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2020 (12) TMI 723 - AT - Income TaxTP Adjustment - addition on account of Arm’s Length Price (ALP) - TPO noted that Assessee had paid royalty to Expeditors International of Washington Inc - TPO also concluded that with the payment of royalty, the profitability of the assessee has reduced in comparison to its peer group companies thus held the ALP of the international transaction on account of royalty payment to be Nil and accordingly the income of the assessee was enhanced - CIT-A deleted the addition - HELD THAT:- CIT(A) has considered the supplementary TNMM analysis to check the impact of royalty payment on assessee’s profit margin that of independent comparable companies to come to a conclusion that the ratio of operating profit to cost at sales of the assessee is comparable to that of uncontrolled entities but we are of the view that her decision to grant relief is not based solely on the aforesaid supplementary analysis furnished by the assessee at the behest of CIT(A). CIT(A) has taken into consideration various other factors (which are extracted herein above) to come to the conclusion that the AO/TPO was not justified in making the addition. As far as merits of the deletion of addition is concerned, no fallacy in the findings of CIT(A) has been pointed by the Revenue. Even on the issue of alleged violation of provisions of Rule 46A of I.T. Rules, we are of the view that deletion of addition was not based solely on the basis of the alleged additional evidence filed by the assessee but various other material factors as noted in the order. We find no reason to interfere in the order of CIT(A) and thus the grounds of Revenue are dismissed. TDS u/s 195 - Addition u/s 40(a) - addition on account of Global Account Manager(GAM) Expenses paid in foreign currency but no TDS was deducted - CIT(A) while deciding the issue in favour of the assessee has given a finding that the amount incurred by the assessee on account of GAM charges cannot be treated as payment of salary to non-resident but it was in the nature of reimbursement of expenses and the same was not liable for deduction for TDS - HELD THAT:- As in A.Y. 2001-02 & 2004-05 identical issue arose in assessee’s own case and the issue was decided in assessee’s favour by the Co-ordinate Bench of Tribunal and the order of the Tribunal has been upheld by the Hon’ble Delhi High Court. Before us, no distinguishing feature in the facts of the case in the year under consideration and that of A.Y. 2001-02 & 2004-05 [2011 (12) TMI 104 - DELHI HIGH COURT] has been pointed out by the Revenue. Further no fallacy in the findings has been pointed out by the Revenue before us. Revenue has also not placed any material on record to demonstrate that the order of the Tribunal in assessee’s own case in earlier years has been set aside/overruled or stayed by higher judicial forum. In such a situation, we find no reason to interfere in the order of CIT(A). Addition on account of lease line expenses - No deduction of tax u/s 40(a) - CIT- A deleted addition - HELD THAT:- identical issue arose in assessee’s own case in A.Y. 2001-02 & 2004-05 wherein the issue was decided in favour of the assessee by the Co-ordinate Bench of Tribunal. We further find that the order of Tribunal in favour of the assessee was upheld by the Hon’ble Delhi High Court. Before us, no distinguishing feature in the facts of the case and that of A.Y. 2001-02 & 2004-05 has been pointed out by the Revenue. Further no fallacy in the findings of CIT(A) has been pointed before us by the Revenue. Addition on account of royalty expenses - assessee was asked to show has to why the amount not be considered to be payment which is in the nature of enduring advantage and should not be capitalized and disallowed - CIT-A deleted the addition - HELD THAT:- Before us the Ld AR has submitted that the royalty paid by the Assessee in subsequent years has been accepted by the Revenue as no disallowance has been made by the Revenue. The aforesaid contention of the Ld AR has not been controverted by the Revenue. We further find that CIT(A) while deleting the addition has given a finding that the payment on account of royalty is an operational expenses and revenue in nature and therefore the ratio of decision of Hon’ble Apex Court in the case of Southern Switchgear [1997 (12) TMI 105 - SC ORDER] are not applicable. He has further given a finding that the royalty has already been disallowed by the TPO and the disallowance once again made by the AO results in double disallowance. Before us, no fallacy in the findings of CIT(A) has been pointed out by the Revenue. Excess claim of depreciation on computer accessories - AO was of the view that UPS, printers etc. are not part and parcel of the computer but are part of machinery on which depreciation is to be allowed @ 25% and not @ 60% as claimed by the assessee - HELD THAT:- We find that identical issue of excess claim of depreciation arose in assessee’s own case in A.Y. 2001-02, 2003-04 & 2004-05 wherein the Co-ordinate Bench of Tribunal has decided the issue in favour of the assessee. Before us, no distinguishing features in the facts of the case and that of the earlier years has been pointed out by the Revenue. Revenue has also not placed any material on record to demonstrate that the order of the tribunal in assessee’s own case in earlier years has been set aside/overruled or stayed by higher judicial forum.
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