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2022 (3) TMI 1332 - ITAT DELHIAddition on account of ALP - CIT(A) deleted the adjustment made by the TPO in connection with international transaction on account of - TPO held that the case of the assessee failed on need, benefit and rendition test to justify any payment for reimbursements paid to the parent entity payments expatriates - HELD THAT:- This issue stands adjudicated for the A.Y. 2007-08, A.Y. 2008-09, A.Y. 2009-10 and A.Y. 2010-11 wherein it was held that there was no meaningful analysis or evidence provided by the TPO to hold that entire payment made by the assessee to expatriate should be reduced to zero. Since, the matter squarely covered by the order of the Tribunal, the vehement arguments of the ld. DR have been duly considered. However, in the absence of any material change in the factual matrix and legal proposition, we decline to interfere with the order of the ld. CIT(A). Security deposit written off - assessee has entered into a letter of intent for obtaining shops on lease. As per this letter, the assessee was required to pay security deposits at the time of executing this letter of intent. As per the termination clause of the letter, in case the lease has been terminated by the lessee, the entire amount of security deposit shall be forfeited by the lessor - HELD THAT:- As gone through the judgment in the case of Badridas Daga [1958 (4) TMI 2 - SUPREME COURT] wherein it was held that "the profit to be assessed are the real profits and they must be ascertained on ordinary principles of commercial training and commercial accounting. The profit should be computed after deducting losses and expenditure incurred for the purposes of business unless such losses or expenditure are expressly, or by necessary implication, disallowed by the Act. Hon'ble Supreme Court in the case of CIT vs. Nainital Bank Ltd.[1964 (9) TMI 11 - SUPREME COURT] wherein it was held that "under section 28, the trading loss of a business is deductible in computing the profits earned by a business. Every loss is not deductible unless it is incurred in carrying out the operation of the business and is incidental to the operation. Whether loss is incidental to the operation of a business or not, is a question of fact to be decided on facts of each case, having regard to the nature of the operation carried on and the nature of risk involved in carrying them out. The degree of the risk or its frequency is not much relevant but its nexus to the nature of the business is material. Having gone through the entire judgments quoted by both the parties, provisions of the Act pertaining to interplay between Section 28 and Section 37 and facts of the case, we have no hesitation to hold that the assessee be allowed to claim the loss incurred in forfeiture of security deposits given for lease of rental premises as the expenses are incurred wholly and exclusively for the purpose of business. - Decided against revenue.
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