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2014 (12) TMI 927 - AT - Income TaxTransfer pricing adjustment – Determination of ALP – Payments made to AE at Nil – Assessee derived any benefit from services rendered by AE or not - Held that:- Following the decision in Commissioner of Income Tax-I Versus M/s. Cushman And Wakefield (India) Pvt. Ltd. [2014 (5) TMI 897 - DELHI HIGH COURT] - TPO cannot determine arm’s length price of the payments made by the assessee to its ‘AE’ at ‘nil’ for the reason that assessee did not derive any benefit from services rendered by AE – the TPO is to conduct a Transfer Pricing analysis to determine the arm’s length price (ALP) and not to determine whether there is a service from which assessee has derived benefit or not - the exercise to determine whether assessee had derived any benefit or not from payment of such management fee is to be examined by the AO and appropriate disallowance u/s 37 is called for the TPO had determined the ALP of payment of management fees at ‘NIL’ by holding that the assessee did not derive any benefit from services rendered by the AE - AO has to determine whether the assessee has derived any benefit from payment of professional fees and if any benefit had derived, whether such payment is commensurate to comparable transaction has to be examined by the TPO – thus, the matter is remitted back to the AO/TPO for fresh consideration – Decided in favour of assessee. Expenses on interior of a lease hold premises disallowed – Held that:- Assessee has incurred a sum of ₹ 40,017,141/- on interiors of lease hold premises - majority of these expenditures are expended for major renovation and these expenses are clearly capital in nature – as decided in assessee’s own case, it has been held that prima facie the expenses were of capital in nature - Even if the premises were on lease, because of the provision to Explanation (i) to section 32 of the Act the expenditure of capital nature on the construction of any structure or doing of any work in or in relation to and by way of renovation or expansion or improvement to the building, it is to be assumed as if the said structure or work is a building owned by the assessee – the authority is justified in disallowing a sum of ₹ 4,00,17,141/- as capital expenditure and allowing depreciation on the same – Decided against assessee.
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