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2018 (7) TMI 2327 - AT - Income TaxTP Adjustment - MAM selection - determination of arm’s length price of international transaction - HELD THAT:- Since there is no factual and functional difference in the activities of assessee for the year under consideration as compared to the Previous Year, respectfully following the above observation of Co-Ordinate Bench in assessee’s own case for A.Y.2009-10 we direct Ld.TPO to benchmark international transactions by using TNMM as most appropriate method at entity level. Provision for service tax on rent expenses in the books of accounts - AO treated the entire amount as an unascertained liability and disallowed it - HELD THAT:- Considering the legal position of applicability of service tax on rental income, the liability to collect and deposit service tax on rent income was on the landlord which was in dispute before Hon’ble High Courts for a considerable period of time. It is an admitted position that assessee has made payment as per invoice raised by landlord in Assessment Year under consideration for Gurgaon premises whereas insofar as the Bangalore premises are concerned no payment was made as the invoice was not released. We therefore direct Ld.A.O, to verify if service tax liability towards Bangalore premises has been made by assessee as subsequently the law was absolutely clear and the burden was cast upon the landlord to mandatorily collect service tax, to be deposited with Government. Assessee is directed to provide all the bills/invoices raised by the landlord in respect of both the premises and A.O. is directed to verify actual payment made and to allow as per law. This ground raised by assessee stands allowed for statistical purposes. Nature of expenses - disallowance of service tax considering it as prior period expenses - HELD THAT:- . On perusal of order passed by Service Tax Department party has claimed a rebate which is not corresponding with the amount of service tax and cess paid by the party during the material period. As the party has not submitted copies of ST-3 returns of the relevant period, it is not a certain double how the duty element, rebate of which is claimed has been discharged by the party. We therefore direct Ld.AO to verify the actual amount paid by assessee and accordingly allow the claim. TDS credit denied - since assessee has not offered income to tax, it was not eligible for credit of TDS - HELD THAT:- As AR submitted that customers of assessee had duly deducted and deposited taxes while making payment to assessee, which is why it is reflected in the form 26 AS of assessee. We direct Ld. AO to verify the claim of TDS credit and allow as per law. Working capital adjustment - HELD THAT:- As there is no difference in the FAR analysis as well as the factual matrix for year under consideration vis-a-vis Assessment Year 2009-10, we do not find any infirmity in granting working capital adjustment of tested party and comparables, provided the necessary details/data have been provided by assessee.
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