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2022 (1) TMI 413 - AT - Income TaxTP Adjustment - MAM Selection - RPM OR TNMM - adoption of the Most Appropriate Method (MAM) for determination of Arm's Length Price (ALP) in respect of an international transaction of sale of reagents by the Assessee to its Associated Enterprise (AE) - TPO concluded that the Assessee is not a mere distributor and rejected the usage of RPM which the Assessee had considered as the Most Appropriate Method (MAM) and instead chose Transactional Net Margin Method (TNMM) as the MAM - HELD THAT:- It is undisputed before us that identical issue had come up for consideration before the ITAT Mumbai Bench in Assessee's own case in AY 2010-11[2019 (6) TMI 601 - ITAT MUMBAI] held that RPM was the MAM and directed the TPO to determine ALP applying RPM as the MAM. Following the aforesaid decision of the tribunal we hold that RPM is the MAM for determining ALP and the AO/TPO is directed to compute the ALP as directed by the Tribunal after affording Assessee opportunity of being heard. Addition u/s.43B towards Bonus and Leave encashment as amount was not paid within the due date of filing the return - assessee argued amount reversed in the subsequent periods and which are already considered in the income of AY 2016-17 upon such reversal - HELD THAT:- Since as per the provisions of Sec. 43B(f) of the Act, provision on account of bonus or leave encashment is not allowable as deduction except on the basis of actual payment irrespective of the method of accounting followed by an Assessee, the disallowance u/s. 43B of the Act for AY 2015-16 is proper. However, since the same amount was offered to tax in AY 2016-17 and taxed in that year, there would be double addition and therefore the proper course would be to direct that the income offered in subsequent year 2016-17 and taxed to that extent should not be taxed. The AO will give necessary consequential relief to the Assessee. Appeal by the Assessee is partly allowed for statistical purpose.
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