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2019 (10) TMI 1477 - AT - Income TaxTP adjustment in respect of receipt of Intra Group Services - HELD THAT:- Tribunal while deciding the issue of Intra Group services availed by the assessee had held that Transactional Net Margin Method was the most appropriate method to be applied for benchmarking the said services and had deleted the adjustment made in the hands of the assessee. The findings of the Tribunal in Assessment Year 2014-15 with regard to the aforesaid issue of the Tribunal. We are referring to the aforesaid findings of the Tribunal but for the sake of brevity, are not reproducing the same. The facts of the present case are identical to the facts in the earlier years and following the same parity and reasoning, we allow the claim of the assessee. Transfer pricing adjustment of payment of royalty - whether benefit test is to be applied or not, while benchmarking the payment of royalty? - HELD THAT:- The relevant findings of the Tribunal in this regard are reproduced in the order of the Tribunal relating to Assessment Year 2014-15 which are being referred, but not being reproduced for the sake of brevity. The Tribunal further noted that though the benefit test could not be applied to determine the Arm's Length Price of International Transaction but the matter was restored back to the Assessing Officer/TPO to examine as to whether the payment was based on the agreement and the same adheres to arms length price or not. Following the same parity and reasoning, we hold that the benefit tax could not be applied in the hands of the assessee. However, we remit the issue back to the file of Assessing Officer/TPO to carry out the comparability analysis with direction to confront the assessee with benchmarking analysis adopted and the comparables applied and also to look into the comparables selected by the assessee and decide the issue in accordance with law, after allowing a reasonable opportunity of hearing to the assessee. Disallowance made on account of Circuit Accruals - HELD THAT:- Assessee following recognized method wherein the actual expenditure incurred against the accrual/provisions for the year is accounted for in the subsequent year. This approach adopted by the assessee in recognizing the provision of circuit accruals was not accepted by the Assessing Officer/ DRP on the ground that similar disallowance was made in the earlier years. We find that the Tribunal has consistently from Assessment Years 2009-10 to 2014-15 allowed the claim of the assessee in entirely. The relevant findings of the Tribunal in the Assessment Year 2014-15 which are being referred but not being reproduced for the sake of brevity. The assessee has also furnished evidence of the services provided in the subsequent year against the aforesaid accruals and in view thereof, we find no merit in the orders of the authorities below in making aforesaid disallowance in the hands of the assessee. Accrual are other than circuit accruals - HELD THAT:- The assessee was following systematic method of accounting from year to year and was creating year end accruals towards normal business expenditure and was debiting the expenditure when paid or reversed in the subsequent years. The said details were furnished before the authorities below and the AR for the assessee has also referred to them before us. The Tribunal in Assessment Year 2014-15 relying on the orders of the Tribunal in the case of the assessee in earlier years had allowed the claim of the assessee vide paras of its order. Following the same parity of reasoning, we hold that the said expenditure is duly allowable in the hands of the assessee. Disallowance of support service expenses - HELD THAT:- The availment of the support services from the AE was through support services agreement. The assessee claims that the allocation of cost of ₹ 10.22 crores is to be allowed in its hands. In this regard, we find that the issue has also been decided by the Tribunal in assessee’s own case in earlier years and the Tribunal in Assessment Year 2014-15 had decided the said issue. While deciding the said issue, the Tribunal has remitted the same to the file of Assessing Officer with the direction to consider the evidences filed by the assessee of availment of support services from its AE. The AR for the assessee pointed out that all these evidences were duly filed before the authorities below. Following the same parity and reasoning as in Assessment Year 2014-15, we remit the issue back to the Assessing Officer to carry out the necessary verification exercise and decide the issue in accordance with our direction in the earlier years. We are relying on the findings of the Tribunal order vide page 16 to 18 and the same are not reproduced for the sake of brevity. Disallowance of annual revenue share based license fee - HELD THAT:- Hon’ble High Court in the case of CIT vs Bharti Hexacom Limited [2013 (12) TMI 1115 - DELHI HIGH COURT] wherein held that the Revenue share based license fee was an allowable revenue expenditure u/s 37(1) of the Act. Similar proposition is also being laid down by the Tribunal in assessee’s own case in Assessment Year 2014-15 under which are being referred but not being reproduced for the sake of brevity. Since the issue stands covered by the Jurisdictional High Court, we find no merit in the disallowance made in the hands of the assessee on this account. Hence, we direct the Assessing Officer to allow the claim of the assessee. TDS u/s 194I - Non -deduction of tax on lease line expenses - HELD THAT:- We hold that there was no requirement to deduct tax at source u/s 194I of the Act. Non-granting complete credit of taxes deducted at source - HELD THAT:- As assessee pointed out that even an application u/s 154 of the Act was pending before the Assessing Officer in this regard. We direct the Assessing Officer to allow credit of TDS in the hands of the assessee as per the available data. Thus, Ground No.8 raised by the assessee is allowed.
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