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2015 (12) TMI 1800 - AT - Income TaxTransfer pricing adjustment - payment for business services to the AE’s - As per the Form 3 CEB, the payment was in respect of services rendered by the AE’s to the assessee vide Business services Agreement at Cost Plus 7% mark-up based on the group’s transfer pricing policy - HELD THAT:- 6 Given that there is no change in the facts and circumstances of the case, respectfully following the decision of the Coordinate Bench in assessee own case that A.Y 2007-08 . [2015 (9) TMI 19 - ITAT JAIPUR] , adjustment u/s 93C(3) of the Act in respect of payment for business services to AEs of the assessee is deleted. Hence the ground No.1 of the assessee is allowed. Disallowance of restructuring expenses - revenue or capital expenditure - as per AO these are one time expenditure which resulted in enduring benefit to the assessee, hence the same are in nature of capital expenditure and cannot be allowed as revenue expenditure - HELD THAT:- As decided in assessee;s own case merely because expenditure results in some enduring benefit is not alone decisive of its being capital in nature. If the same increases the revenue generating apparatus then it will fall in the category of revenue expenditure despite giving enduring benefit - Merely because once for all payment is made it does not ipso facto amount to capital expenditure. Assessee incurred these expenses for shifting of Corporate office from Gurgaon to Mumbai wholly and exclusively for its business. Besides, Hon’ble High Court gave the permission for charging of these expenses against amalgamation reserves. In assessment year 2006-07, similar expenditure were allowed by the AO in assessment framed u/s 143(3) after considering the details as such expenditure reflected in the notes to the accounts. Thus assessee’s claim falls in the category of revenue expenses and deserves to be allowed. Disallowance of advertisement expenses - whether the assessee has done TDS on the said expenditure or not ? - HELD THAT:- authorities need to taken into consideration the fact that the assessee as in the instant case which have diversed operations and transactions running into thousands crores, it is practically impossible to get each and every expenditure, verified which has been incurred during the year. The authorities should taken into consideration the fact that the books have been statutorily audited under the requirements of the Company Law followed by the tax audit as per I.T. Act which should be taken into consideration and due weightage should be given. Further it is noted that the assessee has submitted complete party-wise detail chart on which TDS is deducted. Further detailed explanation on advertisement expenses and sample invoices were also filed vide letter dated 19.12.2011 which has apparently missed the attention of the AO. In light of that, we are of the considered view that there is no basis for disallowance of advertisement expenses on purely adhoc basis, hence the said addition is deleted. Disallowance on account of write off inventories - HELD THAT:- It is noted that the assesee has given details about the inventory write off alongwith the ledger codes whereby the identified items of inventory are written off in the books of accounts. Further it is noted that there is no change in the accounting policy which has been followed by the assessee in respect of inventory write off as compared to earlier years. Thus addition made by the AO on account of inventories write off is deleted Disallowance of Travelling and Conveyance expenses - HELD THAT:- The disallowance of travelling and conveyance expenses to the extent of 10% of the total expenditure is clearly on adhoc basis as confirmed by the ld. CIT(A). We see no infirmity in the order of the ld. CIT(A) who has deleted the said disallowances. Disallowance on account of misc. expenses - Ad hoc addition - HELD THAT:- The disallowance of Misc. expenses to the extent of 10% of the total expenditure is clearly on adhoc basis as confirmed by the ld. CIT(A). We see no infirmity in the order of the ld. CIT(A) who has deleted the said disallowances.
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