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2017 (4) TMI 1281 - HC - Income TaxInclusion of Modvat in opening stock in the light of section 145A - addition on account of payment to persons referred to u/s. 40A(2)(b) - depreciation not allowable on the testing equipments not used by the assessee for its business - royalty payment @ @2% or 1%- Held that:- It is an agreed position between the parties that the aforesaid questions as urged herein, stand concluded against the Revenue and in favour of the Respondent-Assessee in assessee's own case [2017 (3) TMI 1520 - BOMBAY HIGH COURT] Addition being the transfer pricing adjustment on account of sales promotion and publicity expenses - Tribunal deleted addition - Held that:- TPO is obliged under the law to determine the ALP by following any one of the prescribed methods of determining the ALP as detailed in Section 92C(1) of the Act. In this case, there is nothing on record to indicate that the TPO had applied any one of the prescribed methods in Section 92C(1) of the Act to determine the ALP before disallowing the payment of ₹ 200.82 lakhs incurred by the Respondent on account of publicity and sales management as being excessive and/or payable by its parent, M/s. Johnson & Johnson, USA. The impugned order holds that transfer pricing adjustment done by disallowing the payment, on the basis of an assumption that it is excessive, is an action completely dehors the provisions of transfer pricing adjustment found in chapter X of the Act. The determination of the ALP has to be done only by following one of the methods prescribed under the Act. The Revenue has not acted in accordance with the clear mandate of law. Appeal admitted on substantial questions at (c), (e), (f), (g), (h) and (k).
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