasonable to infer that it was served within 3-4 days
Capital Gem Overseas (P) Ltd. Vs ITO ( ITAT, Del ) 101 ITD 117

Service of notice on agent – Different persons have acted in the past in absence of power agent to receive notices – Service on one such person – Notices were complied with – Assessee raised no objection before ITO – such service constitute valid service.
A.K. M. Govindaswamy Chettiar & Ors.Vs ITO (Mad) 244 ITR 559
X vs. ITO (ITAT, Bang) 9 ITD 715
CIT Vs Regency Express Builders P. Ltd. (Del) 291 ITR 55

Receipt of notice by employee who endorsed his acknowledgement under the seal of firm – Valid service
M.X. De Nornha & Sons Vs CIT (All) 18 ITR 928

Though the notice sent to assessee firm was served on a person who was not a partner of assessee firm, it is valid as the assessee failed to establish that such person was a stranger and was not concerned with day-to-day business of the firm.
Salar Publications Trust Vs ITO & Anr. (Kar) 235 ITR 13

Assessee for the first time filed affidavit before ITAT in which it denied receipt of notice under section 143(2) – ITAT erred in placing reliance on such belated affidavit – Presumption of service of notice not successfully rebutted by assessee.
CIT Vs Vins Overseas India Ltd (Del) 165 Taxman 95
Burden on assessee to prove that there was no service of notice under section 143(2) within time
CIT Vs Shanker Lal Ved Prakash (Del) 300 ITR 243

"Forwarding" of draft assessment order – date on which it was given to process-server or delivered at post office or handed over to representative of assessee.
CIT Vs Shahzadi Begum (AP) 225 ITR 963.

Direct Tax Laws Oct 2011 09

DRP's order, if not speaking, is to be adjudicated afresh - [2011] 14 taxmann 97 (DELHI - ITAT)

HSBC and ICICI banks are not State Financial Corporation or State Industrial Investment Corporation for purposes of section 43B(d) - [2011] 14 taxmann 83 (MUM. - ITAT)

Increase in gross profit rate on account of inflated expenses and suppressed gross profits, unless controverted, should be accepted - [2011] 14 taxmann 88 (PUNJ. & HAR.)

Provision for warranty is an allowable business expenditure - [2011] 14 taxmann 84 (KAR.)

Requirement of recording of satisfaction under section 153C cannot be substituted by furnishing an appraisal note which is prepared by search party after completion of search - [2011] 14 taxmann 93 (INDORE - ITAT)

Transfer pricing : To be comparables, nature and line of business, product or service, market, size and scope of operation and stage of business, etc., should be similar - [2011] 14 taxmann 96 (DELHI - ITAT)

Where assessee accepted addition of undisclosed credit as he could not secure presence of creditor though confirmation letters had been filed, levy of penalty under section 271(1)(c) was not justified - [2011] 14 taxmann 85 (KAR.)

Where audited books of account along with vouchers were produced, assessee's claim of expenditure could not be disallowed - [2011] 14 taxmann 87 (PUNJ. & HAR.)

Where expenditure on religious activities is more than 5 per cent of total Income, trust cannot be issued certificate of exemption under section 80G - [2011] 14 taxmann 92 (VISAKHAPATNAM - ITAT)

Where full value of consideration is equal to valuation done by stamp valuation authorities, reference to DVO for determining fair market value is not valid - [2011] 14 taxmann 95 (ALL. - ITAT)

Where scrap sold by assessee was derived from dismantling of constructed buildings, it was not required to collect tax at source from buyer - [2011] 14 taxmann 94 (RAJKOT - ITAT)

Where there was dispute in respect of concession granted by revenue qua computation of profit rate from civil construction business, matter was to be remanded - [2011] 14 taxmann 86 (PUNJ. & HAR.)

Expenditure before actual receipts.

ITO Vs. Omni Globe information Technologies India (P) Ltd. [ITA No.3465/D/09, dtd. 29.04.2010]

Expenditure incurred by the assessee- company, incorporated for carrying out the business of the BPO, prior to the setting up of business, cannot be taken into account for computing the business income

Business is set up when it reaches a stage where it is in a position to procure business and not before. However, the expenditure becomes deductible from such stage, irrespective of the date of actual receipt of the business.

Compilations of case law: General Topics: STAY ORDERS

STAY ORDERS

To grant interim relief straightaway will jeopardize public interest.
Union of India & Ors. Vs Oswal Woollen Mills Ltd. (SC) 154 ITR 135
Assistant Collector of Central Excise Vs Dunlop India Limited & Others (SC)154 ITR 172

Only when strong prima facie case is made out, in deserving and appropriate cases, Tribunal should grant stay.
ITO Vs M.K. Mohammed Kunhi (SC) 71 ITR 815
Khivraj Motors Ltd. Vs DCIT & Ors. ( Mad ) 205 ITR 462
Sri Balaji Trading Co. Vs DCIT & Anr. (Mad) 175 ITR 428

Non-compliance of Tribunal's direction was a clear act of contempt of court – extension of stay sought after stay granted expired – Application needs to be rejected.
Endeavour Investments Ltd. Vs DCIT (ITAT, Mad – TM) 70 ITD 17
Roxy Eng. P. Ltd. Vs ACIT ( ITAT, Chd ) 68 TTJ 482

No early hearing when demand is not huge – Bench has to order early hearing.
Olympia Paper & Stationery Stores Vs ACIT (ITAT, Mad) 63 ITD 148

Stay Petition moved by Public Sector undertakings – COD permission necessary.
Transmission Corpn. Of A.P. Ltd. Vs ACIT (ITAT, Hyd) 97 ITD 171

Demand for several assessment years – separate stay petition necessary.
Wipro Ltd.Vs ITO (ITAT, Bang) 86 ITD 407.

Direct Tax Laws Oct 2011 08

On expiry of tax holiday period under section 10B, block of assets, viz., plant and machineries of industry are available for working out relief under section 50(2) - [2011] 14 taxmann.com 82 (Madras)

Transfer pricing - Rule 10B nowhere provides that comparable uncontrolled transaction shall be only an international transaction - [2011] 14 taxmann.com 91 (New Delhi - Trib.)

Losses on sale and purchase of shares would not be treated as speculation losses of assessee engaged in bills rediscounting activities - [2011] 14 taxmann.com 81 (Mumbai - Trib.)

Where assessee which was an association related to trade had incurred revenue expenses solely for purpose of protection of common interest of its members it would be allowable as deduction under section 44A - [2011] 14 taxmann.com 80 (Delhi - Trib.)

A partner of a firm is an individual only even if he is partner as a representative of HUF and, thus, where salary is paid to such a partner for conducting affairs of business of firm, it has to be allowed as deduction in view of Explanation 4 to section 40(b) - [2011] 14 taxmann.com 79 (Ahmedabad - Trib.)

Assessee not entitled to deduction under section 80-IB(10) where it sold plots to respective customers by registering a sale deed and thereafter it constructed building at an agreed price - [2011] 14 taxmann.com 78 (Indore - Trib.)

Where assessee, a non-resident company, carried out work of offshore transportation and installation of pipelines in territorial waters of India through its vassels, it could be said to have a fixed place of business in India in terms of paragraph (1) of article 5 of Indo-Mauritius DTAA - [2011] 14 taxmann.com 77 (Delhi - Trib.)

If stock-in-trade is converted into investment and sold later on, difference between sale price of shares and their indexed cost of acquisition should be computed as capital gain - [2011] 14 taxmann.com 76 (Chennai - Trib.)

ITR (TRIB) Volume 11 : Part 8 Issue dated : 17-10-2011

ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))

Volume 11 : Part 8 (Issue dated : 17-10-2011)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Business expenditure --Accrued or contingent liability--Legal and accounting, professional fees and consultancy fees--Sums not shown to have accrued in year in question--Not allowable--Income-tax Act, 1961, s. 40(a)(ia)-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

Deduction of tax at source --Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment--Income-tax Act, 1961, ss. 9(1)(vii), Expln. 2, 195(2)--Double Taxation Avoidance Agreement between India and Italy, arts. 5(2)(j), 13-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

Depreciation --Rate of depreciation--Uninterrupted power supply system and printers--Are computer peripherals eligible for depreciation at 60 per cent.--Income-tax Act, 1961, s. 32-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

International transactions --Transfer pricing--Arm’s length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--“Net profit margin realised”, means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available--Income-tax Act, 1961, ss. 92C(iii), 144C--Income-tax Rules, 1962, rr. 10B(1)(e)(i), (4), 10D(1)(k)-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and Italy :

Art. 5(2)(j) --Deduction of tax at source--Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

Art. 13 --Deduction of tax at source--Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

Income-tax Act, 1961 :

S. 9(1)(vii), Expln. 2 --Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

S. 32 --Depreciation--Rate of depreciation--Uninterrupted power supply system and printers--Are computer peripherals eligible for depreciation at 60 per cent.-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

S. 40(a)(ia) --Business expenditure--Accrued or contingent liability--Legal and accounting, professional fees and consultancy fees--Sums not shown to have accrued in year in question--Not allowable-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

S. 92C(iii) --Transfer pricing--Arm’s length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--“Net profit margin realised”, means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

S. 144C --Transfer pricing--Arm’s length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--“Net profit margin realised”, means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available-- Haworth (India) P. Ltd. v. Deputy CIT (Delhi) . . . 757

S. 195(2) --Deduction of tax at source--Non-resident--Payment to foreign company for provision of personnel to supervise and advise on erection of machinery in India--Amount not chargeable to tax in hands of foreign company under Double Taxation Avoidance Agreement--Assessee not liable to deduct tax at source before making payment-- Aditya Birla Nuvo Ltd. v. Assistant Director of Income-tax (International Taxation) (Mumbai) . . . 812

Income-tax Rules, 1962 :

R. 10B(1)(e)(i) --International transactions--Transfer pricing--Arm’s

length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--“Net profit margin realised”, means actual profits --Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available---- Haworth (India) P. Ltd. v . Deputy CIT (Delhi) . . . 757

R. 10B(4) --International transactions--Transfer pricing--Arm’s length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--“Net profit margin realised”, means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available-- Haworth (India) P. Ltd. v . Deputy CIT (Delhi) . . . 757

R. 10D(1)(k) --International transactions--Transfer pricing--Arm’s length price--Comparison of uncontrolled transaction--Data relating to current year to be used--Single comparable instance sufficient--“Net profit margin realised”, means actual profits--Assumptions not permissible--Pre-operational expenses, how far to be considered--Expenses must have nexus with operation--Functional comparability--Company having substantial other segments not a comparable--Assumption with regard to capacity utilisation in case of comparable must be supported by evidence--Only one price determined by most appropriate method--Benefit of 5 per cent. adjustment not available-- Haworth (India) P. Ltd. v . Deputy CIT (Delhi) . . . 757