Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (12) TMI 298 - ITAT DELHIAdjustment made by the TPO with respect to payment of royalty - CIT(A) deleted the addition - Held that:- Once the assessee clearly demonstrates that the effective royalty pay out was less than earlier years then there was no reason to make any adjustment in the royalty pay out. Moreover, we find that the decision of Hon’ble Delhi High Court in assesse’s own case is also applicable to the present case. In the current assessment year the overall profit margin of distribution segment (23.3%) is much more than those of comparables (2.2%). Ld. TPO has not brought on record any comparable case of royalty payment so as to resort to the provision of sec. 92C. Therefore, the touch stone, on which the royalty payment was to be considered, was whether the payment was made wholly and exclusively for the purpose of business or not. This aspect has not been disputed because ld. TPO has allowed the royalty payment albeit @ 30% of actual sales.Further, in AY 2006-07 the ld. DRP has accepted the payment of royalty @ 56% of actual sales. No reason to interfere with the order of ld. CIT(A) on the issue in question.- Decided against revenue Disallowance of prior period expenses - CIT(A) deleted the addition - Held that:- No reason to interfere with the order of ld. CIT(A) on the issue in question because vide letter dated 1-8-2006 the assessee had filed a revised computation and pointed out that during the audit of the immediately succeeding financial year i.e. FY 2004-05 prior period income of ₹ 92,84,552/- on ₹ 2,27,43,899/- were noted and the effect of the same in the revised tax computation was to be given. Ld. CIT(A) has, in principle, accepted that the Bangalore unit was eligible for deduction u/s 10A but has directed the AO to verify the claim of the assessee on the basis of form 56F. Accordingly, he will be required to examine whether the amounts were received in time or not. We, therefore, do not find any reason to interfere with the order of ld. CIT(A) on this issue and we uphold the same.- Decided against revenue Eligibility for tax holiday u/s 10A - CIT(A) allowed claim - Held that:- The issue is covered in favour of the assessee by the order of the ITAT in assessee’s own case for AY 1998-99 dismissing revenue’s appeal allowing the said exemption to the assessee by following the rule of consistency as the material facts relevant to this issue as involved in the year under consideration are admittedly similar.- Decided against revenue
|