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2016 (7) TMI 1245 - HC - Income TaxTransfer pricing adjustment - justification on application of Arms Length Price (ALP) only to A.E. transactions and not to all transactions - Held that:- Issue raised herein with regard to transfer pricing adjustments stand concluded against the revenue and in favour of the respondent – assessee Allowable deduction under Section 80IB and 80IC - Held that:- We find that the impugned order of the Tribunal allowed the respondent – assessee's appeal before it by following a decision of this Court in Zandu Pharmaceuticals Works Ltd. V. CIT [2012 (9) TMI 620 - BOMBAY HIGH COURT]held that so far as research and interest expenses are concerned, it can only be allowed to the extent it has nexus to the unit claiming the deduction. The grievance of the revenue before us is that the aforesaid decision would have no application to the present facts as it is distinguishable. However, besides stating the above nothing has been pointed out in support of its submission that the Zandu Pharmaceuticals Works Ltd. (supra) has no application. In the above view, as the impugned order of the Tribunal has followed the binding decision of this Court, no substantial question of law. Expenditure termination of a contract - Held that:- The view taken by the Tribunal on facts before it that the expenditure was incurred on account of the commercial expediency and same is eligible to deduction under Section 37(1) of the Act, is a possible view. Set off of brought forward depreciation losses of amalgamating company for the period prior to amendment in sub section (2) of Section 32 - Held that:- We find that the impugned order of the Tribunal while allowing the Assessee - respondents' claim follows the decision of the Gujarat High Court in General Motors India Pvt. Ltd. Vs. DCIT [2012 (8) TMI 714 - GUJARAT HIGH COURT ] wherein on identical facts it was held that the unabsorbed depreciation for the Assessment Year 1997-98 upto Assessment Year 2001-02 could be allowed to be set off, if it was still unabsorbed on 1st April, 2001. The above decision also placed upon the CBDT circular No.14 of 2001 dated 22nd November, 2001 to hold that any unabsorbed depreciation which is available on 1st day of April, 2001 would be dealt with in accordance with the provisions of Section 32(2) of the Act as amended by the Finance Act of 2001. Moreover, the Circular No.14 of 2001 issued by the CBDT clarifies that restriction of eight years to carry forward and set off the unabsorbed depreciation has been dispensed with. Consequently, unabsorbed depreciation for the intervening periods between assessment 1997-98 upto 2001-02, if available in the assessment year 2002-03 would be allowable as part of carried forward depreciation from Assessment Year 2002-03 onwards. No decision contrary to the decision of the Gujarat High Court has been shown to us. No substantial question of law. Appeal admitted on question no.6. - Whether on facts and in circumstances of the case and in law the Tribunal was justified in directing to delete the disallowance of expenditure under Section 40(a)(ia) r.w.s. 194C(2) made by the Assessing Officer on account of short deduction of tax ?
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