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2021 (1) TMI 1290 - AT - Income TaxTP Adjustment - Comparable selection - inclusion of CTR Manufacturing Industries Ltd. - HELD THAT:- As assessee has shown the revenue operations up to 60% to 70% from the sale of capacitors and resistors whereas there was no segmental information about manufacturing as well as sale of capacitors and resistors in the annual statement of CTR Manufacturing Industries Ltd. Therefore, in our view CTR Manufacturing Industries Ltd. cannot be a comparable to that of assessee. Hence, it should be excluded from the comparables. Therefore, we direct the AO to exclude the CTR Manufacturing Industries Ltd. from the final list of comparables in the category of manufacturing segments. I.T. Enabled Services/Back Office Support Services Segment - Comparability of certain companies in the Back Office Support Segment, this Tribunal remanded the matter to the file of AO/TPO to ascertain the precise nature of services rendered by the assessee under ITES and to examine the comparability or otherwise of the companies challenged in this segment in A.Y. 2010-11.In the light of the above, the AO is directed to ascertain the nature of services rendered by the assessee and examine the comparability of the companies indicated therein. Accordingly, this issue is remanded the file of AO/TPO for fresh examination. The assessee is liberty to file evidences, if any, in support of its claim. TDS u/s 195 - Disallowance u/s. 40(a)(i) - assessee for convenience Vishay India hereafter paid an amount to its Associated Enterprise (AE) i.e. Vishay Intertechnology Asia Pte Ltd., Singapore - HELD THAT:- Tribunal in assessee’s own case for A.Y. 2012-13 [2019 (9) TMI 1683 - ITAT PUNE] wherein the issue on hand discussed by this Tribunal, wherein we note that the assessee availed similar services from its holding company in USA for which the Vishay Singapore paid the said amount on behalf of other entities situated worldwide and charged without no markup from the assessee as well as from other entities. No disallowance was made in this regard by the respondent authorities in the earlier years. The Tribunal examined the final assessment orders/TPO’s orders of earlier years along with the necessary documentation filed by the assessee therein and held the reimbursement of expenses for leaseline are not in the realm of royalty and section 9 of the Act or Article 12 of DTAA is attracted. The Tribunal further placed reliance in the case of John Deere India Pvt. Ltd[2019 (3) TMI 458 - ITAT PUNE]wherein the similar issue was raised and held that the payment made for such leaseline charges was not royalty under DTAA and no obligation to deduct tax at source. Thus the disallowance as confirmed by the AO in accordance with the directions of DRP is not justified and accordingly, deleted. Thus, the assessee ground succeeds and it is allowed.
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