TMI Blog2017 (2) TMI 1388X X X X Extracts X X X X X X X X Extracts X X X X ..... T] we are of the considered opinion that it would be in the fitness of things if the impugned order is set aside and the matter is restored to the file of TPO/AO for a fresh determination of the question as to whether there exists an international transaction of AMP expenses. If the existence of such an international transaction is not proved, the matter would end there and then, calling for no transfer pricing addition. If, on the other hand, the international transaction is found to be existing, then the TPO would determine the ALP of such an international transaction. Addition in respect of Provision of doubtful debts - AO did not allow deduction for this sum as it was a provision and not an actual write off - Held that:- Amount of provision is not deductible. Actual amount of write off has to be allowed as deduction u/s 36(1)(vii). Reversal of provision should not lead to taxable income. However, deduction allowed in respect of provision for doubtful debts for the A.Y. 2003-04 should be taken into consideration while allowing deduction on actual write off or reversal of provisions to the relevant extent so that no double deduction gets allowed. Disallowance of advertiseme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... veral countries in Asia, Europe, South America, USA and Canada. The assessee company was initially registered as a 100% export oriented unit for undertaking activities of coating of raw beads, polishing and knotting of crystals etc. Later on, the assessee also started imports and sale of crystal goods and crystal components. Apart from 100% EOU division in Pune, the assessee carries out its trading activities from a domestic unit in New Delhi which has further two sub-divisions, namely, Consumer Goods Division (CGD) and a Crystal Components Division (CCD). Major customers of CGD and CCD are designers and garment manufacturers etc. The assessee reported certain international transactions in Form no. 3CEB. The Assessing Officer (AO) referred the matter of determination of their arm s length price (ALP) to the Transfer Pricing Officer (TPO). Reported international transactions include a transaction of Import of crystal and crystal components with transacted value of ₹ 14,91,85,346/-. Only this international transaction is under dispute. The assessee applied Comparable Uncontrolled Price (CUP) method to demonstrate that the international transaction was at ALP. In order to fort ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection of the CUP method by the authorities below has been upheld and further direction has been given to the AO/TPO for a fresh determination of the ALP of this transaction, firstly, by considering the application of RPM and if, due to one reason or the other, the same cannot be applied, then, the TNMM. Detailed discussion made in our order for the A.Y. 2004-05 is applicable and should be read as a part of this order also, to be followed by the TPO in such fresh determination. B. TP addition on AMP Expenses 3.1. During the course of first appellate proceedings, the ld. CIT(A) observed that no transfer pricing analysis was done in respect of the international transaction of advertisement, marketing and promotion (AMP) expenses. The assessee was called upon to benchmark this transaction. Taking note of bright line test and other relevant factual details, the ld. CIT(A) made an addition of ₹ 2,51,69,338/- towards transfer pricing adjustment on AMP expenses. The assessee is aggrieved against such adjustment. 3.2. The ld. AR reiterated the arguments as made for the preceding year and submitted that the view consistently taken be adopted here also. The ld. DR also reit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eard to the assessee. 4. To sum up, we set aside the impugned order on the issue of transfer pricing additions towards `Import of Crystal goods and Crystal components and `AMP expenses and remit the matter to the file of AO/TPO for fresh determination of the ALP in consonance with our directions given in the order for the A.Y. 2004-05. Needless to say, the assessee will be allowed a reasonable opportunity of being heard in such fresh proceedings. II. NON-TRANSFER PRICING ADDITIONS 5.1. The only issue raised by the assessee in its appeal is against the confirmation of addition in respect of Provision of doubtful debts amounting to ₹ 3,24,850/-. The AO did not allow deduction for this sum as it was a provision and not an actual write off. The ld. CIT(A) approved the action taken by the AO in this regard. 5.2. Having heard both the sides perused the relevant material on record, we find that similar issue cropped up before us in appeal of the assessee for the A.Y. 2004-05. This issue has been discussed in detail in such order. As no fresh arguments have been made, similar findings will apply, mutatis mutandis, to the instant year as well. To sum up, the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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