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2022 (4) TMI 1443 - AT - Income TaxTP Adjustment - MAM selection - adjustment made to the royalty as independent international transaction by using PSM as the most appropriate method - HELD THAT:- There is no dispute that, factual metrics and background our identical and the nature of payment having considered identically by the revenue authorities in both these cases. We are therefore respectfully following the view taken by coordinate bench of this tribunal in case of Toyota Kirloskar [2015 (1) TMI 921 - ITAT BANGALORE] we are of the view that TNM Method is the Most Appropriate Method and the Ld. AO/TPO is directed to apply the said method in determining the ALP, after affording opportunity of being heard to the assessee. TDS u/s 195 - Disallowance of reimbursement of salary or seconded employees on account of non-deduction of tax at source - HELD THAT:- Respectfully following the above views expressed in DIT vs. Abbey Business Services India (P.) Ltd. [2020 (12) TMI 570 - KARNATAKA HIGH COURT], Hon'ble AAR in Cholamandalam MS General Insurance Co. Ltd. [2009 (1) TMI 19 - AUTHORITY FOR ADVANCE RULINGS], Hon'ble Bombay High Court in case of Marks & Spencer Reliance India Pvt. Ltd. [2017 (5) TMI 1638 - BOMBAY HIGH COURT] Hon'ble Delhi High Court in the case of DIT Vs. HCL Infosystems Ltd. [2004 (1) TMI 16 - DELHI HIGH COURT] Coordinate bench of this Tribunal in case of IDS Software Solutions [2009 (1) TMI 363 - ITAT BANGALORE-A], Hon'ble Pune Tribunal in case of M/s. Faurecia Automative Holding [2019 (7) TMI 402 - ITAT PUNE], Hon'ble Ahmedabad Tribunal in the case of Burt Hill Designs (P) Ltd. [2017 (3) TMI 1515 - ITAT AHMEDABAD], we are of the view that the reimbursement made by the assessee in India to Toyota Corporation, Japan, towards the seconded employees cannot be regarded as "Fee For technical Services" and therefore not taxable u/s. 195 of the Act. We therefore direct the Ld. AO to delete the disallowance made u/s. 40(a)(i) of the Act. Nature of expenditure - treatment of payment towards plant layout charges - revenue or capital expenditure - HELD THAT:- We note that the alleged expenditure has been claimed as plant layout charges to improve utilisation of resources, besides improvement in quality and safety. The Ld. AR however alternatively prayed that, in the event the said expenditure is upheld to be capitalised, depreciation may be granted. We note that the assessee has not provided any details in respect of the expenditure incurred towards layout of plant, and why was it necessary to be incurred. In our view this issue needs to be revisited based on the evidences filed by the assessee having regard to the principles laid down by Hon'ble Supreme Court in case of Ballimal Naval Kishore & Anr [1997 (1) TMI 3 - SUPREME COURT] of DRP order. Accordingly, we direct the assessee to file all relevant details in support of the claim which would be verified by the AO in accordance with law.
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