Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (4) TMI 1735 - AT - Income TaxTP Adjustment - AMP expenses addition - HELD THAT:- The issue is covered in favour of the assessee as per the Hon’ble Delhi High Court decision in the assessee’s own case [2015 (12) TMI 1333 - DELHI HIGH COURT] held it did not give rise to a dispute that there is no international transaction involving the Assessee therein and its AEs. In fact each of the Assessees were receiving subsidies/subventions from their respective AEs. The second factor taken note of by the Court is that as BLT was invalidated as a means of determining the existence of an international transaction, the onus was on the Revenue to show the existence of an international transaction. In the present case, the existence of such a transaction was ascertained only by applying the BLT. For the above reasons, the Court is satisfied that the case of the present Appellant would not stand covered by the decision in Sony Ericsson [2015 (3) TMI 580 - DELHI HIGH COURT] Question (i) is accordingly answered in favour of the Assessee and against the Revenue. Transfer pricing adjustment on account of royalty paid on sales to associated enterprises - HELD THAT:- As decided own case [2017 (5) TMI 469 - DELHI HIGH COURT] Referring to comparative clauses based on the agreement in the case of the assessee and its' sister concern were pari materia and-consequently the payments were revenue in nature. Disallowance of royalty and technical guidance fee, alternatively made under section 37(1) - HELD THAT:- Respectfully following the decision of the Hon'ble high court in assessee’s own case the disallowance under section 37 (1) on account of royalty and technical guidance fees cannot be upheld. Therefore ground of the appeal of the assessee is allowed accordingly. Double disallowance of Royalty - payment made by the assessee on account of royalty has already been disallowed by the TPO - HELD THAT:- As per the submissions of the Ld. AR, since the payment of royalty, to the extent of ₹ 76,96,000 has already been disallowed in the transfer pricing order, further disallowance to that extent has resulted in double disallowance of the same amount, which is impermissible under the provisions of the Act. Since the Royalty issue is already decided in ealier Ground this contention of the assessee is accepted. Disallowance of provision for service coupons - HELD THAT:- In the case of the appellant the provision of after sales services has also been made based on the past business history of the appellant and therefore, it cannot be said that it is made on arbitrary basis. Further the contention of the Id. AO is not correct stating that assessee claims excess expenditure in one year because in the year of sales itself assessee claims the expenditure related to sales and when the liability ceases on completion of time, same is reversed in the profit and loss account and offered as income. Therefore , we are of the view that claim of the assessee for deduction of after sales service expenditure is in accordance with Accounting standard 29 issued by the Ministry of corporate affairs which is mandatorily to be followed by the assessee, further quantification of such expenditure has been made on the basis of the past history. Disallowance of provision or warranty - HELD THAT:- The warranty provisons were disallowed in subsequent years for 1997- 98, 1998-99 & 2001-02 which was deleted by the Tribunal vide order dated 31/7/2006 since no disallowance of provisions for warranty was made in any of the preceding year and the said provision was consistently allowed by the Revenue due to the decision of the Tribunal. This issue is also covered in favour of the assessee. Ground Nos. 6 to 6.2 is allowed. Short credit of advance tax - HELD THAT:- It can be seen that short credit of advance tax was not at all verified by the Assessing Officer. Therefore, it will be appropriate to remand this issue to the file of the Assessing Officer for further verification. Needless to say, the assessee be given full opportunity of hearing by following principals of natural justice. Ground is partly allowed for statistical purpose.
|