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2011 (5) TMI 499 - AT - Income TaxTransfer pricing adjustment - Arm's length price - Software development services - Held that:- Since the OP/TC of the appellant at 12.49% is within the safe harbour range of (+/-)5% as per the proviso to section 92C(2) of OP/TC margin of 3 comparable companies at 13.01%, no adjustment is warranted on account of difference in arm's length price of the international transaction - Decided in favour of assessee. Expenditure on advertisement and sale promotion and recruitment and training expenses disallowed - AO is of the opinion that only 25% of the expenditure should be allowed during the year and the rest has to be added to the income of the assessee - Held that:- As it is not the case that the expenses are bogus and not incurred & also not the case that the entire expenses falls under the realm of capital expenses find ourselves in agreement with the contention of assessee that there is no concept of deferred revenue expenditure under the IT law - The expenditure of account of recruitment and training expenses and advertisement and sales promotion expenses cannot be said to be capital expenditure - Thus AO's action in this regard is not sustainable - Moreover,note that similar disallowance were deleted by the Ld. Commissioner of Income-tax (Appeals) in the assessment year 2004-05 against which the department did not file appeal before the Tribunal - Decided in favour of assessee.
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