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2018 (5) TMI 1256 - ITAT VISAKHAPATNAMTransfer pricing adjustment - ALP determination - corporate guarantee commission charged by the assessee company - Held that:- The assessee’s case the corporate guarantee commission charged by the assessee was 0.90% which is more than the corporate guarantee commission of 0.25% to 0.53% approved by various judicial forums. Therefore, respectfully following the view taken by the coordinate benches, we hold that the corporate guarantee commission charged by the assessee company is at ALP and no adjustment is required. Accordingly, we delete the addition made by the A.O. and allow the appeal of the assessee. TPA imputing notional interest on outstanding amounts from A.E. - Held that:- Since the invoices were raised on 31.3.2013 and credit period allowed was 60 days, we agree with the Ld. A.R’s argument that the notional interest does not accrue or arise in the year under consideration, therefore, the addition made by the A.O. on account of notional interest is unsustainable as per the system of accounting followed by the assessee. The assessee is following the mercantile system of accounting and the interest accrues only when the debt falls due and the same is remained unpaid. Since the debt do not fall due in the impugned Assessment year, we hold that the interest is neither accrued nor crystalised in the year under consideration. Accordingly, the same is deleted - The department has not made out case of systematic planning of allowing the undue credit to the AE - the revenue has not made out case of disallowance of notional interest on delayed payments and accordingly, we set aside the orders of the authorities below and delete the addition - Decided in favour of assessee Sponsorship expenses - allowable business expenses - Held that:- There is no need to have direct nexus of the assessee’s business with the sponsorship linked events. Even indirect benefit is sufficient to sponsor the sports or social or economic events. We are of the considered view that the social events, sports events and the business events which involves the participation of various institutions would have direct or indirect impact on the assessee’s business and the expenditure incurred on such events is business expenditure.Therefore, we hold that the sponsorship amount is a business expenditure, which required to be allowed as deduction - Case of JCIT Vs. ITC Limited followed [2007 (9) TMI 295 - ITAT CALCUTTA] - Decided in favour of assessee Legal and professional charges allowability - Held that:- We hold that the expenditure incurred for the purpose of Okha Project in connection with the field study as discussed is a business expenditure and allowable u/s 37(1). Accordingly, we set aside the orders of the authorities below and allow the appeal of the assessee. Disallowance is called for u/s 14A - Held that:- A.O. is not permitted to entertain the additional claim of the assessee without the revised return of income, the appellate authorities are not barred to entertain the additional claim of the assessee during the appellate proceedings. This view is supported by the case laws relied upon by the assessee as well as the decision in the case of Goetz India Ltd. Vs. CIT [2006 (3) TMI 75 - SUPREME Court]. In the assessee’s case the assessee has made disallowance of expenditure u/s 14A of the Act, but there was no exempt income as claimed by the assessee. Therefore, we are of the view that the issue required to be remitted back to the file of the A.O. to consider the disallowance u/s 14A of the Act on the facts and merits of the case. Remit the matter back to the file of the A.O. to consider the issue afresh on merits.
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