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2021 (4) TMI 442 - AT - Income TaxTP adjustment on account of international marketing expenses - benchmarking the transaction in line with the provisions of section 92C - HELD THAT:- In view of the law expounded by Hon'ble High Courts in M/S. LEVER INDIA EXPORTS LTD. [2017 (2) TMI 120 - BOMBAY HIGH COURT and EKL APPLIANCES LTD [2012 (4) TMI 346 - DELHI HIGH COURT], OECD guidelines and the provisions of the Act, we are of considered view that in the instant case objections raised by the TPO for making adjustment in international marketing expense and upheld by the CIT(A) are without any legal rational and thus, liable to be set aside. On merits, we observe that per se payment for the marketing services are not disputed by the Assessing Officer, however, the TPO has not carried out necessary exercise of benchmarking ALP of the international transaction in question, ergo, we deem it appropriate to restore this issue to the file of Assessing Officer/TPO for determination of arm's length price of the transactions, as per the provisions of section 92C of the Act. Needless to say that reasonable opportunity of hearing be afforded to the assessee, in accordance with law. The findings of the CIT(A) on the issue of transfer pricing adjustment of international marketing expenses are set aside and ground no. 1 of the appeal is allowed for statistical purpose. Addition u/s 145A on account of alleged unutilized CENVAT credit - assessee is following exclusive method for accounting excise duty of purchases - AO insisted that inclusive method of accounting should have been followed - whether inclusive method or exclusive method of accounting is adopted, both would give same result? - HELD THAT:- We find that the dispute with regard to CENVAT credit in the case of assessee is perennial since AY 2002-03. The assessee has been following exclusive method of accounting as against inclusive method as required under section 145A of the Act. Under excusive method the amount of CENVAT credit is not added to the sales and purchases, but is shown separately. The assessee has filed the copies of order passed by the CIT(A) from AY 2002-03 onwards (except for AY 2003-04 when no addition was made on account of unutilised CENVAT Credit) alongwith order giving effect. The CIT(A) has been consistently allowing the benefit of CENVAT credit to the assessee. The Assessing Officer has been giving effect to the order of CIT(A), accordingly. In the impugned assessment year position is no different. We find merit in the contentions raised by the assessee. The Assessing Officer is directed to delete the addition u/s. 145A of the Act. The findings of CIT(A) in the impugned order are set aside and ground no. 2 of the appeal is allowed.
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