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2014 (6) TMI 363 - ITAT DELHIDetermination of Arm’s Length Price - Royalty payment to AEs – Held that:- Following ACIT Cir. 5(1), New Delhi Versus M/s. Kehin Panalfa Ltd. [2014 (6) TMI 317 - ITAT DELHI] - the royalty was being paid from 1997 and was continuously examined by the AO, then in the absence of any new facts to hold that there was no need to pay the royalty was uncalled for - Decided in favour of Assessee. Disallowance of contribution to Group Gratuity Fund – Held that:- Following Commissioner of Income Tax vs. Textool Co. Ltd. [2009 (9) TMI 66 - SUPREME COURT] - from a bare reading of section 36(1)(v), it is manifest that the real intention behind the provision is that the employer should not have any control over the funds of the irrevocable trust created exclusively for the benefit of the employees - the assessee had absolutely no control over the fund created by the LIC for the benefit of the employees of the assessee and further all the contribution made by the assessee in the said fund ultimately came back to the assessee’s employees gratuity fund, approved by the Commissioner - the conditions stipulated in section 36(1)(v) stood satisfied - assessee had made the payment to the LIC and the payments were made before the filing of the Income Tax Return – thus, the claim of the assessee is allowable – Decided in favour of Assessee. Accordingly, we set aside the order of the AO and decide the issue in favor of the assessee. Difference in the balance of one of the parties – Held that:- The AO has not given any opportunity to the assessee to file the reconciliation and the reconciliation filed before the DRP was not examined – thus, the matter is required to be remitted back to the AO for adjudication – Decided in favour of Assessee. Disallowance u/s 43B of the Act - Unutilised Modvat Credit Outstanding at the end of the year – Held that:- Following Eicher Motors Ltd. vs. Union of India [1999 (1) TMI 34 - SUPREME COURT OF INDIA] - the set off of excise duty against Modvat credit available to the assessee is to be treated as payment of excise duty at the time of set off – the amount of excise duty adjusted against the Modvat available before the due date of filing of income tax return has to be treated as payment made u/s. 43B and the same is allowable – thus, the matter is remitted back to the AO for examination of adjustments – Decided in favour of Assessee. Addition u/s 40A(2)(a) of the Act – Held that:- As decided in assessee’s own case for the earlier assessment year, it has been held that there was no excessiveness or unreasonableness regarding this expenditure - AO has not brought any cogent material on record to come to a conclusion that this expenditure is excessive or unreasonable – Decided in favour of Assessee.
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