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2018 (4) TMI 1709 - HC - Income TaxTP Adjustment - MAM selection - As submitted that the assessee company renders support services and the findings of the TPO and DRP with respect to its controlling critical functions in regard to the merchandising, fabric sourcing, product integrity, quality assurance etc. meant that there was significant differences in the international transactions as opposed to those by the assessee in the case of Li and Fung India Pvt. Ltd. [2014 (1) TMI 501 - DELHI HIGH COURT] - HELD THAT:- This Court is of the opinion that on this aspect question of law does not arise. The findings of the ITAT with respect to the functional similarity, indeed identity, between the assessee in the case of Li and Fung India Pvt. Ltd. (supra) and the assessee in the present case, is clear. The assessee, like in the case of Li and Fung India Pvt. Ltd. (supra), did not assume any risk and was dependent entirely for reimbursement of its expenses by the associated enterprises (‘AEs’) and was entitled to the annual and identical markup of 5% over the annual expenditure. Having regard to these facts, the Court is of the opinion that the application of the rule in Li and Fung India Pvt. Ltd. (supra) was appropriate and therefore this question of law does not arise. Nature of expenses - revenue or capital expenditure - HELD THAT:- Appeal admitted on:- “(1) Whether the ITAT erred in deleting the addition of ₹ 1,75,16,800/- made by the Assessing officer on account of Rent Expenses ignoring the fact that the same is capital expenditure in connection with business activities?”
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