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2016 (5) TMI 969 - AT - Income TaxAddition of AMP expenses - TPA - Held that:- In the case under consideration, the AO/TPO has not brought anything on record that there existed and agreement, formal or informal, between the assessee and the AE to share/reimburse the AMP expenses incurred by the assessee in India. In absence of such an agreement the first and primary precondition of treating the transaction-in-question an IT remains unfulfilled. Conducting FAR analysis or adopting an appropriate method is the second stage of TP adjustments. The first thing is to find out whether the disputed transaction in is IT or not. Without crossing the first threshold second cannot be approached, as stated earlier. In the case under consideration, we are of the opinion that AMP expenditure is not an IT and therefore we are not inclined to restore back the issue to the file of the AO. Considering the facts and circumstances of the case under consideration, we are of the opinion that the FAA was not justified in upholding the order of the TPO. Therefore, reversing his order, we decide second ground in favour of the assessee. Disallowance of deduction in respect of payment for additional excise duty payable by third-party manufacturers - Held that:- provision made by the assessee for the amount payable to third party manufacturers/convertors on account of excise duty payable by them as per the agreement had not been crystallised or ascertained during the year under consideration as the sum was not paid by the third party manufacturers/convertors but was disputed by them, which dispute was not settled in the year under consideration. The said liability was a contingent liability and it was not while computing the business income of the assessee for the year under consdiration. In that view of the matter, we uphold the impugned order of the ld. CIT(A) confirming the disallowance made by the A. O. - Decided against assessee Disallowance of appreciation on marketing know-how (in pursuance of worldwide stock and asset purchase agreement entered into by Pfizer US and the parent company of the assessee) - Held that:- When the AO has accepted the payment in question for goodwill then in view of the judgment of the Hon’ble Supreme Court in the case of M/s SMIFS SECURITIES LTD (2012 (8) TMI 713 - SUPREME COURT ), the depreciation is allowable on the marketing knowhow Disallowance made u/s. 14A - Held that:- Disallowance should be restricted to 2% of the exempt income
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