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2017 (5) TMI 1305 - ITAT DELHIDetermining the ALP of AMP expenses - Held that:- We set aside the impugned order and remit the matter to the file of TPO/AO for a fresh determination of the question as to whether there exists an international transaction of AMP expenses. If the existence of such an international transaction is not proved, the matter will end there and then, calling for no transfer pricing addition. If, on the other hand, the international transaction is found to be existing, then the TPO will determine the ALP of such an international transaction in the light of the relevant judicial position, after allowing a reasonable opportunity of being heard to the assessee. A bare perusal of the mandate of Rule 10B(1)(c) postulates under sub-clause (ii) that: “the amount of a normal gross profit mark-up to such costs,, in a comparable uncontrolled transaction… is determined.” Such gross profit mark-up of comparable uncontrolled transactions is adjusted under sub-clause (iii) to take into account the functional and other differences, if any, between the international transaction and the comparable uncontrolled transactions. Thus, it is vivid that it is the adjusted gross profit mark up of the comparables which is applied to the direct and indirect cost incurred by the assessee in respect of international transaction, for determining the ALP under Cost Plus Method and there is no mandate for considering the assessee’s own gross profit rate for this purpose. We, therefore, do not countenance the working done by the TPO in this regard. To sum up, the impugned order on this score is set aside and the matter is sent back to the TPO/AO for a fresh determination of the ALP of AMP expenses. - Decided in favour of assessee for statistical purposes. Denial of deduction u/s 80IC - quantification of income for the purpose of granting deduction u/s 80-IC - Held that:- The issue of quantification of deduction u/s 80IC has not attained finality in at least the immediately preceding three assessment years. In the absence of any decision on such issue for the earlier years, it is not possible to independently evaluate and examine the issue in the instant appeal. Under these circumstances, we set aside the impugned order on this score and remit the matter to the file of the Assessing Officer for a de novo determination of the amount eligible for deduction u/s 80IC of the Act. Needless to say, the assessee will be allowed a reasonable opportunity of hearing.- Decided in favour of assessee for statistical purposes.
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