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2016 (5) TMI 1249 - AT - Income TaxTransfer pricing adjustment - best method for determining the value of developing the intangible property - Held that:- “Bright line test” would be the best method for determining the development of an intangible property. Advertisement expenses as an international transaction - Held that:- The concept of bright line test has to be applied in the case of the assessee for determining the ALP on advertisement expenses and accordingly remit back the matter to the file of the learned TPO for computing the ALP with respect to the advertisement expenses incurred by the assessee company on behalf of its holding company. Disallowance of royalty - Held that:- In the present case before us no arguments was advanced for justifying the stand of the assessee that during the relevant assessment year also the average rate of royalty on sales in the industry is more than 3.47%. In this situation, we do not find it necessary to interfere with the orders of the Revenue who had made elaborate finding in their respective orders that the average rate of royalty on sales prevalent during the relevant assessment year amongst the comparable companies is only 2.54%. Therefore, this ground raised by the assessee is decided against it. Disallowance of depreciation by reducing the cost of asset in lieu of the subsidy received from SIPCOT - Held that:- Authorized Representative submitted that the Tribunal on the earlier occasion on this identical matter has remitted the case back to the file of the learned DRP with certain directions. He therefore pleaded that for the relevant assessment year also the matter may be remitted back with similar directions. The learned Departmental Representative could not controvert to the submissions of the learned Authorized Representative. Addition on account of export incentives towards target plus scheme and focus market scheme - Held that:- Notional income computed by the assessee cannot be treated as taxable income of the assessee during the relevant assessment year; however the same shall be taxed in the relevant assessment year in which the assessee receives the license and derives such income. It is ordered accordingly. Additional depreciation on the assets deployed in the corporate office for office use - Held that:- Issue is covered by the earlier order of this Tribunal in assessee’s own case for the assessment year 2007-08 wherein held that the assessee is entitled to additional depreciation if it has satisfied the condition that it is engaged in the business of manufacture or production of any article or thing. There is no condition stipulated in the Act that additional depreciation shall be allowed only if the asset is deployed in the factory of the assessee and not the office of the assessee. Therefore, we accept the argument of the Ld. A.R. and reject the observations of the Revenue on this regard and accordingly direct the Ld. Assessing Officer to allow the claim of additional depreciation Disallowance of excess depreciation on UPS - Held that:- UPS forms part of data processing equipments and accordingly the assessee would be entitled for the claim of depreciation @ 60%
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