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2017 (7) TMI 1001 - AT - Income TaxArm’s length price - salary expenses of two expatriate employees and reimbursement of actual expenses - Held that:- While the employees were sent to India for a certain period of time, the employees were still rightfully entitled to the same level of salary as they were earning in their country origin. This fact has to be verified by the TPO. Further the Ld. AR pointed out that both the employees brought with them the valuable expertise and experience for the assessee company. The Ld. AR demonstrated the same with the relevant documents which was before the DRP, but the DRP has not taken cognizance of the same. During the hearing, the Ld. DR pointed out that all the relevant documents in support of Ld. AR’s submissions related to salary expenses of two expatriate employees, the same was not tendered before the TPO in the aforementioned. There is no finding to that effect in TPO’s order but though it was submitted before the DRP, the DRP also failed to look into this crucial evidence. Therefore, this issue needs to be looked into and these documents have to be verified. The DRP order is non speaking order. Therefore, this issue is remanded back to the TPO/A.O. Needless to say, the assessee will be allowed a reasonable opportunity of hearing. Payments in the nature of cost contributions/ reimbursements - Held that:- TPO has disallowed this expenses by making adjustment with respect to consultancy charges of ₹ 2.68 crores which was totally ignored by the Assessing Officer while giving effect to its order dated 15/11/2010. The A.O is directed to make proper adjustment as relates to consultancy charges and then quantify the addition. Appeal of the assessee partly allowed for statistical purpose.
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