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2018 (11) TMI 1822 - AT - Income TaxAddition on account of excess profit adjustment under section 10AA(9) read with section 80IA(10) - As argued transactions with the Associated Enterprise have not been arranged to produce more than ordinary profits with the intent to abuse tax incentive - HELD THAT:- In assessee’s own case for A.Y. 2011- 12 [2017 (11) TMI 1933 - ITAT PUNE] held that the excess profits should be considered on the basis of difference of 16.34% and 20% as against 16.34% and 28% held by AO. In the present case, the Assessing Officer has not proved that any arrangement had been arrived between the parties which resulted in higher profits. Consequently, the re-working of the profits by Assessing Officer by invoking section 10A r.w.s. 80- IA(10) of the Act is not justified - AO was not justified in working out the excess profit on the basis of presumptions and reducing the claim of deduction of assessee u/s 10AA of the Act. We therefore set aside the action of the AO. Thus, the ground of the assessee is allowed and the Revenue is dismissed. Disallowance of expenditure in respect of RSA token expenses - revenue or capital expenditure - HELD THAT:- Expenditure incurred on RSA tokens is for the purpose of business operations and for conducting the business in an efficient manner. In such a situation, we are of the view that the expense is a revenue expenditure and therefore, the AO was not justified in disallowing RSA token expenses. We accordingly hold that the RSA token expense to be of revenue in nature and direct the AO to allow the expenditure. We further direct the AO to take into consideration the depreciation already granted while allowing the claim of RSA token expenses. Thus, the ground No.2 of the assessee is allowed.
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