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2018 (12) TMI 691 - AT - Income TaxTP adjustment in respect of transacted price of royalty paid to associated enterprises - Held that:- Assessee was engaged in the business of manufacture and sale of propeller shafts and light axles in the automotive industry segment. The assessee had entered into Technology Licensing Agreement with its associated enterprises AE Dana Corporation USA. Royalty was paid @ 2.85% of net sales by the assessee for the use of licensed technology in the manufacture of the said products pursuant to the renewal of the licensing agreement on 30.03.2007 for light axles and 14.06.2008 for propeller shafts, for a period of five years. The Transfer Pricing Officer (TPO) following earlier years, made the aforesaid upward adjustment in the hands of assessee, which was confirmed by Dispute Resolution Panel (DRP) and final assessment order was issued by the Assessing Officer, against which the assessee is in appeal. Disallowance of management fees - Held that:- Since the issue has been covered in favour of assessee and there is no change in factual aspects, we find no merit in the orders of authorities below. Accordingly, we direct the Assessing Officer to delete the addition made on account of disallowance of management service fees. Disallowance of provision made for warranty - Held that:- The issue raised in the present appeal is similar where the assessee is following systematic manner of creating provision for warranty and there is no change in factual aspects, hence, we find no merit in the orders of authorities below in not allowing the claim of assessee. Accordingly, we direct the Assessing Officer to delete the addition. Claim of deduction for employer’s contribution to the employees’ superannuation and gratuity funds - Held that:- We find merit in the plea of assessee since after respective trusts were created, the approval was sought from the Commissioner in time. However, the said approval was granted later but from retrospective effect. So, once the approval has been given by the Commissioner by passing orders in respect of Group Gratuity Fund and Employees’ Superannuation Fund, then contribution made by the assessee to the aforesaid funds is to be allowed in its hands as deduction. Accordingly, we hold so and direct the Assessing Officer to allow the same - Appeal of assessee is allowed.
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