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2013 (9) TMI 12 - AT - Income TaxAdjustment of transfer pricing - Method of computation - Held that:- In subsequent year the DRP has accepted the CUP method as the Most Appropriate Method - As no distinguishing facts have been brought on record, there is no reason why the directions issued by the DRP for AY 2006- 07 should not be followed for the year under consideration when the facts and the circumstances for payment of royalty are the same - AO is directed to examine the CUP offered by the assessee in its TP report and adjustment, if any, required should be made on that basis - Decided in favour of assessee. Claim of bed debt - Amounts paid for development of websites is allowed as business loss– If the websites had materialized, the expenditure could not have been viewed as capital expenditure because the website is put up for the purposes of day-to-day running of the business and even if one were to view that some enduring benefit is obtained by the assessee, the benefit cannot be said to accrue to the assessee in the capital field - A website is something where full information about the assessee’s business is given and it helps the assessee’s customers in dealing with it - A website constantly needs updating, otherwise it may become obsolete - It helps in the smooth and efficient running of the day-to-day business - The expenditure would have been allowable as revenue expenditure; as a corollary, when the website did not materialize, the amounts advanced to the companies who were engaged to develop the websites, when they became irrecoverable, can be written off and claimed as loss incidental to the business. The loss is thus allowable as business loss in terms of section 28 of the Act - Following decision of Deputy Commissioner of Income Tax Versus M/s Edelweiss Capital Ltd., Mumbai [2011 (2) TMI 284 - ITAT MUMBAI] - Decided in favour of assessee. Disallowance u/s 14A - Held that:- AO has applied Rule 8D by invoking the provisions of section 14A of the Act. It is now well settled that Rule 8D is applicable from AY 2008-09 as is held in the case of DCIT vs. Godrej and Boyce Manufacturing Co. Ltd., [2010 (8) TMI 77 - BOMBAY HIGH COURT]. The CIT(A) has given a very categorical finding that the dividend warrants were credited electronically. However, the CIT(A) has restricted the disallowance to ₹ 2 lakhs, which, in our considerate view and on the facts of the case appear to be very reasonable. No reason to interfere with the findings of the Ld. CIT(A) - Decided in favour of assessee.
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