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2018 (4) TMI 33 - ITAT DELHIAdditions on account of advances and service tax written off - Held that:- We are of the considered view that depositing the security deposit for taking the office space on lease by the taxpayer and subsequently terminating the agreement due to business consideration is a business decision which cannot be questioned by the Revenue. So, following the decision rendered by the coordinate Bench of the Tribunal in Fab India Overseas (P.) Ltd. (2013 (9) TMI 301 - ITAT DELHI) in an identical issue, the addition made by the AO on account of advances and service tax written off is ordered to be deleted. Addition on account of non-charging of mark-up on support service charges billed to AT&T Global Network Services India Pvt. Ltd. (AGNSI) - Held that:- In case of both the resident parties, terms and conditions of the arrangement cannot be questioned by the Revenue unless specifically provided under the Act. In case of a contract by both the parties who are admittedly resident Indian entities, they make the law for themselves which cannot be interfered unless contract is unlawful or specially barred by the law of the land. Moreover by such a decision of not charging mark up by the taxpayer on support services charges billed to AGNSI, no loss of tax has been caused to Revenue. So, the findings of the TPO/DRP that the taxpayer is not only to cut charges but mark up also is not sustainable in the eyes of law. So, we order to delete the addition on account of not charging of mark up on support services charges billed to AGNSI. When the taxpayer has worked out the liability by using a substantial degree of estimation by proving 95% of the invoices on the basis of historical trend, no disallowance can be made. So, we order to delete this addition. Comparability analysis - Held that:- We are of the considered view that Government undertakings/companies are not the suitable comparables for benchmarking the international transaction. AO is directed to verify all the Government undertakings / companies from the final set of comparables which are taking preferential treatment from Government in getting contract etc. and are not driven by profit motive alone impacting the profit margin and to exclude the same and then benchmark the international transactions qua Network Support Services. TDS credit - Held that:- AO allowed credit of TDS 6,54,89,076/- as against the claim of ₹ 6,57,84,537/- claimed by the taxpayer in its revised return of income filed for the year under assessment. When the taxpayer has brought on record the complete detail of TDS to the tune of ₹ 6,57,84,537/- by filing revised return of income, the AO has erred in granting short credit thereof. So, we direct the AO to provide full credit of TDS of ₹ 6,57,84,537/- after duly verifying the facts.
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