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2017 (4) TMI 463 - AT - Income TaxAddition in respect of apportionment of interest on working capital, factory overhead and director’s remuneration to 10B unit - CIT(A) deleted addition on the ground that the assesseecompany had maintained separate books of account in respect of 10B unit and non-10B unit and without pointing any discrepancies in the books of account maintained, the AO was not justified in apportioning the above expenditure to 10B unit - Held that:- AO had not found any defects in the books of account nor had he rejected the books of account. It is neither the case of the AO that any of the expenses was not properly allocated to 10B units nor was the case of the AO that the expenditure, which is incurred exclusively for 10B unit was not claimed as a deduction. The AO merely proceeded on surmises and conjecture to make addition which is not permissible under law and therefore, we do not find any reason to interfere with the finding of the CIT(A). Hence, the appeal of the revenue is dismissed. Addition in respect of apportionment of salary expenditure to 10B unit - Held that:- AO has a strong basis to infer that there has been overlapping of functions of the employees between the two units. Thus we see no reason to interfere in his action in reallocating expenses within the meaning of section 145(3) of the Act. - Decided against assessee Addition in respect of ALP in respect of receivables due from AEs - Held that:- TPO made adjustment on account of notional interest for non-realization of its dues. There is no dispute that the transaction in question is not an independent transaction. It is an integral part of transaction of sale made to AE and therefore, it has to be considered along with main transaction. It is only w.e.f. assessment year 2012-13 amendment to section 92A was brought in the statute book. Since amendment is not applicable to the assessment year under consideration, law laid down by several co-ordinate benches like Goldstar Jewellery Ltd. vs. JCIT (2015 (2) TMI 58 - ITAT MUMBAI) is applicable wherein held that there can be no separate international transaction of 'interest' in the international transaction of sale. Early or late realization of sale proceeds is only incidental to transaction of sale, but not a "separate transaction in nature. The impugned transaction of interest on delayed realization of sale proceeds is not international transaction. - Decided in favour of assessee
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