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2013 (8) TMI 367 - AT - Income TaxAdjustment in arm's length price - Adjustment in regard to advertisement, marketing and sales proportion expenditure - A.O. made addition in reference to difference of arm's length price - Held that:- a fresh exercise has to be undertaken, both by the assessee, as well as by the TPO, to arrive at the arm's length price, based on the principle and propositions of law - assessee should be granted liberty to furnish fresh transfer pricing study report, with comparables obtain by undertaking of fresh search. The TPO should also be at liberty to conduct a fresh search and arrive at appropriate comparable/conclusions - Following decision of Asstt. Commissioner of Income Versus M/s LG Electronics India Pvt. Ltd. [2013 (5) TMI 633 - ITAT DELHI] - Decided in favour of assessee. Depreciation on Plant and Machinery - Held that:- assessee has not claimed depreciation on goods which have been sold / scraped in the earlier years. Moreover, it is a fact that the assessee was engaged in the business of selling air- conditioners. This by itself is sufficient to prove that during the year under consideration relevant block assets is used by the assessee in its business - individual usage of the asset is only relevant in the first year when the asset was put to use and not subsequent years after it has formed part of the block of assets - Decided in favour of assessee. Depreciation on computer peripherals - A.O. disallowed depreciation - Held that:- computer accessories and peripherals such as, printers, scanners and server etc. form an integral part of the computer system. In fact, the computer accessories and peripherals cannot be used without the computer. Consequently, as they are the part of the computer system, they are entitled to depreciation at the higher rate of 60% - Following decision of COMMISSIONER OF INCOME TAX Versus BSES YAMUNA POWERS LLD. / BSES RAJDHANI POWERS LTD. [2010 (8) TMI 58 - DELHI HIGH COURT] - Decided in favour of assessee. Devaluation of stock - A.O. disallowed 20% of the amount of devaluation of stock - Held that:- The assessee has been following his method of valuation of stock during all the previous year as well as the subsequent years - When the revenue has been accepting this method of valuation for many years, there is no reason as to how the same can be disturbed during the year, the disallowance in question is made on ad hoc basis - opening stock of succeeding year is increased by the said adjustment to the value of stock and consequently the profits of the subsequent year get effected to that extent. If the closing stock is valued by applying a particular yardstick or method, then, the opening stock of the year would also be required to be adjusted - Following decision of CIT Vs. Triveni Engineering and Industries Ltd. [2010 (11) TMI 90 - DELHI HIGH COURT] - Decided in favour of assessee. Disallowance of installation expenses - A.O. disallowed expenditure on the ground that the sale has not crystallized - Held that:- income attributable to the installation expenses has been recognized during the year and on the principle of matching income with expenditure, this claim has to be allowed - Decided in favour of assessee.
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