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of <h1>Tribunal's Decision on Transfer Pricing Adjustments, Section 10A Deduction, Relocation Expenses, and TDS Interest</h1> <h3>American Express (I) P. Ltd. Versus The Dy. C.I.T Circle-2 (2) New Delhi</h3> American Express (I) P. Ltd. Versus The Dy. C.I.T Circle-2 (2) New Delhi - TMI Issues involved:1. Transfer pricing adjustment2. Denial of deduction u/s 10A of the Act3. Disallowance of relocation expenses u/s 40(a)(i) of the Act4. Non-granting of tax deducted at sourceDetailed Analysis:1. Transfer Pricing Adjustment:The appellant, a subsidiary of an American company, engaged in data management, faced transfer pricing adjustments by the TPO. The TPO selected 8 comparable companies for benchmarking international transactions, resulting in an upward adjustment. The appellant sought exclusion of certain comparables based on previous tribunal decisions. The Tribunal directed the exclusion of specific comparables and inclusion of others based on functional similarity and turnover criteria.2. Denial of Deduction u/s 10A:The appellant claimed a deduction u/s 10A for a unit set up during a specific financial year. The Tribunal considered previous decisions and directed the AO to allow the deduction, citing the establishment of a new unit and consistency in granting deductions for the same unit in earlier years.3. Disallowance of Relocation Expenses:The Assessing Officer disallowed relocation expenses, considering them as FTS/royalty under the India USA DTAA and subject to TDS. The appellant argued that a substantial portion of expenses was for employee travel, not covered by the Centrica case. The Tribunal found the details needed verification and remanded the issue to the AO for further examination, directing proper verification and a fresh decision.4. Non-Granting of Tax Deducted at Source:Regarding the issue of non-granting of TDS credit, the Tribunal directed the AO to give credit as per legal provisions. The levy of interest was deemed consequential, with the AO instructed to apply it as per the law.In conclusion, the Tribunal allowed the appeal in part for statistical purposes, providing detailed directions for reconsideration of the issues related to transfer pricing adjustments, deduction u/s 10A, disallowance of relocation expenses, and granting of tax deducted at source. The judgment emphasized the importance of consistency, functional similarity, and adherence to legal provisions in determining tax liabilities and deductions.
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