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2014 (1) TMI 1193 - AT - Income TaxTransfer pricing adjustment - Held that:- The appellant by an Internal CUP (Travelex / HSBC) has demonstrated that counting fees for export of currency entails more expense than corresponding service fees or / incentive receipts - It has passed the test of comparability - Counting fees for currency exported is charged by third parties (HSBC / Travelex) and so if the appellant AE did not charge it last year or this year, does not in any way negate the crucial fact that a third independent part would have charged it any case - The fundamentals underlying transfer pricing involves setting of prices within an MNE in line with what third parties would have negotiated in similar circumstances - In the present case had the AE insisted on charging counting fees for currency exported then it would have been more than the corresponding incentives / service for income and the appellant would have been worse off – The addition has rightly been deleted by CIT(A) – Decided against Revenue. Disallowance of expenditure u/s 14A – Held that:- CIT (A) has rightly held that in view of the judgment in the case of Godrej & Boyce Mfg. Co. Ltd. v. Dy. CIT, the provisions of Rule-8D cannot be applied to the assessee for the assessment year under consideration 2005-2007 - 2% of the exempt income was considered as reasonable disallowance u/s 14A - This figure is approximately works out to 5% of the investments as on 31.3.2005 – Decided against Revenue. Depreciation on leasehold premises - Held that:- The asset was never put to use till date - It is not legally correct that the leased premise was capitalized and added to the block of assets - Such ineligible asset, which hass not fulfilled the conditions of section 32 of the Act should not have been included in the block of assets - Decided against assessee.
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