2016 (7) TMI 1245

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....tion of law for our consideration :- "1(a) Whether on facts and in circumstances of the case and in law the Tribunal was right in deleting the addition of Rs. 368,79,26,000/- on account of transfer pricing Adjustments ? 1(b) Whether on facts and in circumstances of the case and in law the Tribunal was right in rejecting the contention of the TPO that the non AE transactions are always undertaken at Arms Length Price, hence, the Arms Length margin of 17.48% needs to be applied to the non A.E. transactions as well, and hence, the computation of Arms Length Price by the TPO rightly falls beyond the safe harbour limit of +/- 5% ? 1(c) Whether on facts and in circumstances of the case and in law the Tribunal was right in holding that bench ....

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....tances of the case and in law the Tribunal was right in directing to allow the set off of brought forward depreciation losses of amalgamating company for the Assessment Years 1996-97 and 1997-98 i.e. for the period prior to amendment in sub section (2) of Section 32 of the Act w.e.f. 1/4/2002 ?" 3. Regarding question no.1(a), 1(b) and 1(c) : (a) Mr. Pinto, learned counsel for the revenue states that all the three questions deal with the issue of justifiability of application of Arms Length Price (ALP) only to A.E. transactions and not to all transactions. Mr. Pinto further very fairly states that the issue raised herein with regard to transfer pricing adjustments stand concluded against the revenue and in favour of the respondent - asses....

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....al has followed the binding decision of this Court, question nos. 2 and 3 as formulated does not give rise to any substantial question of law. Thus not entertained. 5. Regarding question Nos.4 and 5: (i) The grievance of the appellant is that payment made to the suppliers for termination of arrangement/contract for supply of sugar candy, tooth paste and shampoos in fact is capital in nature but yet the impugned order allowed the same as revenue under Section 37(1) of the Act. (ii) The Assessing Officer and the Dispute Resolution Panel (DRP) both took a view that the payment made to the suppliers on termination of the contract was on capital account. For this, the test of enduring benefit was applied i.e. this payment would avoid future l....

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....not correct/justifiable in the present facts. Therefore, in the absence of any contrary narrative being urged before us, it must follow that the view taken by the Tribunal on facts before it that the expenditure was incurred on account of the commercial expediency and same is eligible to deduction under Section 37(1) of the Act, is a possible view. (vii) Accordingly, the question no.4 and 5 do not give rise to any substantial question of law. Thus not entertained. 6. Regarding question No.7 : (a) The impugned order of the Tribunal has allowed the respondent - assessee's appeal on the issue of allowing unabsorbed depreciation pertaining to Assessment Year 1996-97 and 1997-98 which was carried forward to be set off in the subject Asses....