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2013 (1) TMI 212 - ITAT MUMBAIAddition on account of TP adjustments - reimbursement/allocation of COE3 [Common Operating Environment System] related expenses - Held that:- As fresh details were furnished by the assessee for the first time before the CIT(Appeals) giving complete details of the said expenses as well as the basis of allocation thereof. The said details were forwarded by the CIT(Appeals) to the AO/TPO and on verification of the same, the TPO accepted in his remand report that allocation/reimbursement of COE3 expenses to the extent of Rs. 2,20,83,188/- was in order. Keeping in view this finding recorded by the TPO in the remand report, the addition made on this issue to the extent of Rs. 2,20,83,188/- has been deleted by the CIT(Appeals) and has quite rightly so - revenue appeal dismissed. No justification in the action of the TPO in taking the ALP of the relevant transactions at Nil & ignoring all these details - assessee appeal - Held that:- It is incumbent upon the TPO to work out the ALP of the relevant transactions by following some authorized method and the entire cost borne by the assessee cannot be disallowed by taking the ALP at Nil keeping in view the facts and circumstances of the case and the relevant details furnished by the assessee. The exercise of ascertaining ALPs has to be done by the TPO keeping in view the well laid down scheme in the relevant provisions of the Act and addition, if any, on account of TP adjustment, has to be made only after doing such exercise. Therefore, restore this issue to the file of the AO/TPO with a direction to do such exercise and make addition - in favour of assessee for statistical purposes. Disallowance of depreciation of unit located at Silvassa - Held that:- Assessee's appeal is squarely covered against the assessee and in favour of the Revenue as decided in the case of Plastiblends Ltd. v. Addl. CIT [2009 (10) TMI 39 - BOMBAY HIGH COURT] wherein held that for the purposes of deduction under Chapter VIA, the gross total income has to be computed inter alia by deducting the deductions allowable under section 30 to 43D of the Act, including depreciation allowable under section 32. Deduction u/s 80-IB - disallowance of Other Income directly linked to Silvassa Unit,Interest received, Miscellaneous Income,Reversal of excess provision of Doubtful debts - Held that:- This issue is covered against the assessee relying on decision of Liberty India v. CIT [2009 (8) TMI 63 - SUPREME COURT] wherein held that the provisions of section 80-IB are code by themselves as they contain both substantive as well as procedural provisions. The word 'derived from' is narrower in connotation as compared to the words 'attributable to'. The assessee has claimed deduction u/s 80IB in respect of receipts which are incidental to the business and so beyond the first degree. Thus uphold the order of the CIT(Appeals) on confirming the disallowance - against assessee. Deduction u/s 80-IB in respect of insurance claim - Held that:- As decided in J.K. Aluminium Co. v. ITO [2011 (4) TMI 90 - ITAT NEW DELHI] refund of excise duty being refund of assessee's own money cannot be regarded as separate income at all and the AO, therefore, was not justified in denying the relief u/s 80-IB on that amount. Insurance claim received by the assessee inasmuch as the same being reimbursement/recovery of expenses actually incurred by the assessee, it has no effect on the final income of the assessee so as to warrant exclusion thereof while computing deduction u/s 80-IB - in favour of assessee.
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