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2015 (7) TMI 1282 - AT - Income TaxTPA - DRP rejecting the entity level TNMM adopted by the TPO and directed to compute the adjustment at transaction level only Held that:- The undisputed fact is that the TP adjustments have to be made only for the transaction with the Associated Enterprises. A similar view was taken by the Tribunal in the case of Ratilal Becharlal & Sons [2012 (11) TMI 988 - ITAT MUMBAI ] wherein the Tribunal at para-13 of its order has held that “ adjustment arising out of ALP cannot be made on the entire turnover and the same has to be restricted to the International transaction with the AE.” Thus the ALP has to be at International Transaction and not in relation to assessee’s entire sales/turnover. - No error in the directions of the DRP. Appeal filed by the Revenue is accordingly dismissed. Not allowing the benefit of the proviso to Sec. 92C - Held that:- A perusal of the assessment order shows that following the directions of the DRP, the AO has made TP adjustment of ₹ 3,16,022/-. We find force in the contention of the Ld. Counsel that the benefit of proviso i.e. the difference is within the range of +/ - 5% should be allowed to the assessee. We direct the AO to verify this contention of the assessee and decide the issue as per the provisions of the law. Disallowance being loan written off - Held that:- Firstly the assessee lended money to MST knowing fully well that MST is not in a position to carry on the work of the assessee as it does not possess the necessary facilities. Yet the assessee advanced money to MST. The recovery of machinery from MST was nothing but recovery on account of adjustment of loan since the assessee has grossly failed to establish any commercial expediency in giving advance to MST, we do not find any reason to allow the write off as expenditure. We, therefore confirm the findings of the DRP. Brought forward losses - Held that:- This issue has to be relooked as we have confirmed the findings of the DRP in so far as Transfer Pricing adjustments is concerned in Revenue’s appeal. The AO is directed to decide this issue afresh as per provisions of the law.
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