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2016 (11) TMI 1362 - ITAT DELHITransfer pricing adjustment - mandatory comparability analysis - Held that:- Transfer Pricing Officer has also adopted transactional net margin method (TNMM) as the most appropriate method and selected 7 comparables without carrying out FAR analysis of those comparables with the assessee. Therefore there is basic flaw in the transfer pricing mechanism adopted by the ld. Transfer Pricing Officer. Moreover, he has also not given an opportunity to the assessee to comment on the comparables selected by him. The ld. first appellate authority has relied upon the decision of Philips Software Centre (P.) Ltd. [2008 (9) TMI 466 - ITAT BANGALORE-B ] and has held that since the ld. TPO has not mentioned any of the four conditions prescribed u/s 92C(3) of the Act rendering his order void. During the course of hearing the ld. DR has submitted that Hon'ble Karnataka High Court [2009 (2) TMI 832 - HIGH COURT OF KARNATAKA] has stayed the above judgment and therefore, the decision of the first appellate authority is erroneous as it relied on the stayed judgment. The Hon'ble Karnataka High Court vide its order dated 16.02.2009 has stayed the operation of the judgment on which the first appellate authority has relied upon. Though the Hon'ble High Court admitted the several questions of the law but stayed the whole of the judgment of the coordinate bench. Hence, we reject the contention the ld. AR that the decision of the coordinate bench is stayed to the limited extent. In view of above facts it is apparent that ld. first appellate authority vide his decision dated 25.03.2010 relying on the decision of the coordinate bench which was stayed by Hon'ble Karnataka High Court vide order dated 16.02.2009 deserves to be set aside. Hence, we set aside all the four grounds of the appeal to the file of the ld. TPO to determine ALP of international Transactions after giving assessee a proper opportunity of hearing. Addition on account of depreciation on rental assets - Held that:- infirmity in the order of the ld CIT(A) in allowing the claim of deduction of the depreciation to the assessee as assessee owns the assets and also uses it for the purposes of its business. The revenue's another aspect of this ground is that ld CIT(A) has admitted the affidavit of the assessee before him. We have perused the order of the ld CIT(A) wherein the affidavit only says that the assessee has not received any rent or installment on account of these machines. We reject the argument of the revenue as the information in the form audited financial statement is available on record as assessee has not shown any rental income in its profit and loss account and further in its fixed assets schedule it has shown the rental assets. - Decided against revenue Depreciation claimed on computer peripherals - Held that:- CIT(A) has correctly allowed the claim of the assessee of depreciation @ 60% on such assets following the decision of the Hon'ble Delhi High Court in CIT v. BSES Rajdhani Power Ltd [2010 (8) TMI 58 - DELHI HIGH COURT ] - Decided against revenue Disallowance of seminar expenses - Held that:- CIT(A) has held that these are the expenses for the marketing of new products launched by the assessee in the same line of business. They are routine in nature and further the decision of Hon'ble Supreme Court in case of Madras Industrial Investment Corpn. Ltd. v. CIT [1997 (4) TMI 5 - SUPREME Court ] does not apply to the facts of the case. We do not find any infirmity in the order of the ld. CIT(A) - Decided against revenue Allowance of expenditure on display stand - Held that:- CIT(A) has deleted the disallowance after verification of the invoices which demonstrated that expenses were incurred for display panel, banner stand and other kinds of display literature. He therefore held that looking to the nature of the expenditure and durability and longitivity of these items such expenditure is revenue in nature. We find no infirmity in the order of the ld. CIT(A). - Decided against revenue
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