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2018 (6) TMI 751 - AT - Income TaxTPA - International Transaction - Corporate guarantee provided by assessee company to it’s A.Es - Held that:- CIT(A) has relied upon the judgement in assessee’s own case DR. REDDY’S LABORATORIES LIMITED VERSUS ADDL. COMMISSIONER OF INCOME TAX, CIRCLE-1 (2) , HYDERABAD AND VICE-VERSA [2017 (5) TMI 529 - ITAT HYDERABAD] it is held that assessee having not incurred any costs in providing corporate guarantee it would not constitute “International Transaction” within the meaning of Section 92B of the Act and consequently, ALP adjustment is not warranted on this aspect - since assessee has not incurred any cost to provide such guarantee and therefore it will not have any impact on profits or costs of the assessee - hence the order of the Ld. CIT(A) does not call for any interference - thus the appeal of revenue is rejected. Expenditure incurred towards ESOPs - whether an ascertained liability and hence revenue expenditure? - Held that:- CIT(A) observed that identical issue was considered in the assessee’s own case for the earlier years (AYs 2006-07 to 2008-09) [2015 (3) TMI 983 - ITAT HYDERABAD ] wherein it was held that the difference between the price of shares and their issuance price should be treated as an expenditure in the hands of the assessee - thus it is an ascertained liability and therefore treated as revenue expenditure allowable u/s 37(1) - hence order passed by the Ld. CIT(A) does not call for any interference since - appeal of revenue is rejected. Determination of ALP in respect of loans given to its Associated Enterprises - Held that:- CIT(A) concluded that LIBOR provides the basis for price and interest rates of all kinds of financial products like interest swaps, interest futures, savings account and mortgages - thus he accordingly held that LIBOR should be taken as bench-mark for charging interest - Following the decision of the ITAT in the assessee’s own case, A.O. was directed to adopt the LIBOR rate applicable for the years under consideration + 200 basis points to arrive at the ALP - hence we uphold the order of the Ld. CIT(A) and reject the ground of assessee. Allowable deduction u/s 37 (1) - expenses incurred towards travel, stay etc., in the public conferences attended by the Doctors is to improve the knowledge of the Doctors on the latest developments - Held that:- view taken in the assessee’s own case in the earlier years, we hereby direct the Assessing Officer to verify the nature of expenditure and disallow only such expenditure which was not incurred for the purpose of business of the assessee. Deduction u/s 80-IC - Allocation of corporate overheads expenses - Held that:- The corporate overheads should be allocated amongst all the units based on turnover of respective units but while allocating the expenditure only net expenditure should be allocated on the basis of turnover. A.O. is directed to re-consider the matter in line with the view taken by us in the assessee’s own case for the earlier years. Tax Authorities were not justified in allocating R & D expenditure and ESOP cost against the profits of other eligible units wherein assessee claimed deduction u/s 80IC of the Act. See ZANDU PHARMACEUTICALS WORKS LIMITED VERSUS. THE COMMISSIONER OF INCOME TAX [2012 (9) TMI 620 - BOMBAY HIGH COURT]
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