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2020 (4) TMI 909 - AT - Income TaxTP Adjustment - Comparable selection - decision of TPO & DRP in adopting the threshold limit of 25% for “Related Party Transaction” filter as against the limit of 10% adopted by the assessee - HELD THAT:- We notice that the Ld DRP has given its decision of adoption of RPT filter, which is not the objection of the assessee. With regard to the claim for Capacity Utilisation Adjustment, the Ld DRP, has expressed that the assessee has not raised this objection before the TPO and accordingly declined to adjudicate this ground. With regard to the substitution of PLI from OP/OR to OP/OC, the assessee had raised objection in ground 8.1 urged before Ld DRP. However, the Ld DRP has not adjudicated the same. We notice that the assessee has furnished details of the companies, in its paper book. We notice that the Ld DRP has rejected the claim of the assessee by making general observations, i.e., without addressing specific grounds urged in respect of each of the companies. We have noticed that the assessee, in its Transfer Pricing study, has made adjustment towards under utilization of capacity. However, the said adjustment was not given by the TPO. Hence, we are of the view that the Ld DRP was not justified in declining to adjudicate this claim of the assessee. As noticed earlier, the Ld DRP has not adjudicated the issue relating to selection of PLI. We are of the view that the Ld DRP has passed a non-speaking order. In this view of the matter, we are of the opinion that all the issues relating to Transfer pricing adjustment need to be restored to the file of Ld DRP/AO for adjudicating all the objections of the assessee by a speaking order. Accordingly, we set aside the Transfer pricing adjustment made in the final assessment order and restore all the issues relating there to the file of AO/DRP with the direction to the Ld DRP to pass a speaking order. Disallowance made u/s 40(a)(ia) of the Act in respect of year end provisions made - HELD THAT:- Before us, the ld A.R argued that the yearend provisions are required to be made as per accounting principles on estimated basis. Assessee could not deduct tax therefrom, since the payees are not known. However, we notice that the assessee has stated before Ld DRP that the provisions have been made for payment to contractors, subcontractors, professional fees, royalty, rent and commission. Hence the payees should be known to the assessee. Accordingly, we are of the view that the assessee should have deducted tax at source, when the payees are known. Accordingly we confirm the addition made by the AO u/s 40(a)(ia) of the Act.
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