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2018 (3) TMI 1794 - AT - Income TaxDeduction on account of provision for warranty - HELD THAT:- As decided in own case [2017 (8) TMI 1565 - ITAT PUNE] the claim of the assessee on account of warranty provision is allowed by the Tribunal in assessee’s own case in the A.Y. 2003-04. Ld. Departmental Representative has not brought anything on record to controvert the above finding of the Tribunal. Therefore, we find that the order of CIT(A) is in tune with the decision of the Tribunal. Therefore, the decision of the CIT(A) given is fair and reasonable and it does not call for any interference. Accordingly, Ground raised by the Revenue is dismissed. Disallowance of claim of bad debts written - HELD THAT:- No distinguishable facts have been brought to our notice by Revenue in assessment year under appeal as compared earlier year 2010-11 . It is not the case of Revenue that the assessee has not written off bad debts in the books of account. Thus, in view of the law laid down by the Hon’ble Apex Court in the case of TRF Ltd. Vs. Commissioner of Income Tax [2010 (2) TMI 211 - SUPREME COURT] and the facts of case, ground No. 2 raised in the appeal by assessee is allowed. Disallowance u/s. 40(a)(i) - contention of assessee is that the provisions of section 40(a)(i) have been invoked in the assessment year under appeal on the basis of amendment introduced by the Finance Act 2012 to section 9(1)(vi) by insertion of Explanations 5 and 6 to the section with retrospective effect from 01-06-1976 - HELD THAT:- No such disallowance can be made when at the relevant point of time the provisions were not in existence. AR has further submitted that the appeal of assessee arising out of proceeding u/s. 201 is pending before Commissioner of Income Tax (Appeals). The directions may be given to Assessing Officer to follow the order of Commissioner of Income Tax (Appeals) in aforesaid proceedings while making disallowance u/s. 40(a)(i) of the Act. In view of the prayer made by ld. AR, the ground No. 3 raised in appeal is remitted back to the Assessing Officer with a direction to recompute disallowance u/s. 40(a)(i) in line with outcome of appeal of assessee pending before the Commissioner of Income Tax (Appeals) in proceedings u/s. 201 of the Act. Accordingly, ground No. 3 raised in appeal by assessee is allowed for statistical purpose. Aggregation approach accepted by CIT (Appeals) - HELD THAT:- Taking into consideration the facts of the case, US transfer price regulations, guideline notes issued by ICAI and OECD transfer pricing guidelines passed a detailed order upholding the order of Commissioner of Income Tax (Appeals) and dismissed the grounds raised by Revenue in own case [2017 (9) TMI 1836 - ITAT PUNE] Accepting TNMM adopted by assessee for benchmarking its international transactions in Export packaging material segment - HELD THAT:- TPO accepted TNMM applied by assessee for benchmarking majority of international transactions with its AE. Only on small segment of packaging solutions the TPO disputed TNMM and applied CUP for benchmarking international transactions. Further, the TPO granted ad hoc adjustment of 5% for marketing functions and another ad hoc adjustment of 5% for royalty component without specifying the basis for granting such adjustments. Once, the TPO has accepted TNMM as the most appropriate method for benchmarking substantial section of international transactions, the TPO cannot dispute application of the most appropriate method in respect of marginal segment of same transaction. The Co-ordinate Bench of Tribunal in the case of Intervet India (P.) Ltd. Vs. Deputy Commissioner of Income Tax [2016 (7) TMI 20 - ITAT PUNE] rejected such approach of TPO in applying CUP for determining ALP on small segment of transaction.
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