The ITAT ruled in favor of the assessee on three issues. First,...

The ITAT ruled in favor of the assessee on three issues. First, regarding 'Advance received from Customers,' the Tribunal followed its earlier order and Supreme Court precedent in Taparia Tools Ltd., allowing deduction of the entire expenditure in the year of payment. Second, the ITAT permitted the security deposit written off to be allowed as business loss, considering the small amount relative to assessee's income and its nature as a revenue expense for tender participation. Finally, on transfer pricing adjustments for 'commission received' from Associated Enterprises, the Tribunal found that after excluding dissimilar comparables, the operating profit/sales margin was 13.98%, noting that in subsequent years the TPO had accepted the commission as being at arm's length.