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2014 (4) TMI 75 - AT - Income TaxDisallowance u/s 36(1)(iii) - interest expense towards work in progress - Held that:- Assessee has not discharged onus on it to establish that no part of its borrowings stand utilized toward capital work-in-progress, so that no part of interest thereon is properly attributable thereto, so as to warrant being disallowed u/s.36(1)(iii) read with proviso thereto - Do not find any substance in assessee's case - Onus to prove its return and claims preferred thereby being only on assessee refer: CIT v. Calcutta Agency Ltd. [1950 (12) TMI 4 - SUPREME Court] - Matter restored back to allow assessee an opportunity to substantiate its case before assessing authority – Decided partly in favor of assessee. Transfer pricing adjustments - determination of ALP - operating margin - Held that:- The difference in the operating margin, as per the TPO's order itself, is within the range of 5% and, accordingly, no adjustment under law is required to be made. No doubt, the safe harbor rule of 5% is with reference to the arm's length price; the same however translates to an equivalent difference in the operating margin, as the costs toward the same are not disturbed. In fact, if a part of the interest cost, as contended by the Revenue, is to be excluded from the operating cost, being a part of the capital cost, the assessee's profit margin would rather stand further improved. - Addition is not valid - Decided in favor of assessee.
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