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2017 (2) TMI 650 - AT - Income Tax
Transfer pricing adjustment - addition to AMP expenses - Held that:- Considering the material facts like the absence of an agreement, arrangement or understanding between the appellant and its associated enterprise for sharing the advertisement, marketing and promotion expenses or for incurring the advertisement, marketing and promotion expenses for the sole benefit of the associated enterprise, payments made by the appellant under the head "advertisement, marketing and promotion" to the domestic parties cannot be termed as an "international trans action" specifically when the learned Transfer Pricing Officer has not been able to prove that the expenses incurred were not for the business carried out by the appellant in India. We are thus of the opinion that the Transfer Pricing Officer had wrongly invoked the provisions of Chapter X of the Act for the said advertisement, marketing and promotion spent. The addition is, therefore, directed to be deleted. - Decided in favour of assessee.
Adjustment on account of notional interest attributable to the delayed payments receivable from the associated enterprise - Held that:- Undisputedly, in the present case the benchmarking of the main international transactions applying the transactional net margin method has been accepted by the Transfer Pricing Officer. Considering this, we find that the ratio laid down by the Mumbai Income-tax Appellate Tribunal in Rusabh Diamonds' case [2016 (4) TMI 400 - ITAT MUMBAI] is clearly applicable to the facts of instant case as held No ALP adjustments can be made, on the facts of this case, in respect of delay in realization of sale proceeds. The amendment in Section 92B, at least to the extent it dealt with the question of issuance of corporate guarantees, is effective from 1st April 2012. The assessment year before us being an assessment year prior to that date, the amended provisions of Section 92 B have no application in the matter. - Decided in favour of assessee.
Disallowance of deduction under section 10A - Held that:- Dispute Resolution Panel's action in enhancing the total income in the assessment year 2009-10 and disallowing the claim for deduction under section 10A in the instant case is contrary to the decision of the honourable jurisdictional High Court of Delhi in the case of CIT v. Neo Poly Pack (P.) Ltd [2000 (4) TMI 26 - DELHI High Court ]. Even otherwise on the merits we are unable to sustain the view adopted by the learned Dispute Resolution Panel. The learned authorised representative is justified in submitting that the learned Dispute Resolution Panel has written factually incorrect findings in its order. Moreover, the details, filed by the appellant have also been partially taken into consideration. The learned Dispute Resolution Panel takes note of top 25 employees but omits to take into consideration crucial fact that the director of the appellant-company, Shri Ankur Bhatia, is a software engineer with 16 years of experience. Moreover, the division-wise break up of the total employees strength has also partially been reproduced by the learned Dispute Resolution Panel in its order. We direct the Assessing Officer to allow the claimed deduction under section 10A of the Income-tax Act, 1961, on unit II of the appellant.- Decided in favour of assessee.