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2017 (9) TMI 112 - ITAT DELHIAllocation of the expenses while determining the arm’s length price - allocation of expenses under the head manufacturing and other expenses in the profit and loss account to the trading segment and the addition on account of difference in the arm’s length price - Held that:- In the present case, it is an admitted fact that the allocation of the expenses while determining the arm’s length price also included some direct expenses e.g. depreciation, consumables and wages etc. which were related only to the manufacturing segment. So those expenses cannot be allocated to another segment i.e. trading segment. We, therefore, remand this issue back to the file of the TPO/AO for proper allocation and determining the arm’s length price. Accordingly, the directions given by the ld. DRP are modified to this extent that expenses which are directly related to the manufacturing activity are to be excluded from the list of the total expenses to be allocated to the trading segment on the basis of turnover ratio.
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