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2019 (6) TMI 995 - AT - Income TaxDeduction u/s 80-IB/80-IC - reallocation of common indirect expenses - HELD THAT:- DRP has merely followed the decision of Tribunal in assessee’s own case. The revenue is unable to point out any distinguishing feature during the impugned AY. Nothing on record would suggest that the ruling of Tribunal is not applicable to the facts of the present case. [2015 (12) TMI 514 - ITAT MUMBAI] . It has been brought to the notice that department’s appeal against Tribunal’s decision for AY 2008-09 has already been dismissed by Hon’ble Bombay High Court. Respectfully following binding judicial pronouncement, we upheld the stand of Ld. DRP. DRP has overruled application of provisions of Section 80- IA(10) by following the decision of Ld. DRP in AY 2008-09 & 2009-10 which was confirmed by Tribunal in [2015 (12) TMI 514 - ITAT MUMBAI] Therefore, taking consistent stand in the matter, we confirm the directions of Ld. DRP, in this year also. Depreciation claim on computer peripherals - @15% OR 60% - HELD THAT:- As decided in assessee's own case [2015 (12) TMI 514 - ITAT MUMBAI] we direct Ld. AO to allow depreciation @60% on the computer peripherals. Ground No. 1 stand allowed. Addition being un-reconciled amount reflected in Annual Information Return [AIR] - HELD THAT:- The perusal of directions of Ld. DRP reveal that this issue was not raised by the assessee before Ld. DRP. The letter stated to be issued by the bank, as placed before us, is after the date of directions of Ld. DRP. Therefore, while concurring with the stand of Ld. Sr. Counsel that mistaken reporting in AIR could not entail addition in the hands of the assessee, we deem it fit to restore the matter back to Ld. AO with a direction to the assessee to reconcile the stated discrepancy. AO is free to peruse latest AIR information of the assessee and seek information from the bank so as to arrive at logical conclusion TP adjustment - ALP of Export Sales - HELD THAT:- As no further appeal has been preferred by revenue for AY 2009-10 against the order of the Tribunal, on this issue. The revenue is unable to controvert the same. Therefore, respectfully following the consistent view of the Tribunal, we delete TP adjustment of ₹ 129.83 Lacs on account of export sales and allow ground no. 2 of assessee’s appeal. Commission on Corporate Guarantee - TPO estimated the same @2.25% & 1.15% for these two years which was restricted to 0.50% by the Tribunal in both the years - HELD THAT:- Hon’ble Bombay High Court rendered in Glenmark Pharmaceuticals Ltd. V/s ACIT [2017 (2) TMI 1305 - BOMBAY HIGH COURT] as confirmed by Hon’ble Supreme Court [2018 (12) TMI 608 - SUPREME COURT]. In the said decision, Hon’ble court has approved the estimation @ 0.53% & 1.47%. This decision has been rendered after considering the decision in CIT V/s Everest Kento Cylinders Ltd. [2015 (5) TMI 395 - BOMBAY HIGH COURT]. Therefore, respectfully following the higher judicial wisdom, on the facts, we restrict the estimation to 2%. The Ld. AO / TPO is directed to recompute the impugned TP adjustment. TP adjustment pertains to ALP of intra group services - reimbursement to AE at cost - The cost was allocated in the ratio of sale of Kiwi Products worldwide - HELD THAT:- In the absence of complete information, Ld. TPO was precluded to proceed with determination of ALP of these transactions. The primary onus to provide complete TP documentation was on assessee. No doubt, OECD guidelines makes it imperative for the assessee to demonstrate that the services were, in fact, received and thereafter, it was to be established that the price paid for these services was at Arm’s Length. Therefore, we restore the matter back to the file of Ld. TPO for re-determination of ALP of these transactions with a direction to the assessee to demonstrate cost allocation keys, evidences in support of the receipt of services etc. Needless to add that sufficient opportunity of being heard shall be granted to the assessee. Ground No. 3 stands allowed for statistical purposes. TP adjustment for AMP expenditure - International transaction as defined u/s 92B - absence of any arrangement between the assessee and its AE - HELD THAT:- As relying on JOHNSON AND JOHNSON PVT. LTD. VERSUS ADDL. COMMISSIONER OF INCOME TAX LTU–1, MUMBAI [2018 (11) TMI 1106 - ITAT MUMBAI] in the absence of any arrangement between the assessee and its AE, the mere incurring of third-party AMP expenditure could not be termed as international transaction as defined u/s 92B and therefore, the question of determination of ALP of the same would not arise at all. Therefore, we delete the impugned adjustment as proposed in the final assessment order. - Decided in favour of assessee.
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