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2023 (5) TMI 458 - AT - Income TaxDenial of relief u/s.10AA - AO rejected both the claims on the ground that the assessee has failed to comply with various conditions prescribed in those sections for allowing deduction - HELD THAT:- Considering the relevant findings of the coordinate bench of the Tribunal in assessee’s own case for AY 2013-14 [2020 (8) TMI 196 - ITAT BANGALORE] it is clear that the Tribunal has rejected all the contentions of the revenue with regard to the alleged violations and restored the issue only with respect to verification of receipts of sale proceeds in convertible foreign exchange into India. For the year under consideration, it is noticed that the AO has verified these details and has given a clear finding in final assessment order, though he has not reworked the relief u/s.10AA. As relying on decision of the Tribunal in assessee’s own case, we allow deduction u/s.10AA to assessee relatable to sale proceeds from export of software development services. AO is directed to compute the relief u/s.10AA and deleted the addition accordingly. This ground is allowed in favour of the assessee. Payments made to AEs and third parties without TDS - assessee submitted before the AO that these are payments towards cost to cost reimbursements and other payments on which there is no liability to deduct tax - HELD THAT:- We notice that the co-ordinate bench in AY 2013-14 [2020 (8) TMI 196 - ITAT BANGALORE] has remitted the entire issue of reimbursements to AEs and third parties to the file of Ld DRP and respectfully following the same we restore the issue for the year under consideration with similar directions. With regard to the reimbursement of secondment cost to the AEs Tribunal in the case of M/s. Goldman Sachs Services Pvt. Ltd vs DCIT [2022 (4) TMI 1444 - ITAT BANGALORE] had held that the reimbursement made by the assessee in India to overseas entity, towards the seconded employees cannot be regarded as “Fee For technical Services”. Therefore the DRP while considering the issue of assignee fees reimbursements is directed to consider the decision of Goldman Sachs Services Pvt. Ltd (supra). Needless to say that the assessee be given an opportunity of being heard. It is ordered accordingly. Disallowance of ESOP expenses - HELD THAT:- We notice that the coordinate bench in assessee’s own case for AY 2015-16 [2022 (2) TMI 1367 - ITAT BANGALORE] held that the ESBP expenses incurred by the assessee is and allowable expense and the disallowance is hereby deleted. TP Adjustment - adjustment towards Advertisement and Marketing (AMP) expenses - HELD THAT:- For the year under consideration, the DRP has given a finding that the assessee has not furnished any documentation with regard to the various pleas such as AMP expenses pertain to respective segments etc. Therefore respectfully following the decision of coordinate bench on assessee’s own case for AY 2015-16 [2022 (2) TMI 1367 - ITAT BANGALORE] we remand this issue to the AO/TPO to verify the aspect based on the documents/evidences submitted by the assessee with similar direction that in the event it is found that the expenditure is factored in net cost for computing margin, no separate adjustment needs to be made. Accordingly, this ground of appeal stands allowed for statistical purposes. Refund of excess Dividend Distribution Tax (DDT) paid - AR submitted that the Assessee is a subsidiary of IBM WTC which is a tax resident of the United States and 99.99% of the equity shares of assessee are held by IBM WTC - HELD THAT:- AR in support of reasoning, relied on a decision of Giesecke & Devrient India Pvt Ltd [2020 (10) TMI 750 - ITAT DELHI] but correctness of the aforesaid decision has been doubted by another Division Bench at Mumbai in the case Tata Oil India (P) Ltd. [2021 (6) TMI 855 - ITAT MUMBAI] and an order of reference recommending constitution of a Special Bench to decide the issue has been made to the Hon’ble President of the Tribunal. We find that on this issue, there has been conflicting views and the matter has been referred by the Mumbai Bench of ITAT for constitution of a larger Bench. We are of the view that it would be just and appropriate to set aside this issue to the AO for consideration afresh in the light of the law and the outcome of the decision of larger bench on the issue after affording the assessee opportunity of being heard.
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