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2015 (10) TMI 2509 - HC - Income TaxALP of the payment of royalty - Held that:- On the question of addition made by the AO on account of ALP for the payment of royalty, learned counsel for the Assessee has rightly referred to the decision in Commissioner of Income Tax v. Sony Ericsson Mobile Communication (2015 (3) TMI 580 - DELHI HIGH COURT ) where the determination of the ALP of the royalty paid as Nil was not approved. There is merit in the contention of learned counsel for the Assessee that once the TPO found that no adjustment was called for under the TNMM method, no adjustment could have been made by applying some other method as that would be contrary to Section 92C(1) of the Act. The Court also finds that there is no justification for the TPO to come to the conclusion that the payment of royalty was not necessary in the present case particularly since the collaboration agreement between the Assessee and Stanley has been continuing since 1984. As held by the ITAT, after a detailed examination of the clauses of the collaboration agreement, the Assessee did receive full technical assistance from Stanley for which the royalty payment was made. Thus the Court is not inclined to frame a question on the issue of deletion of the addition sought to be made by the AO for the AYs in question on account of ALP of the payment of royalty. Adjustment under Section 115JB on account of provision for retirement benefits - Held that:- ITAT noted that the provision was made on the basis of actual valuation and was not a contingent liability. Reference was made to the decision in Bharat Earth Movers v. Commissioner of Income Tax (2000 (8) TMI 4 - SUPREME Court ). The order of the ITAT upholding the order of CIT (A) is not found to be perverse. The Court declines to frame a question on this issue. Disallowance of expenses on account of foreign trips of the Director of the Assessee after holding that the visits made to USA and Dubai were for the business purposes. The disallowance by the AO of the said expenses was found to be not justified. Since the above finding turned purely on facts, the order of the CIT (A) as affirmed by the ITAT, does not give rise to any substantial question of law. Disallowance of the expenses on account of provision for warranty - ITAT deleted it since the provision was made by the assessee based on actual warranty expenses incurred for the unexpired warranty period - Held that:- As rightly pointed out by learned counsel for the Assessee the question is covered in its favour by the decisions in Rotork Controls Pvt. Ltd. v. Commissioner of Income Tax (2009 (5) TMI 16 - SUPREME COURT OF INDIA ) and Commissioner of Income Tax v. Becton Disckinsion [2012 (12) TMI 210 - DELHI HIGH COURT]. Therefore, no substantial question of law arises as regards this issue as well. Depreciation on computer peripherals @ 60% - Held that:- Revenue does not dispute that the question stands answered in favour of the Assessee by the decision in Commissioner of Income Tax v. BSES Rajdhani Power Limited (2010 (8) TMI 58 - DELHI HIGH COURT ).
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