Provision for consumer loyalty program was an allowable deduction u/s 37 and no TP adjustment as profits of eligible units were at arm’s length

Titan Company Ltd. Vs DCIT (ITAT Chennai)

Conclusion: Provision for customer loyalty points, computed on a scientific and consistent basis, constituted a present and ascertained liability deductible under Section 37(1). Disallowance u/s 14A was deleted since no exempt income was earned during the year. Regarding transfer pricing adjustment on 80IC claim, Tribunal held that once profits of eligible units were accepted at arm’s length, no further adjustment could be made to deny deduction.

Held: Assessee had entered into international transa

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