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2016 (9) TMI 1597 - AT - Income TaxDisallowance of royalty payment on export sales - assessee company paid royalty on export sales to one of its Associated Enterprise (“A.E."). the Gulf Oil International Mauritius (Inc.) (GOIL), as per agreement dated 01.08.2003 and the supplemental agreement dated 10.11.2003 - HELD THAT:- We find that this issue had arisen in the earlier assessment years and for the A.Y. 2006-07 [2014 (1) TMI 1899 - ITAT HYDERABAD] this is not a disallowance under section 37(1) but an adjustment made under Transfer Pricing Provisions where arms length price is to be determined, whether the agreement is approved or not. Keeping that in mind, we are of the opinion that the decision relied on by the learned Counsel, does not apply to the facts of the case. As decided earlier, the restriction on the royalty amount is limited to ₹ 44,24,184/-. Addition made on the ground that the said amount is paid to foreign concerns without making TDS - DRP has disposed of the objections of the assessee by observing that similar issue was there in the proceedings before the DRP for the Asst.Year 2010-11 and the learned DRP has favourably inclined with the arguments of the tax payer and directed the Assessing Officer to verify assessee's claim as to whether the amount was actually paid on behalf of Gulf Oil International Lubricants Pvt. Ltd. and allow assessee's claim accordingly - HELD THAT:- DRP has not applied its mind to the contentions of the assessee. Therefore, in the interest of justice, we deem it fit and proper to remit the issue to the file of the Assessing Officer with a direction to verify the assessee’s claim. Thus, grounds of appeal No.3 and 4 are treated as allowed for statistical purposes. Correct figure taken by the Assessing Officer towards carry forward of short term capital loss as against the correct amount of loss carried forward - HELD THAT:- We deem it fit and proper to remand this issue to the file of the Assessing Officer with a direction to give consequential effect in computation of the brought forward short term capital loss, pursuant to the loss arrived at in the earlier assessment years consequent to remand by the ITAT.
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