Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 626 - AT - Income TaxTP Adjustment - MAM selection - HELD THAT:- As we direct the TPO to apply CUP as the MAM and recompute the ALP after giving the assessee a reasonable opportunity of being heard. Disallowance of provision for warranty - HELD THAT:- We respectfully follow the decisions of the Co-ordinate Bench [2020 (3) TMI 471 - ITAT BANGALORE] and hold that the provision for warranty is an allowable expenditure. MAT computation u/s 115JB - HELD THAT:- Addition of provision for warranty to the book profits u/s 115JB is incidental. In view of the decision on the allowability of provision for warranty, this ground which is incidental, does not warrant any separate adjudication and hence dismissed. Disallowance u/s 37(1) of advertisement and business promotion expenses - HELD THAT:- For the purpose of an expenditure to be claimed u/s 37(1), the expenses should not be capital in nature and should have been incurred wholly and exclusively for the purpose of business. Assessee has submitted various details, including the details of tax deducted at source, bank statement, etc., to substantiate that the expenditure towards advertisement expenditure is actually incurred and that the payments are made to the vendor, Mudhranna Creations. The fact that the vendor has wound up the operations is supported by the report from MCA website and that can be inferred as a reason for non-response from the vendor for the notice under section 133(6) which cannot be the only reason for disallowance, when other documents submitted by the assessee evidences the genuineness of the expenditure. We are, therefore, of the considered view that no disallowance is warranted for the advertisement expenditure incurred by the assessee, which is otherwise substantiated based on the various details submitted. This issue is allowed in favour of the assessee.
|