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2019 (12) TMI 1626 - AT - Income TaxTP Adjustment - selection of MAM - assessee has benchmarked its transaction by applying TNMM method that has been changed by the TPO and he determined ALP by following CUP method - HELD THAT:- Since there is no disparity on facts, more particularly, when the ld.CIT(A) has not made any detailed analysis except putting reliance upon the order of his predecessor in the Asstt.Year 2007-08 and 2008-09, therefore, we are of the view that the issue is squarely covered in favour of the assessee by the order of the Tribunal passed in the Asstt.Year 2008-09[2019 (5) TMI 174 - ITAT AHMEDABAD] Respectfully following the order of Co-ordinate Bench, we delete the impugned ALP adjustment - Since we have upheld the computation of ALP of international transaction of sale of finished goods according to TNMM method, consequently, ground no.1 and 2 of the Revenue’s appeal would be redundant. ALP adjustment - payment made for availing of sales promotion and marketing services - TPO worked out ALV of this expenditure at NIL. He has assigned three reasons for taking ALP of this transaction as NIL - HELD THAT:- We find that the assessee has produced evidence in the shape of agreement between it and the AE showing that AE would charge commission at the rate of 5% on non-AE export sales for rendering these services. The assessee has not debited other expenditure for marketing and sales with regard sales made to non-AE. It is also pertinent to note that turnover of the assessee has increased with regard to non-AE sales also. Its export sales to non-AE have increased from ₹ 9 crores approx. in F.Y.2005- 06 to ₹ 44.56 crores in the F.Y.2008-09. We are of the view that no adjustment could have been made at the recommendation of the TPO on this issue because it was not in the jurisdiction of the TPO to question requirement of services, and also ascertain rendition of services, and on these two reasoning, he cannot benchmark the ALP of these services at NIL. It is also pertinent to observe that in A.Y.2010-11, assessee has paid ₹ 160,16,780/- to its AE for these services and that transaction was referred to the TPO. The ld.TPO did not recommend any adjustment in A.Y.2010-11. Therefore, no adjustment is required in the Asstt.Year 2009-10. We allow this ground also, and delete adjustment recommended at ₹ 2,24,01,998/-. Accordingly, ground no.2 of the assessee’s appeal in the Asstt.Year 2009-10 is allowed. Disallowance of depreciation - HELD THAT:- As expenditure was allowed to be capitalized in the cost of plant & machinery and depreciation was granted. In view of the above Tribunal’s order in the Asstt.Years 2007-08 and 2008-09, we are of the view that no interference is called for in the finding of the ld.CIT(A). This ground of appeal is rejected. Appeal of the Revenue is rejected.
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