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2020 (9) TMI 487 - AT - Income TaxTP Adjustment - reimbursement of the expenses paid by the assessee to its associated enterprise on account of the expats salary which is utilised by the assessee for providing services to the other parties and cost +10% markup is charged - HELD THAT:- Services been duplicative in nature than absolutely independent customer i.e. Bharti Retail Ltd would not have obliged to pay anything for such services. Same are also not shareholder services since assessee would not have availed the services from its associated enterprise then it would have had to hire similarly experienced personnel from external sources. It was further held that assessee was the sole and absolute beneficiary of the services. For assessment year 2013-14 TPO has deleted the addition on account of determination of the arm’s-length price of the similar services for that year. In view of the above facts, respectfully following the decision of the coordinate bench in assessee’s own case for the earlier years, and subsequently when Transfer Pricing Officer himself has deleted the addition for subsequent year i.e. assessment year 2013-14 and for earlier years i.e. assessment year 2009-10 and 2010-11, we direct the learned Transfer Pricing Officer/AO to delete the addition and accordingly we allow ground No. 2-6 of the appeal. Disallowance u/s 14A with Rule 8D - HELD THAT:- Assessee has earned a tax free income in the form of dividend of ₹ 746,786. Admittedly, the assessee has not disallowed any expenditure u/s 14 A. The claim of the assessee is that it has not incurred any expenditure for earning of the exempt income. Assessing Officer without recording of the any satisfaction with respect to the correctness of claim of the assessee, invoke the provisions of Section 14A and applied the computational methodology provided under Rule 8D of the Income Tax Rules. According to Section 14A(2)of the Act, the learned Assessing Officer should have recorded his satisfaction about the correctness of the claim of the assessee. If no such satisfaction is recorded, no disallowance can be made. In the present case admittedly Assessing Officer has not recorded any satisfaction as provided u/s 14A (2) , which is a mandatory requirement, we delete the disallowance u/s 14A.
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