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2017 (2) TMI 1388 - AT - Income TaxTP addition on Import of crystal and crystal components - MAM selection - Held that:- It is noticed that the AO passed the order for the current year by mainly relying on the view taken by him for the A.Y. 2004-05. The ld. CIT(A) has also passed a combined order and there is no separate discussion for the A.Y. 2005-06. The appeal for the A.Y. 2004-05 was argued simultaneously and the submissions made for such earlier year were adopted by both the sides for the instant year as well. We have passed a separate order for the A.Y. 2004-05 in which rejection of the CUP method by the authorities below has been upheld and further direction has been given to the AO/TPO for a fresh determination of the ALP of this transaction, firstly, by considering the application of RPM and if, due to one reason or the other, the same cannot be applied, then, the TNMM. TP addition on AMP Expenses - Held that:- As relying on SONY ERICSSON MOBILE COMMUNICATIONS INDIA PVT. LTD. (NOW KNOWN AS SONY INDIA LIMITED) & OTHERS VERSUS COMMISSIONER OF INCOME TAX – III [2015 (3) TMI 580 - DELHI HIGH COURT] we are of the considered opinion that it would be in the fitness of things if the impugned order is set aside and the matter is restored to the file of TPO/AO for a fresh determination of the question as to whether there exists an international transaction of AMP expenses. If the existence of such an international transaction is not proved, the matter would end there and then, calling for no transfer pricing addition. If, on the other hand, the international transaction is found to be existing, then the TPO would determine the ALP of such an international transaction. Addition in respect of Provision of doubtful debts - AO did not allow deduction for this sum as it was a provision and not an actual write off - Held that:- Amount of provision is not deductible. Actual amount of write off has to be allowed as deduction u/s 36(1)(vii). Reversal of provision should not lead to taxable income. However, deduction allowed in respect of provision for doubtful debts for the A.Y. 2003-04 should be taken into consideration while allowing deduction on actual write off or reversal of provisions to the relevant extent so that no double deduction gets allowed. Disallowance of advertisement and publicity expenses - Held that:- Following the view taken in our order for the A.Y. 2004-05, we hold that the entire amount of advertisement and publicity expenses should be allowed as deduction in the year of incurring itself. It is however, made clear no further deduction for 2/3rd of the total expenditure for the earlier years be granted as the same will lead to double deduction. If such a deduction has already been allowed, then the same should be reversed to that extent. This ground of the Revenue is not allowed. Depreciation on computer peripherals at 60% - Held that:- The Hon’ble Delhi High Court in the case of BSES Yamuna Powers Ltd.(2010 (8) TMI 58 - DELHI HIGH COURT), has held that depreciation on computer peripherals should be allowed at 60%. We, therefore, uphold the view taken by the ld. CIT(A) on this issue. This ground is not allowed.
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