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2010 (7) TMI 1047 - AT - Income TaxDeleting the addition u/s 92CA(3) - arm’s length price - International Transaction - royalty paid - In Present case, Department filled an appeal on the grounds that The ld. CIT(A) erred, in law and on the facts and circumstances of the case, in deleting the addition of ₹ 43,68,838/- being the difference in the arm’s length price and the value of the International Transaction on account of Royalty. The AO made this addition on the basis of TPO’s order passed u/s 92CA(3) of the I.T. Act. HELD THAT:- In fact, The expenditure in question was no doubt incurred for business purposes and it was this which was the determining the factor, as rightly noted by the ld. CIT(A). The payments made by the assessee to the Joint MD and the Technical Adviser were correctly found by the ld. CIT(A) to be genuine business expenditure. It remains undisputed that as per the OECD guidelines, the assessee was not a contract manufacturer. Rather, it was an independent company. The royalty was paid by the assessee under the Technology Agreement, computed on the basis of the entire production/sales. Considering, all the facts We do not find any reason to record any variance with the well reasoned elaborate findings of fact recorded by the ld. CIT(A). The same are hereby upheld. In the result, the appeal filed by the Department is dismissed.
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