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2018 (4) TMI 1811 - ITAT MUMBAITP Adjustment in relation to manning fees - as per the assessee, if the reimbursement of expenses is considered while determining the arm’s length price of the international transaction, then the rate charged by the assessee which is in excess of the arm’s length rate adopted by the TPO - As canvassed even if one has to go by the manner in which benchmarking has been carried out by the TPO, even then the transactions of the assessee are at an arm‟s length price taking into consideration the amount of expenses reimbursed by the associated enterprise over and above the fixed rate of payment - HELD THAT: Finding of the Assessing Officer clearly supports the assertion of the assessee to the effect that the said expenses have been incurred by it in the course of providing the manning service to the associate enterprise, and the same have been recovered from the associate enterprise as reimbursements. We are only trying to highlight the fact that the said expenses are in relation to the “tested transaction‟ and therefore there is no justification in not considering them while computing the arm‟s length price. Plea of the Revenue before us, based on the observation of the CIT(A) that the expenses have not been shown in the Profit & Loss Account, and therefore, it cannot be taken into consideration, is to say the least, avoiding the obvious. Ostensibly, if such expenses were to be debited to the Profit & Loss Account, it would require simultaneous equivalent credit to the Profit & Loss Account on account of reimbursements. Ostensibly, if one is to determine the rate charged by the assessee from its associate enterprise per crew per month, it would entail taking into consideration the recoveries by way of reimbursements also; and, as the Tabulation reproduced by us earlier shows that once such recoveries are also factored into the rate charged from the associated enterprise, the rate comes to US$ 150.28 per crew per month and upon comparison with the rate of US$ 150 adopted by the TPO, the amount recovered by the assessee from the associate enterprise compares favourably, and, thus it would obviate the need for any further adjustment to the stated values in order to arrive at the arm‟s length price. We delete the addition made on account of transfer pricing adjustment of manning services as made by the Assessing Officer and sustained by the learned Commissioner (Appeals). The grounds raised are allowed to the extent indicated above. Disallowance of unabsorbed depreciation and loss - As submitted that the related issue arising in assessment year 2004–05 is yet to be decided as the appeal for the said assessment year is still pending - HELD THAT:- We are inclined to restore this issue to the Assessing Officer for granting consequential relief depending upon the ultimate outcome of assessee’s appeal on the issue in assessment year 2004–05. This ground is allowed for statistical purposes.
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