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2018 (1) TMI 726 - AT - Income TaxTPA - adjustment towards profit attributable to the assessee company in connection with sale of intangible assets by the assessee to its AE - Held that:- The IPR was sold by the assessee to its AE in the earlier A.Ys and the ALP of the same had arisen for consideration in the A.Y 2010-11. The Coordinate Bench of the Tribunal in [2016 (8) TMI 727 - ITAT HYDERABAD] held that there is no doubt, there exists tax planning. There can be tax planning within the four corners of the taxation laws. There is enough mechanism in the existing Act and also there is DTAA - arrangement with Ireland, which will take care of the situations of tax avoidance. The revenue has not brought any cogent evidence to prove that there exists any tax avoidance. In our considered view, the action of the TPO is not justified and accordingly, the grounds raised by assessee are allowed. Management Consultancy Fee - Held that:- As in assessee's own case [2016 (1) TMI 451 - ITAT HYDERABAD] as per the details furnished by assessee before the TPO, the actual management fee of US$ 4,27,000 with administration charges of US$ 14000 and markup of 5%, at the exchange value as on the date of 31-03-2008, can be considered as 'service charges' for the intra group services rendered. This can be taken as ALP. Therefore, modifying the order of TPO, we determine the Management Consultancy Fee as detailed above and AO is directed to modify the order accordingly. Computation of exemption u/s 10AA - Held that:- We direct the AO to exclude the insurance and travelling and conveyance expenses both from the export turnover as well as the total turnover for the purpose of computation of exemption u/s 10AA of the Act.
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