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2016 (2) TMI 1295 - AT - Income TaxTP Adjustment - assessee had applied Resale Price Method ( RPM ) to submit that the transaction was at ALP - whether it should be RPM or TNMM for determination of the ALP? - HELD THAT - After taking note of the Tribunal s order in assessee s own case for the A.Y. 2009-10 2015 (9) TMI 1701 - ITAT HYDERABAD and also taking note that the issue arising in this year is also similar we deem it fit and proper to remit these issues to the file of the TPO for re-determination of the most appropriate method for determination of the ALP and we also direct the TPO to consider the comparables adopted by the assessee in addition to the companies selected by him for determination of the ALP if it is held that the RPM is the most appropriate method. Accordingly ground Nos. 1 to 13 are treated as allowed for statistical purposes. Disallowance u/s 36(1)(5) - contribution is to employees superannuation fund which has not been approved by the appropriate authority - HELD THAT - As this is a legal issue we deem it fit and proper to admit the additional evidence filed by the assessee and remit this issue also to the file of the A.O to examine the issue relating to the contribution made to the LIC and consider the same in the light of the judgment of the Hon ble Supreme Court in the case of Tex Tool Company Limited. 2009 (9) TMI 66 - SUPREME COURT Accordingly Ground of the assessee is allowed for statistical purposes.
Issues:
1. Transfer Pricing adjustment proposed by the TPO and confirmed by the DRP. 2. Disallowance of contribution made by the assessee to employees superannuation fund. 3. Levy of interest under section 234B, 234C, and 234D of the I.T. Act. Transfer Pricing Adjustment: The assessee appealed against the assessment order for the A.Y. 2007-08, challenging the Transfer Pricing (T.P.) adjustment proposed by the Transfer Pricing Officer (TPO) and confirmed by the Dispute Resolution Panel (DRP). The assessee applied the Resale Price Method (RPM) in its T.P. study to demonstrate that the transactions were at Arm's Length Price (ALP), while the TPO adopted the Transactional Net Margin Method (TNMM) and proposed an adjustment to the assessee's margin. The Tribunal referred to previous cases and remitted the issue to the TPO for re-determination of the most appropriate method for determining the ALP, directing consideration of comparables selected by the assessee in addition to those selected by the TPO. Grounds 1 to 13 were treated as allowed for statistical purposes. Disallowed Contribution to Employees Superannuation Fund: The assessee raised an additional ground of appeal citing a Supreme Court judgment that contributions made to the Life Insurance Corporation (LIC) are eligible for deduction under section 36(1)(v) of the I.T. Act. The Assessing Officer (A.O.) disallowed the claim under section 36(1)(5) on the grounds of non-approval by the appropriate authority. The Tribunal admitted the additional evidence filed by the assessee and remitted the issue to the A.O. to examine the contribution made to LIC in light of the Supreme Court judgment. Ground No.14 was allowed for statistical purposes. Levy of Interest: Ground No.15, related to the levy of interest under sections 234B, 234C, and 234D of the I.T. Act, was considered consequential. The A.O. was directed to give any consequential effect to the assessment. Ground No.16, being general in nature, required no adjudication. The appeal of the assessee was treated as allowed for statistical purposes. This judgment by the Appellate Tribunal ITAT Hyderabad addressed the issues of Transfer Pricing adjustment, disallowed contribution to employees superannuation fund, and the levy of interest under the I.T. Act. The Tribunal remitted the Transfer Pricing issue to the TPO for re-determination, allowed the additional ground on the contribution to LIC, and directed the A.O. to address any consequential effects of the levy of interest.
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