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2018 (5) TMI 346 - AT - Income TaxAddition on account of transfer pricing adjustment - deductibility of such payment in terms of section 37(1) - Held that:- AO in his order has taken the ALP of the international transaction at Nil on the basis of such recommendation of the TPO without carrying out any independent investigation for the deductibility or otherwise of such payment in terms of section 37(1) of the Act. This addition has been made by the AO in his order without invoking section 37(1) of the Act. As the TPO in the instant case initially determined Nil ALP by holding that no benefit accrued to the assessee etc. and the AO made the addition without examining the applicability of section 37(1) of the Act, we find the actions of the AO/TPO running in contradiction with the ratio laid down in Cushman & Wakefield (2014 (5) TMI 897 - DELHI HIGH COURT). In these circumstances, we set aside the impugned order on this score and send the matter to the file of AO/TPO for deciding it. Disallowance u/s 14A - Held that:- We find that investments in the Units at the end of the year stood at ₹ 18.59 crore with the corresponding opening figure at ₹ 3.84 crore as against the amount of shareholders’ fund at ₹ 399.71 crore at the close of the year and ₹ 161.91 crore at the beginning of the year. This proves that the amount of investment in the Units etc., yielding exempt income, is much less than the amount of shareholders’ funds. We uphold the impugned order in deleting the disallowance of interest u/s 14A at ₹ 45,86,464/-, against which the Revenue has preferred this grievance before the Tribunal. This ground is not allowed. Disallowance of claim of depreciation @ 60% on UPS as against 15% - Held that:- We find that the issue of allowing depreciation at higher rate on computer peripherals is no more res integra in view of the judgment of the Hon'ble Delhi High Court in CIT vs. BSES Yamuna Powers Ltd. [2010 (8) TMI 58 - DELHI HIGH COURT] wherein the entitlement to the higher rate of depreciation on computer peripherals has been laid down by deciding the issue in favour of the assessee.
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