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2019 (5) TMI 1719 - AT - Income TaxTP Adjustment - arm’s length price determination by AO with regard international transaction - rejection by DRP of the benchmarking report submitted by the assessee - HELD THAT:- TPO in this case has asked the assessee to submit benchmark analysis report done on the basis of royalty research database. The assessee could not provide the same when proceedings were going on before the TPO. The same could be provided only before DRP. Learned DRP asked for the remand report from the TPO. Learned TPO refused to offer any comment on the documents submitted by the assessee on the ground that the same was not submitted earlier before him. Despite this learned DRP accepted the additional evidence and proceeded to observe that the report was unauthenticated in as much as it was unsigned and did not contain seal of the reporting party. As gone through the copy of the said report submitted. We find that the said report is submitted by Altus International. It contains covering letter which contains full address and website address of the firm. Based on the report of Altus International, range of royalty rate is also mentioned in the covering letter. It has duly been signed by the partner of the firm. It also contains contact persons and phone number for any question regarding report. In these circumstances, in our considered opinion, rejection by DRP of the benchmarking report submitted by the assessee is not sustainable. If authorities below have any doubt about the authenticity of the document, same could have very well inquired from the address and phone number mentioned therein. Hence in our considered opinion, interest of justice demands that this issue may be remitted to the TPO. Non-allowance of depreciation on fixed asset - why claim of depreciation should not be allowed as business was not set up - HELD THAT:- Authorities below have erred in appreciating the facts of the case as being claimed by the assessee. Assessee’s claim is that machines were duly put to use during the year in a trial run. In the trial run prototype engines were duly manufactured and they were then sold for validation and testing. Sale of said prototype engine has been duly reflected in audited annual accounts as per details submitted above. In these circumstances, in our considered opinion, this issue needs to be remitted to the file of the AO to consider the issue afresh in the light of the assessee’s submission as above. Accordingly, issue stands remitted to the file of the Assessing Office. Appeal of the assessee stands allowed for statistical purposes.
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