Held, that the assessee had availed of the engineering services and administrative support services from its associated enterprise according to the service agreement on June 23, 2006 entered into between the assessee and its associated enterprise for which the assessee incurred the expenditure. The expenditure had been incurred against invoices raised by the recipient associated enterprise which had also been examined during the course of transfer pricing proceedings. There was no doubt that the expenditure had been incurred for the purposes of the assessee’s business carried on by the assessee and that it was commercially expedient as well. The objections raised by the Dispute Resolution Panel had been met by the assessee with cogent reasons given therefor. Therefore, the addition by way of transfer pricing adjustment was not called for. The Assessing Officer is directed  to delete the addition and modify the assessment. The principle of commercial expediency cannot be ignored and must be judged in the context of current socio-economic thinking. In deciding whether a payment was made for purposes of business, the correct approach would be to see whether it was made on grounds of commercial expediency.  (AY. 2007-08)