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2013 (8) TMI 926 - AT - Income TaxTransfer pricing adjustment - MAM - whether CPM is to be considered as the most appropriate method for determining ALP and suitable adjustments should be made an account for differences between the export and domestic segment? - Held that:- The entire marketing cost is pertaining to domestic segment and the same should be reduced from the selling price. Similarly, there are no bad debts in export segments and therefore, the amount of bad debts should be reduced from the selling price of the domestic segment. According to the Id. DR the assessee has not quantified any adjustments for volume difference. While assessee had enclosed a letter wherein it was mentioned that if the target achieved is upto 20%, turnover discount of 1% was to be given. On that basis, the assessee had requested for an adjustment of about 20% considering the fact that the top five AEs had cumulatively placed orders of more than ₹ 180 Crs. In this regard, we find that there are so many differences in the two segments and considering the fact that suitable adjustments are not possible, CPM has to be rejected, There are differences as accepted by the Transfer Pricing Officer and therefore, in view of the decision of Drilbits International Pvt. Ltd.,[2011 (8) TMI 1083 - ITAT PUNE ] CPM should not be applied, according to us. Addition u/s 14A - Held that:- Most of dividend received was under the Reinvest operation i.e. the dividend was automatically reinvested by the respective mutual fund. No portion of salary paid to staff and other expenses were incurred in relation to exempt dividend. According to assessee, there is nothing on record to suggest that assessee had incurred expenditure for earning of exempt income. Taking all facts and circumstances disallowance u/s 14A is restricted to ₹ 2,50,000/-. Assessing Officer is directed accordingly. Disallowance of EDP service charges - Held that:- Assessee claims to have made this payment to its Associated Enterprises for usage of service and assessee is not aware of software's or licences as well as infrastructure which is acquired by associated enterprises in rendering the service. This issue need disapprove until the matter. Let this expenditure be looked in light of above and submissions of assessee. Assessing Officer can also look into fact whether this expenditure is made for usage of service and has not acquired any asset of enduring nature. Assessing Officer is directed to decide this issue as per fact and law after giving opportunity of hearing to the assessee.
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