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2013 (9) TMI 163 - AT - Income TaxAdjustment of arm's length price - Import of raw materials - Payment of technical know how fees - Held that:- applying CUP method to the services made to the assessee during the year is not justified. - the adjustment made by TPO is nothing but disallowance of expenses which cannot be upheld. - That there is nothing produced before us to controvert the claim of the services that in case the assessee had paid to the AE at man hour rate for the technical services provided during the year in relation to SAP implementation, the fees payable would have been significantly higher. - additions deleted - Decided in favour of assessee. Business profit u/s 28(v) or capital gains - sale of A&R Business - slump sale - the assessee as well as the purchaser of A&R Business viz MSPL, both are sister concern and there parent company is M/s Merck KGaA, Germany - Held that:- section 28(iv) is applicable where benefit/perquisites are received in kind and is not applicable where money is involved. Therefore, reliance placed by ld. AR on the decision of Hon’ble Bombay High Court in the case of Mahindra And Mahindra Ltd (2003 (1) TMI 71 - BOMBAY High Court) has substance. We also agree with the ld. AR that it is not for the revenue to rewrite the terms of agreement but at the same time, the AO is entitled to consider the nature of the receipt and the circumstances in which the amount has been received by the assessee under the agreement entered into. We are of the considered view that the reliance placed by the ld. AR on the decision of ITAT in the case of Sangeeta Wij (2012 (7) TMI 688 - ITAT DELHI) is not applicable to the facts of the present case as in that case. Considering the facts of the case, and the reasons stated hereinabove that the assessee has not been able to place any material on record on the basis of which the assessee has valued intangible assets and whether the amount of Rs.65,50,00,000/- may be considered as the amount received towards not compete fee or for other consideration, we are of the considered view that the said issue be restored to AO to consider nature of receipt in the light of evidence afresh. - Matter remanded back. Disallowance of Rs.2,96,71,013/- being 70% of cost of free samples distributed by the assessee - Held that:- Giving free samples is a normal business practice in pharmaceutical business and, therefore, disallowance of entire expenditure is prima facie unjustified. The matter requires fresh examination after verification of details about names and addresses of doctors before the AO. Disallowance u/s 14A - Held that:- It will be reasonable and fair to consider 1% of exempt income towards expenses for earning the dividend income by the assessee in the financial year under consideration. Therefore, the orders of the authorities below is modified by restricting the disallowance to Rs.10,15,400/- as against Rs.83,04,945/- disallowed by the AO. Valuation of closing stock - unutilized cenvat credit - appellant followed net method of accounting - Held that:- matter remanded back to the AO that if the adjustment is made to the value of closing stock, then the adjustment on account of tax, duty etc. is also required to be made to the purchases, sales and opening stock as well as the assessee has stated to be following exclusive method.
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