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2021 (10) TMI 1322 - ITAT BANGALORETransfer pricing adjustment - assessee had opted for MAP proceedings pursuant to Article 27 of Indo-UK DTAA with respect to transfer pricing adjustment from revenue earned by the assessee from its AEs located in UK - HELD THAT:- Following the above order of the Tribunal in the case of J.P.Morgan Services Pvt. Ltd. [2015 (12) TMI 296 - ITAT MUMBAI] we hold the margin adopted for UK transaction, which constitutes almost 83% of the total revenue shall be adopted in other jurisdictional transactions as well. We noticed that the assessee had shown operating / net margin of 15.21% for ITE segments and 15.38% in SWD segments. Therefore, in the facts of the given case, we hold that no transfer pricing adjustment is required. Disallowance of reimbursement received - assessee had received certain amounts as reimbursement from its AEs towards expat salaries - A.O. decided the issue against the assessee by holding that the assessee has not placed any material on record to show its reimbursement of expenditure towards expat salary - HELD THAT:- AO mentioned that as per provisions of section 144C(13), no further opportunity can be allowed to the assessee. The assessee has very elaborately detailed the nature of reimbursement expenses - The assessee has also furnished the details such as the reimbursement ledger along with sample invoices - The explanation of nature of reimbursements, ledger copies of reimbursement of expenses, sample invoices are also part of assessment records. Therefore, the Assessing Officer’s statement that the details are not available on record, is not correct. Therefore, we restore the issue to the files of the A.O. The A.O. is directed to examine the details which are placed on record such as the reimbursement ledger, sample invoices etc. The A.O. shall also consider the submissions made before the Assessing Officer with regard to reimbursement / recovery of expenses. Disallowance of vehicle rental expenses - A.O. had disallowed vehicle lease rentals on the ground that payments were made towards purchase of vehicles - HELD THAT:- As decided in own case [2017 (1) TMI 1673 - ITAT BANGALORE] we allow the claim of the assessee regarding lease rentals as an allowable revenue expenditure. Deduction u/s 10A - Liabilities no longer required written back - HELD THAT:- If the provisions for liabilities made in the last financial year is relatable to the business of the assessee and the same is written back during the year 2008-2009, it will increase the business income of the assessee. It was further directed by the DRP that such increase in income would be entitled for deduction u/s 10A I.T.Act. The A.O., however, rejected the claim of the assessee by holding that the assessee has not placed any evidence on record. It was stated by the A.O. that as per the provisions of section 144C(13) of the I.T.Act, no further opportunity can be allowed to the assessee. Therefore, it is not correct on the part of the A.O. to state that no details are produced. Therefore, we direct the A.O. to examine this issue afresh and also follow the dictum laid down by the judgments of the Hon’ble jurisdictional High Court referred supra. It is ordered accordingly. Hence, ground No.3 is allowed for statistical purposes. Short grant of TDS - HELD THAT:- DRP in its order had directed the Assessing Officer to verify and give credit for the entire amount of TDS after due verification. On perusal of the final assessment order, it is seen that the A.O. has not examined this issue. Therefore, we restore the issue to the files of the A.O. The A.O. is directed to examine and give due credit of TDS. Directions to exclude certain expenditure, both from the export turnover as well as from the total turnover, while computing deduction u/s 10A - HELD THAT:- The above issue is no longer res integra as it is settled by the judgment of the Hon’ble Apex Court in the case of CIT v. HCL Technologies Ltd. [2018 (5) TMI 357 - SUPREME COURT] wherein it was categorically held that when certain expenditure is excluded from the export turnover while calculating deduction u/s 10A of the I.T.Act, the same needs to be excluded also from the total turnover.
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