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2016 (7) TMI 1493 - ITAT CHENNAIDisallowance u/s 10A - splitting up or reconstruction of the existing unit - Held that:- DRP directed the Assessing Officer to consider the claim of the assessee in the light of the CBDT Circular No.1 of 2013 dated 17.1.2013. A similar direction was given by this Tribunal in assessee’s own case for assessment year 2007-08. CIT(A), for the assessment year 2007-08, in fact, examined this issue and found that there was no case for splitting up or reconstruction, and accordingly, allowed the claim of the assessee u/s 10A. The order of the CIT(A) for the assessment year 2007-08 is dated 3.2.2016. It is not known whether the Revenue has filed any appeal before this Tribunal against the order of the CIT(A) for assessment year 2007-08. However, for the sake of consistency, this Tribunal is of the considered opinion that the DRP has rightly directed the Assessing Officer to consider CBDT Circular No.1 of 2013 and adjudicate the claim of the assessee u/s 10A of the Act. Transfer pricing adjustment - assessee submitted assessee-company do not have any controlling interest in respect of the so called concern with which the assessee entered into international transaction - Held that:- This Tribunal is of the considered opinion that since the assessee claims to have less than 26% interest in the Associated Enterprise and not holding any controlling interest in the management and finance, the matter needs to be reexamined by the Assessing Officer. In other words, whether the non-resident company to which the assessee has transaction is an Associated Enterprise within the parameters of law needs to be examined. Since such an exercise was not done either by the TPO or DRP, this Tribunal is of the considered opinion that the matter needs to be reexamined. Accordingly, the orders of the lower authorities are set aside and the entire issue is remitted back to the file of the Assessing Officer. The Assessing Officer shall reexamine the issue afresh after referring the matter once again to the TPO and thereafter decide the same in accordance with law after giving a reasonable opportunity to the assessee. Domestic transaction entered into by one of the comparable company viz. Dun & Bradstreet Information Services India Pvt. Ltd (DB India) - Held that:- As rightly submitted by the ld. Counsel and the ld. DR, when transfer pricing adjustments were made in respect of the international transaction, the domestic transaction has to be excluded. However, the matter needs to be verified whether DB India has any transaction in the domestic market as claimed by the assessee. Since nobody has examined the transaction of DB India with its non- Associated Enterprise, this Tribunal is of the considered opinion that the matter needs to be reexamined as claimed by the ld. DR. Accordingly, the orders of the lower authorities are set aside and the issue with regard to transfer pricing adjustment is remitted back to the file of the Assessing Officer. Reimbursement in the cost and revenue base while computing the entity level margins and also TDS credit - Held that:- This Tribunal is of the considered opinion that when the tax was deducted, credit shall be given while computing the tax liability of the assessee. Therefore, the Assessing Officer shall verify the TDS credit in respect of the assessee and give necessary credit while determining the tax liability of the assessee.
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