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2018 (6) TMI 1565 - ITAT PUNETP adjustment made u/s 92CA(3) - determination of arm's length price of transactions pertaining to payment of fees for advisory and other services by the assessee to its associated enterprises - MAM selection - Held that:- As decided in assessee's own case [2017 (12) TMI 1568 - ITAT PUNE] tribunal held that TNMM method was the most appropriate method to be applied to benchmark international transactions undertaken by the assessee by taking foreign associated enterprises as tested party and further, the Tribunal held that the said transaction of fees paid for advisory and other services was to be benchmarked by comparing the margins of tested party i.e. foreign associated enterprises with margins of external comparables selected by the assessee, who were also engaged in providing similar advisory and related services to its entities. However, for the limited purpose of verification that the margins shown by tested party i.e. foreign associated enterprise was at arm's length price of margins shown by comparables selected by the assessee, the matter was remitted back to the file of Assessing Officer / TPO for verification. The issue arising in the present appeal before us is similar to the issue which arose in earlier year and since the international transactions undertaken by the assessee were identical to the international transactions undertaken in earlier years, hence following the same parity of reasoning, we hold that TNMM method was the most appropriate method to be applied to benchmark arm's length price of international transactions of fees paid for advisory and other services by taking foreign associated enterprise as tested party. AO is directed to benchmark the transactions by taking margins of foreign comparables which were selected by the assessee in earlier year and even in the year under consideration. However, to verify the claim of assessee that the margins shown by assessee and the mean margins shown by the comparables were within +/- 5% range, the Assessing Officer is directed to comply with the directions of Tribunal as in earlier year and compute arm's length price of international transactions. Comparable selection - Held that:- The assessee provides Oracle software support services to Emerson Climate Technologies Incorporation, USA (AE). It is back office support activity in the nature of IT enabled services (ITes). It has earned a mark-up of 10.20% on cost. Thus companies functionally dissimilar with that of assessee need to be deselected from final list. Companies fluctuating margins is to be excluded from final set of comparables. Additional depreciation of 10% claimed u/s 32(1)(iia) on the assets which had been added to the block of Plant & Machinery during financial year 2011-12 relevant to 2012-13 - Held that:- As relying on case of CIT Vs. Rittal India ( P.) Ltd. [2016 (1) TMI 81 - KARNATAKA HIGH COURT] the assessee is entitled to claim balance additional depreciation @10% of the value of asset added to the block of Plant and Machinery during Financial year 2011-12 on account of additional depreciation under section 32(1)(iia) of the Act. - Decided in favour of assessee.
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