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2017 (8) TMI 1565 - ITAT PUNETP adjustment - Addition as operating income on liability written back and doubtful debts written back - HELD THAT:- Similar issue stands decided by the Tribunal of Delhi Bench in the case of Sony India Pvt. Ltd. [2008 (9) TMI 420 - ITAT DELHI-H] and in favour of the assessee. Thus, it is a settled issue that such liability written back amount as discussed in the said paras falls in the ambit of the provisions of section 28 to 43 of the I.T. Act and therefore in the scope of business profits of the assessee. Same is the reasoning so far as the write back of the Doubtful Debts are concerned. This write back logic has parity with that of the write back of the liabilities. Authorised Representative also raised an argument stating that favourable adjustment of the expenditure claimed way of provision of Doubtful Debts debited to profit and loss account, if given benefit to the assessee, while calculation of operating cost, the resultant ratio of OP/OC of the assessee is within the range of +/-5%. Thus, for all the reasons discussed above, the order of the CIT(A) is fair and reasonable on these 3 items and, therefore, the relevant limbs of the ground raised by the Revenue are dismissed. Miscellaneous Income - designs income and other services income is directly linked to the core activities of the assessee. Therefore, we support the view of the CIT(A) on these items. Ld. DR could not file any evidence to hold it otherwise. Therefore, on hearing both the sides, we find the conclusion given by the CIT(A) on this issue of inclusion of Miscellaneous income as part of the operating profit is fair and reasonable and it does not call for any interference. Thus, the ground No.3 raised by the Revenue has to be dismissed in view of the above discussion and findings of the CIT(A). Computation mechanism for Arm’s Length Price given in 2nd Proviso to section 92C(2) read with Rule 10B(1)(E) - HELD THAT:- AO/TPO have erred in making addition on this account while the difference in Operating profit/Operating cost figures are within the range of +/-5% of the OP/OC of the assessee. The statute allows the same. Therefore, we are of the considered view that the order of CIT(A) is fair and reasonable and it does not call for any difference. Accordingly, Ground No.1 raised by the Revenue is dismissed. Allowing of warranty provisions - HELD THAT:- The claim of the assessee on account of warranty provision is allowed by the Tribunal in assessee’s own case in the A.Y. 2003-04. Ld. Departmental Representative has not brought anything on record to controvert the above finding of the Tribunal. Therefore, we find that the order of CIT(A) is in tune with the decision of the Tribunal. Therefore, the decision of the CIT(A) given is fair and reasonable and it does not call for any interference. Accordingly, Ground No.2 raised by the Revenue is dismissed.
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