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2016 (3) TMI 826 - AT - Income TaxTransfer pricing adjustment - MAM selected - whether RPM can be rejected as MAM? - Held that:- Before rejecting the RPM, TPO should have made an analysis to see whether the required data regarding the set of comparables dealing in similar products could be obtained from public data bases. Only if it can be shown that the adjustment specified in the above Rule was not possible, RPM can be rejected as MAM. In he present case assessee was selling kitchen and bath fittings, and whether there were other comparables in similar business sufficient enough to make a representative sample has not been verified by any of the lower authorities. The question whether RPM is the MAP depends on such an analysis. We are therefore of the opinion that the matter as to the selection of MAM and also the pricing of international transactions of the assessee with regard to its distribution segment requires a fresh look by the TPO / AO. We set aside the orders of authorities below and remit the issue back to the file of TPO / AO for consideration afresh Warranty disallowed - Held that:- While it is true that assessee had a present obligation on account of warranty resulting out of its sales and it was also probable that there could be an outflow of resources for settling such obligation, the third condition, viz., making of a reliable estimate has not been done by the assessee. In our opinion, unless and until scientific data is produced by an assessee in support of the estimate of warranty provisioning, an estimate cannot be presumed as a reliable one. Assessee having failed to do so, disallowance was rightly done by the lower authorities. We do not find any reason to interfere - Decided against assessee Expenditure paid to the Registrar of Companies for increasing authorised capital disallowed - Held that:- It is clear that once the type of expenditure mentioned under subsection (2) is incurred by an assessee, it shall be allowed a deduction as per sub-section (1) in the manner specified therein. Thus it is clear that AO when he had made disallowance of the share issue expenditure in the nature of fees paid to Registrar of Companies for increasing authorised capital, he ought to have allowed the amortisation of such expenditure u/s.35D(1) of the Act. DRP had accepted this claim of the assessee at para 10.2 of its order. We therefore direct the AO to grant amortisation of such expenditure to the assessee as specified u/s.35D of the Act
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