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2016 (4) TMI 1361 - AT - Income TaxTP adjustment in relation to the international transaction of ‘Payment of export commission’ - ALP determination - HELD THAT:- As per the ratio decidendi in Cushman & Wakefield India 2014 (5) TMI 897 - DELHI HIGH COURT TPO was required to simply determine the ALP of the international transaction of `Payment of export commission’ unconcerned with the fact, if any benefit accrued to the assessee and thereafter, it was for the AO to decide the deductibility of this amount u/s 37(1). As the TPO in the instant case initially determined Nil ALP by holding that no benefit accrued to the assessee and the AO made the addition without examining the applicability of section 37(1), we find the actions of the AO/TPO running in contradiction to the ratio laid down in Cushman & Wakefield (supra). Respectfully following the precedent, we set aside the impugned order and remit the matter to the file of AO/TPO for deciding this issue in conformity with the law laid down above. TPA from the international transaction of ‘Payment of royalty for exports to AEs’ - HELD THAT:- We are not able to appreciate the view point of the TPO in allowing royalty payment in respect of goods sold to non-AEs and disallowing the same in respect of sales to AEs. Accepting royalty payment to AE in respect of sales to non-AEs goes to show that the ALP of royalty payment stood accepted by the Revenue. Nil ALP has been determined only of the royalty paid in respect of exports made to AEs. Royalty is payable on the basis of manufacturing of goods and not on the sales made. As the rate of royalty paid in respect of exports to AEs is equal to that in respect of sales to non-AEs, which has been accepted by the TPO at ALP, we fail to see as to how royalty paid in respect of exports to AEs is not at ALP - Tribunal has consistently deleted the addition in respect of royalty payment by considering the same to be at ALP, we are disinclined to accept the stand of the ld. DR for restoring the matter to the file of AO/TPO for a fresh determination of the ALP of this international transaction. This issue is decided in the assessee’s favour. Grant of depreciation u/s 32 on Moulds used for plastic components - @ 15% OR 30% claimed by the assessee - HELD THAT:- AO reduced the depreciation rate on plastic moulds by following the view taken by him in the preceding years. Neither the ld. AR nor the ld. DR could specifically point out the fate of such addition in the earlier years, inasmuch as whether the assessee accepted such addition or if assailed, then the final view taken by the Tribunal in the preceding years on this issue. Similar issue, when came up for consideration before the tribunal for the AY 2006-07, it restored the matter to the AO for deciding this issue afresh after ascertaining the necessary facts. As there is still no clarity on this issue, we deem it fit to follow the view taken by the tribunal for the A.Y. 2006-07. Resultantly, we set aside the impugned order on this issue and remit the matter to the file of AO for deciding the matter afresh.
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