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2017 (6) TMI 1253 - AT - Income TaxDisallowance of deduction claimed u/s 35D - proof of commencement of business - Held that:- As could be seen from material on record, neither before the AO nor before the ld. CIT(A), the assessee has brought any evidence to conclusively prove the fact that it has commenced its business activities by rendering any advisory services from June, 2009. In fact, only in response to the query raised by the Bench the assessee had furnished certain documentary evidences by way of additional evidence to demonstrate that it has rendered advisory services from June, 2009. Undisputedly, these evidences were not filed either before the AO or before the ld.CIT(A). Considering the fact that these evidences may have crucial bearing for determining the actual date of commencement of assessee’s business, we are inclined to admit the additional evidences. However, these documents were not filed before the departmental authorities. Therefore, to give a fair chance to the department, we are inclined to remit the issue to the file of the AO for fresh adjudication. TDS u/s 194J - Disallowance u/s 40(a)(ia) - Subscription fee paid by the assessee to M/s Bloomberg Data Services India Pvt.Ltd data service - Held that:- After analyzing the relevant facts we have noted that the subscription fee paid by the assessee to M/s Bloomberg Data Services India Pvt.Ltd data service was for accessing the database and is in the nature of subscription of e-magazine/journal. Therefore, the payment made cannot be treated as royalty or Fees Paid for Technical Services coming within the purview of section 194J. Notably, the aforesaid view has also been expressed by the Co-ordinate Bench of the Tribunal in the case of M/s. India Capital Markets P. Ltd (2013 (1) TMI 646 - ITAT MUMBAI). DR has failed to controvert the contention of the assessee that the payee has offered the income received towards subscription charges as in the return filed by it - neither there is requirement for the assessee to deduct tax at source on payment towards subscription charges paid to M/s Bloomberg Data Services India Pvt.Ltd. nor the assessee can be treated as an assessee in default u/s 201(1) - decided in favour of assessee Addition on account of transfer price adjustment - average arithmetic mean computation - Held that:- AO has considered the arithmetic mean of three comparable i.e. Crisil Risk and Infrastructure Solutions Ltd, Future Capital Investment Advisors Ltd and ICRA Management Consulting Services Ltd on the basis of multiple year data to work out the average arithmetic mean of 22.60%. Surprisingly, he had added 5% to the arithmetic mean of the three companies to determine the markup at 26.20% and applied the same markup to work out the profit of the assessee. When the AO himself has accepted the average arithmetic mean of three comparables on multiple year data at 22.60%, there is no reason to add further 5% to the said arithmetic mean to arrive at markup of 26.20%. We are unable to understand under which method as provided under Rule 10B, the AO can make such addition to the average arithmetic mean of the comparables. Thus, the profit worked out by applying the markup of 26.20% being contrary to statutory provisions cannot be sustained - TP adjustment made on that basis would not survive. Accordingly, we delete the addition. This grounds is allowed.
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