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2018 (1) TMI 728 - AT - Income TaxTPA - upward adjustment under the head writing off of obsolete stock - Held that:- We do not find any reason, in the order of the AO/TPO, for not allowing write off of obsolete stock for this year. In other words, they have made addition without mentioning the new facts that had come to their notice while completing the assessment of the year under appeal and which were different form earlier AY's. CUP was not the method to determine the ALP of the disputed transaction. Lastly, we hold that destroying the obsolete stock after writing it off was an extra ordinary event. Thus we are of the opinion that the DRP was not justified in confirming the order of the TPO who had made upward adjustment under the head writing off of obsolete stock. GOA-2 is decided in favour of the assessee. Provision of market information services(MIS) provided to the AE - Held that:- TPO had held that the assessee was providing information to its AE, that it was not being compensated for such services, that he referred to the clause 11 of the DA in his support to hold that it was duty bound to provide MIS on quarterly basis, that he estimated the ALP of the said activity at 2% of the total turnover of the assessee, that the DRP reduced it to 0. 5%. In our opinion there is nothing in the DA that leads to the conclusion that the assessee was required to furnish MIS to its AE. Even if , for the sake of argument it is accepted, then the AO/DRP had not followed the valid procedure for making the adjustment. As per the provisions of chapter X of the Act, the departmental authorities are required to follow one of the methods as envisaged by Rule 10 of the Rules. They cannot make ad-hoc disallowance. While making assessment under other sections of the Act ad hoc disallowance can be made e. g. rate of GP or expenses incurred for personal use of the partners etc. But, under section 92 it is not possible. See Kodak India Pvt. Ltd. case [2016 (7) TMI 677 - BOMBAY HIGH COURT] - Decided in favour of the assessee
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