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2015 (11) TMI 411 - HC - Income TaxDisallowance of 'Export Promotion Expenses'- as per ITAT foreign travelling expenses incurred by the President, Director and the Executive Director were not incurred wholly and exclusively for the purpose of the business - Held that:- Before the authorities including the Tribunal the deduction was sought on the aforesaid travel expenses only on the ground that these expenses have been incurred for the purpose of meeting its foreign buyers. Undisputedly, it has only one buyer who is situated at Singapore. No one cannot dispute the proposition that it is for the assessee concerned to decide as to what expenses is necessary for its business and it is not for the Assessing officer to disallow the expenses which the assessee feels is necessary for its business. In the present facts, the case of the assessee before the Tribunal is that those expenses are necessary to meet the foreign buyers. In this view of the matter, the view taken by the Authorities under the Act to restrict the expenses of travel only to Singapore visit where the foreign buyer of the appellant is situated, cannot be said to be perverse. It is a possible view. The fact that the assessee's expenses on travel have been allowed for subsequent years or have been set aside by the Tribunal in the earlier Assessment Years or subsequent Assessment Years, would not by itself govern the issue. It all depend upon the claim made for deduction and the contention of the assessee with regard to what was that expenditure incurred in that particular year. Transfer pricing adjustment - denial of comparable - Held that:- We find that the three comparables which were relied upon by the appellant-assessee before the CIT(A) had not been examined by CIT(A) on merits of its applicability for the subject Assessment Year nor did the TPO, as same was not put before it for the subject Assessment Year. No fault can be found with the order of the Tribunal to the extent it holds that merely because a comparable has been used in the subsequent assessment year for determining the ALP, it would not ispo facto apply to determine the ALP in the subsequent Assessment Year. The issue be restored to TPO to determine whether or not the three comparables companies which have admittedly have been accepted as comparables for subsequent Assessment year can be considered as comparables for the subject assessment year. If the answer is in the affirmative by the TPO, then necessary adjustment would be needed to be done so as to make an appropriate comparison between the sale made by the appellant-assessee to its A.E. and the independent sales made of three comparables, alongwith the four comparables already on record. - Decided in favour of the appellant-assessee
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