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2023 (8) TMI 440 - AT - Income TaxTP Adjustment - Upward adjustment for financial guarantee given by assessee to AE - HELD THAT:- Bombay High Court in the case of Siro Clinpharm [2021 (10) TMI 754 - ITAT MUMBAI] held that corporate guarantee constitutes international transaction u/s. 92B of the Act and further the ITAT directed the Assessing Officer to adopt 0.5% as an arms length consideration for the corporate guarantee issued by the assessee in favour of its AE. We are of the considered view that extending of corporate guarantee to AE constitutes an “international transaction” and the Assessing Officer is directed to adopt 0.5% as an arms length consideration for the corporate guarantee issued by the assessee in favour of its AE. Upward adjustment for software services by P & C division of assessee to AE - HELD THAT:- Considering assessee as submitted that the facts and issues for consideration for assessment year 2010-11 are completely different and unconnected it was submitted before us, that in the instant case, it may be noted that order of ld. CIT(A) for assessment year 2010-11 [2019 (9) TMI 1702 - ITAT AHMEDABAD] on which reliance has been placed by CIT(A) while confirming the adjustment has been reversed by ITAT subsequently. However, in the instant facts, the matter needs to be set aside to see whether the comparables which have been taken are correct or not. In the instant facts, the TPO would need to examine the comparables in light of earlier years’ orders. Upward adjustment for giving comparables carrying out by assessee to the customers of associated enterprise - HELD THAT:- ITAT in assessee’s own case on identical set of facts for assessment years 2008-09 [2018 (3) TMI 1881 - ITAT AHMEDABAD] and 2009-10 and 2010-11 [2019 (9) TMI 1702 - ITAT AHMEDABAD]has decided the issue in favour of the assessee. Upward adjustment of HRM services - assessee provides it’s own employee on secondment basis to its associated enterprises - HELD THAT:- As decided in own case 2009-10 and 2010-11 [2019 (9) TMI 1702 - ITAT AHMEDABAD] the appellant's contentions find favour. Therefore, MUK's operations can be considered to be correctly characterized as a distributor and a return based on sales which incentives MUK to generate more revenue appears to be appropriate. Allowable business expenses - Disallowance of recruitment expense being 20% of the recruitment and training expense treating the same incurred for the purpose of business) - HELD THAT:- As decided in own case 2006-07 [2012 (5) TMI 206 - ITAT AHMEDABAD] in a situation where the requisite detail in respect of training of employees and the genuineness of the expenditure was very much before the AO and in respect of these two reasons, no disallowance was suggested, then it was unjustifiable on the part of the AO to say that a 20% recruitment and training expenses would be disallowed on mere presumption that it was not wholly beneficial to the assessee. There is no evidence in the possession of the AO to hold that a particular expenditure on training was not business related. In fact, the argument of the assessee appears to be logical that considering the nature of the services provided a training of the technical staff is always a business necessity and because of the trained staff the assessee's revenue has substantially gone up. In the absence of any adverse material, we are not inclined to approve such an adhocism. This disallowance is hereby deleted. TDS u/s 195 - non-deduction of tax u/s. 40(a)(ia) - payment on certain professional and consultancy services to U.K. resident companies - HELD THAT:- As decided in own case 2006-07 [2012 (5) TMI 206 - ITAT AHMEDABAD] since the services in question were neither "availed" nor "rendered" and even not "utilized" in India, therefore no tax was required to be deducted at source. Appeal of revenue dismissed.
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