https://www.taxtmi.com/caselaws?id=310727 ITAT Delhi ruled in favor of the assessee on two key issues. Regarding transfer pricing, the tribunal held that royalty payments at 3% of sales to an AE were at arm's length price, as the original agreement was made when parties were unrelated (1990-1994), establishing comparable uncontrolled price. The TPO's NIL adjustment was deleted, following HC precedents that royalty payments cannot be disallowed based on benefit test. On Section 14A disallowance, the tribunal found the AO failed to record mandatory satisfaction regarding incorrect claims before invoking Rule 8D, and the assessee had sufficient interest-free funds exceeding investments, negating any disallowance requirement. en-us Fri, 22 Apr 2016 00:00:00 +0530 Thu, 09 Nov 2023 20:50:48 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=310727 ITAT Delhi ruled in favor of the assessee on two key issues. Regarding transfer pricing, the tribunal held that royalty payments at 3% of sales to an AE were at arm's length price, as the original agreement was made when parties were unrelated (1990-1994), establishing comparable uncontrolled price. The TPO's NIL adjustment was deleted, following HC precedents that royalty payments cannot be disallowed based on benefit test. On Section 14A disallowance, the tribunal found the AO failed to record mandatory satisfaction regarding incorrect claims before invoking Rule 8D, and the assessee had sufficient interest-free funds exceeding investments, negating any disallowance requirement. Case-Laws Income Tax Fri, 22 Apr 2016 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=310727