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2019 (5) TMI 536 - AT - Income TaxTP Adjustment - disallowance u/s 10A(7) - Adjustment had to be made while working out the eligible profit for the purpose of computation of deduction u/s 10A of the Act of Pune Unit-I? - margins shown by the assessee on its transactions with associate enterprises at 26.40% were held to be higher than mean margins of comparables at 12.68%, while benchmarking the arm’s length price of international transactions - AO was of the view that applying the provisions of section 80IA(10) r.w.s. 10A(7) of the Act, the profits earned by the assessee were more than ordinary profits - HELD THAT:- As decided in assessee's own case [2017 (12) TMI 1465 - ITAT PUNE] The issue arising in the present appeal is identical to the issue before the Tribunal in the case of M/s. Honeywell Automation India Ltd. Vs. DCIT [2015 (3) TMI 494 - ITAT PUNE] and following the same parity of reasoning, we find no merit in the orders of authorities below in restricting the claim of deduction u/s 10A/10B of the Act and held that there is no merit in re-computing the deduction under section 10A of unit 1 of Pune in accordance with the provisions of section 10A(7). Accordingly, we reverse the same and delete addition. - Decided in favour of assessee. Disallowance u/s 14A while computing book profits u/s 115JB - MAT computation - HELD THAT:- Issue raised is squarely covered by the ratio laid down by the Special Bench of Delhi Tribunal in ACIT Vs. Vireet Investment (P.) Ltd. [2017 (6) TMI 1124 - ITAT DELHI] wherein the issue was that whether the amount of expenditure relatable to exempt income as contemplated in clause (f) to Explanation 1 to section 115JB(2) could be arrived at by resorting to provisions of section 14A. The Special Bench held that section 115JB is a separate code in itself and Explanation 1(f) of section 115JB requires disallowance of actual expenditure incurred to earn exempt income. The amount derived by using formula as per Rule 8D of the Income Tax Rules, 1962 was not required to be disallowed as the same was not actual expenditure incurred - claim of assessee is allowed
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