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2012 (8) TMI 730 - ITAT DELHIArm’s length price - investment advisory services to assets management companies - transactions between assessee and its associated enterprises were at arm’s length price, an arm’s length analysis was performed by assessee-company and submitted to TPO - TPO rejected two entities that were selected comparables by assessee-company and, on other hand, TPO introduced two fresh comparables to determined arm’s length price – Held that:- Assessee raised several points and contentions before the learned DRP against the proposed adjustment to the amount of transactions entered into by the assessee with its associate enterprises - DRP in a very short and summary order has upheld the TPO’s action without giving the reasons as to why the TPO was justified in suggesting the adjustment to the transfer pricing transactions after selecting various comparables - DRP has failed to ascribe cogent and germane reasons for rejecting the assessee’s several objections, accepting the TPO’s order in summary manner and has failed to consider various points raised by the assessee - matter is restored to the file of the Assessing Officer/DRP for fresh adjudication Disallowance of bonus paid by the assessee to its employees (who are also shareholders of the assessee-company) under section 36(1)(ii ) of the Act by holding that the same would have been payable by way of dividend – Held that:- There was a specific direction by the learned DRP to allow the assessee’s claim if the same was allowed in the earlier year - matter restored to the file of the Assessing Officer for fresh adjudication after verifying as to whether identical claim was allowed in earlier years and if it is found that the same is allowed in the earlier year, the Assessing Officer shall allow the assessee’s claim as so directed by the learned DRP Disallowance of severance cost paid by the assessee-company to one of its employees – Held that:- Issue was pending in appellate proceedings in the earlier years - matter restored to the file of the Assessing Officer/DRP for fresh adjudication after ascertaining as to whether identical issue based on same set of facts has been decided by any appellate authority in earlier years and if it is not so, then learned DRP is directed to decide the issue on merits having regard to the provisions provided under section 37(1) of the Act in the light of the facts of the present case Disallowance out of staff welfare expenses – Held that:- Claim of the assessee was that the get together was held for the benefit of the employees. Since the expenditure was incurred for the benefit of the employees in the course of carrying on business by the assessee, it cannot be said that the amount has not been incurred for the purpose of business. The assessee is in the business of investment advisory services and its business is solely dependent on the skills and expertise of its employees - it is a common practice in the industry to conduct training sessions for its employees and get together – expenditure allowed Disallowance of the payment made by the assessee to Hunt Executive Research Limited under section 40(a)( ia) of the Act – Held that:- Assessee paid a fees to Hunt Executive Research Limited as professional fees - payment on account of professional fees, tax was duly deducted at source under section 194J and thus, no disallowance has been made by the Assessing Officer - reimbursement of expenses would not come under the ambit of payment of professional fees within the meaning of section 194J of the Act - disallowance deleted
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