Case Law Details

Case Name : Ericsson India Pvt. Ltd Vs DCIT (ITAT Delhi)
Appeal Number : ITA NO. 5141/Del/2011
Date of Judgement/Order : 11/05/2012
Related Assessment Year : 2007-2008
Courts : All ITAT (4421) ITAT Delhi (982)

ITAT Delhi

Ericsson India Pvt. Ltd vs. DCIT

ITA NO. 5141/Del/2011

Assessment Year 2007-2008

Date of Order Pronouncement – 11/05/2012

There is no force in the Revenue’s claim that the assessee was not required to make any payment to its AE for resolving warranty claims. The assessee has the right to enter into an arrangement according to which its business interests are protected. It is the prerogative of the assessee to decide the business expediency.

Rule 10B(1)(a) does not authorize disallowance of any expendtture on the ground that it was not necessary or prudent for the assessee to have incurred the same or that in view of the expenditure was unremunerative or that in view of the continued losses suffered by the assessee in his business, he could have fared better had he not incurred such expenditure. However, the reasonableness of an expenditure has not been excluded from determination and the TPO has to determine the ALP of the transaction.

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Category : Income Tax (25488)
Type : Judiciary (10238)

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