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2017 (1) TMI 1617 - AT - Income TaxTPA - Computation of operating margins of assessee and comparable companies by including export incentives as operating income - Revenue is in appeal only against inclusion of export incentives in the operating income while computing operating margins of the assessee and the comparable companies - Held that:- The Mumbai Bench of Tribunal in Welspun Zucchi Textiles Ltd. Vs. ACIT [2013 (9) TMI 336 - ITAT MUMBAI] had held that the DEPB benefit received during the year under consideration should be considered as part of turnover of the assessee for working out the profit margins to make the comparison of like to like and similar to similar, where such DEPB benefit was taken into account in the comparable cases while working out their profit margins. HC in CIT Vs. Welspun Zucchi Textiles Ltd. [2017 (1) TMI 1037 - BOMBAY HIGH COURT] have held that DEPB was includable in arriving at the operating profit and the appeal of Revenue was dismissed. Following the same parity of reasoning, we hold that export incentives were to be included as operating income of the assessee and the comparables and the grounds of appeal raised by the Revenue are thus, dismissed. TDS u/s 195 - Non deduction of tds on professional fees - case of assessee was that it was reimbursement of cost of allocated expenses and was not technical fees under section 9(1)(vii) or under Article 12 of India-Luxembourg Treaty - whether charges paid to associate enterprises are allowable where tax deducted has not been paid in account of treasury - Held that:- In view of the plea raised by the assessee, we direct the Assessing Officer to verify the contentions of assessee with regard to payment of tax at source and in case the same has been paid within time or before the due date of filing the return of income, then the same are to be allowed as expenditure in the hands of assessee. Further, where the entries are on account of reimbursement of expenses and the assessee can establish its claim by verification from bills, then such reimbursements are not amenable to tax to deduction. Certain entries have been reversed and credited to expenditure account itself in the accounting year itself. The Assessing Officer is to verify the same and decide the issue accordingly. - Decided in favour of assessee for statistical purposes. Disallowance on account of rate difference - AO was of the view that it is contingent liability - Held that :- We find no merit in the orders of authorities below, where the provision on account of rate difference is made in the books of account against the goods supplied by the respective parties and invoices have been received from the said parties against rate difference, details of which are available with the assessee. Further, the assessee has made the payments in respect of said expenditure in the succeeding year. In such circumstances, it is not an unascertained liability but an accrued liability, which has been recognized by the assessee and there is no question of it being contingent liability, since the assessee has already booked purchases in respect thereof. Accordingly, we direct the Assessing Officer to allow the provision of ₹ 12 lakhs in the hands of assessee. - Decided in favour of assessee.
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