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2018 (11) TMI 598 - HC - Income TaxTPA - addition of overhead expenses @8.5% of the turnover is at Arm's Length Price - assessee could not produce evidence for service rendered as overhead expenses by the Joint Venture partners - ITAT deleted the addition - Held that:- The impugned order of the Tribunal examined the agreement entertained into between the JV partners and the assessee. It found that the agreement provides for overhead office expenses of the respective JV partners being allocated to the assessee to the extent of 8.5% of its turnover. Also the TPO has not benched mark the overhead office expenses debited to determine that it was in excess of comparable transactions. The impugned order on facts independently came to the same conclusion as the CIT(A) that the TPO was not correct in stating that the respondent had not furnished the details in support of his claim for allocation of overhead office expenses to the extent of 8.5%. This was found to be incorrect as the respondent assessee has furnished the Certificate of Auditors of the JV partners indicating its overhead charges. The impugned order further records the fact that for the earlier Assessment Years 2004-2005 and 2005-06 on identical facts, the TPO did not challenge the claim of overhead expenses of the respondent's JV being debited with a cap of 8.5% of the turnover of the assessee. The issue urged by the Revenue is essentially one of finding of facts on which both the CIT(A) and the Tribunal have upheld the assessee's stand - no substantial question of law. Not taking inquiry in earlier years by Assessing Officer will not preclude Assessing Officer to investigate the matter in following years - Held that:- This question has become academic. The impugned order of the Tribunal upholds the order of CIT(A) that on facts for the subject assessment year, there was no justification for enhancement the ALP by disallowing allocation of overhead office expenses of the JV partners to respondent assessee with a cap of 8.5% of the turnover of the respondent assessee. The reliance upon the earlier assessment orders was only in support of the fact that in identical factual situation, the TPO did not vary the ALP in respect of the allocation of overhead office expenses to the expenditure of the respective JV partners allocated to the assessee with a cap of 8.5% of its turnover. Appeal admitted on substantial question of law at Sr. No.(i) - Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in allowing the claim of the assessee following the AS7 of the ICAI and by not appreciating the fact that the same is not notified the provisions of Sec.145 of the I.T. Act, 1961?
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