Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (4) TMI 186 - AT - Income TaxTP Adjustment - Business Support Services - HELD THAT:- AO is directed to re-compute ALP taking into consideration the comparable excluded by the Tribunal. Transfer Pricing Adjustment - Recovery of Expenses - DRP determined a 15% mark-up on the amount of such recovery treating the same to be support services rendered by the assessee to its AEs and computed an adjustment - HELD THAT:- A mark-up of 8% instead of 15% is considered to be reasonable. The AO is directed to re-compute the ALP. The appeal of the assessee on this ground is allowed for statistical purpose. Disallowance u/s 37(1) - Expenditure on doctors - addition solely on application of CBDT Circular No. 5/ 2012 dated 1 August 2012 read with clause 6.8 of Medical Council of India (MCI) - HELD THAT:- We find that the payments made by the assessee to the Doctors in a different form as training and consultancy is another form devised to camouflage the real purpose. The deduction of TDS doesn’t give any credence or legalize the payments which are in contravention with the law laid down in M/S APEX LABORATORIES PVT. LTD [2022 (2) TMI 1114 - SUPREME COURT] - Hence, we hold that the payments made by the assessee have been rightly disallowed by the Revenue. The appeal of the assessee on this ground is dismissed. Disallowance on account of Depreciation - mandation of ownership of such machines in name of the assessee - assessee has claimed depreciation on fixed assets lying with various hospitals/ distributors - disallowance of claim assessee is not the actual user of the machinery - HELD THAT:- The said equipment in question is the property of the assessee is not meant for sale and is being issued for regular follow up of pacemakers and post implant programming support. Thus, the first condition i.e. the ownership of such machines in name of the assessee is clearly established and is in fact also not disputed by the tax department. As regards the second condition, it is clearly evident that these machines are used solely for the purposes of business of the assessee for providing pre-sales and postsales activities i.e. servicing/ follow-up monitoring/ feasibility evaluation etc. in relation to its products i.e. pacemakers and stents. A cursory reading of definition Section 2(c) of The Hire Purchase Act, 1972 makes it evident that a hire purchase agreement is one where the hirer has an option to purchase the goods in accordance with terms of the agreement and the property in the goods pass on to such person on the payment of the last installment. Thus the allegation of the revenue is on a totally wrong appreciation of facts. The appeal of the assessee on this ground is allowed. Clinical trial expenses - Allowable business expenses or not? - HELD THAT:- We hold that clinical trials are an integral part of the feedback system on efficiency of the products of the assessee and hence it is intricately connected with the business of the assessee and hence it cannot be said that the expenses have not been incurred solely and exclusively for the business purpose.
|