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2016 (7) TMI 318 - AT - Income TaxTransfer pricing adjustment - adjudication of AMP expenditure - Held that:- In the year under consideration the FAA had not passed a speaking order.He has just confirmed the adjustment. In the next year the DRP has dealt with all the arguments raised by the assessee before the TPO and before the DRP itself. We find that except for the issue of non admission of additional evidences the assessee has advanced all most all the arguments while arguing the matter for the subsequent year. Therefore, we would like to adjudicate the AMP expenditure issue, while deciding the appeal for next AY. Adjustment under the head Corporate Guarantee Commission(CGC) - Held that:- Considering the entirety of facts and circumstances of the case and on the basis of the material available on record, we, therefore, proceed to uphold the rate of 0.50% for the purpose of determining the arm's length rate of the guarantee commission fee. In this view of the matter, we setaside the order of CIT(Appeals) and direct the Assessing Officer to determine the addition in view of our aforesaid direction Disallowance on claim of depreciation on printers data, cable router and scanner - Held that:- Identical issue was decided by the Tribunal while deciding the appeal in A.Y. 2008-09 it is hereby directed that Assessing Officer shall allow depreciation @ 60% Disallowance of claim of depreciation on Jodhpur property - Held that:- Tribunal had decided the above issue against the assessee while adjudicating the appeal for AY 2008-09 Disallowance made u/s. 14A - Held that:- AR stated that assessee had made strategic investments, that it had sufficient own funds, that FAA had not admitted the additional grounds. DR left the issue to the discretion of the Bench. After considering the available material we are of the opinion that in the interest of justice matter should be restored back to the file of FAA for fresh adjudication. He is directed to afford a reasonable opportunity of hearing to the assessee Adjustment in relation to the travel related segment - Held that:- We hold that the TPO had wrongly rejected the comparables. Considering the peculiar facts and circumstances of the case, we hold that the TP adjustment made by the TPO and confirmed by the DRP has to be deleted. First effective ground of appeal is decided in favour of the assessee. TP adjustment under the head AMP expenses - Held that:- The factors like payment under the head AMP expenditure to the third independent parties, promoting own business interest by way of AMP expenses take away the alleged ‘internationality’ of the transact - tion. In absence of any direct or direct evidence of incurring of AMP expenses by the assessee for the benefit of the AE or on behalf of the AE, it is has to be held that the transaction in dispute is not covered by the provisions of section 92B or 92B(1)of the Act and hence is not an IT. Once it goes out of the ambit of being an IT, FAR analysis of comparables or any other adjustment will and cannot come in picture. Folk wisdom of rural India the says that mother(Maa)is must for existence of her sister(Mausi). Similarly the existence of an IT is the pre-requisite of applying the provisions of chapter X of the Act. The assessee from the very beginning was arguing that it is not an IT, but, the TPO and the DRP did not deal with the core issue. In these circumstances, we are of the opinion that the matter should not be remitted back to the file of the TPO/ AO. Litigation has to be put to an end at some stage. Judicial time of every authority, including the TPO/DRP, is very precious and it should not be wasted for dealing with mere academic arguments. The recourse of remanding of matters/issue to the AO.s has to resorted rarely and selectively. In the case before us, no reasonable cause has been shown to justify the setting aside the issue. Thus where the existence of an international transaction involving AMP expense with an ascertainable price is- unable to be shown to exist, even if such price is nil, Chapter X provisions cannot be invoked to undertake a TP adjustment exercise. Thus merely because there is an incidental benefit to the foreign AE, it cannot be said that the AMP expenses incurred by the Indian entity was for promoting the brand of the foreign AE Adjustment in relation to insurance cost - Held that:- As decided in assessee's own case in AY 2005-06 it is a fact that the assessee has not charged from AE. Further, it is also equally true that AE charges counting fees also on the transactions of the assessee. If both are taken into account quantitatively, it is the claim of the assessee that the assessee will put to losses and the same is not accounted by the income fact of figures. These kind of accounting issues are outside the scope of TP principles. The discontinuance of earlier arrangement of not paying any counting fees to it's AE at Mauritius and also foregoing the corresponding service / incentive fees, does not erode the tax base if one keeps in mind the ratio of such receipts and payment made which is tilted in favour of the payment side. Moreover, the appellant has demonstrated by an Internal CUP (HSBC / Travelex) on this aspect to establish its case. The adjustment is therefore, deleted.
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