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2019 (2) TMI 1962 - AT - Income TaxTP Adjustment - Disallowance of royalty paid by the assessee to its Holding Company - appellant company had entered into technical knowhow agreement with its Holding Company for every model of the car manufactured and the appellant company paid royalty of 5% on the domestic sales and 8% on export sales - as argued TPO /DRP were not justified in holding that the royalty payment should be bench marked separately. It was contended that the appellants “whole entity” approach of bench marking royalty payments along with all other transactions by adopting TNM method at the entity level is justifiable - HELD THAT:- As relying on assessee own case [2015 (9) TMI 962 - ITAT CHENNAI] we hold that the average royalty payment up to the rate of 4.7% on the sales is justified. Since the assesse claims that the average royalty paid is 3.64% , we hold that the Revenue is not justified in making the impugned adjustments and hence direct to delete the additions. The corresponding grounds of appeal are treated as allowed. Capital subsidy - HELD THAT:- Since this issue is decided in the assessee’s favour by the AO in the earlier assessment year , the corresponding grounds are allowed.
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