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2015 (9) TMI 1175 - AT - Income TaxDisallowance invoking section 40(a)(i) - non deduction of TDS on such payments made to its associated enterprise, UPSWWF USA - Held that:- Similar issue had come up before the Tribunal in assessee’s own case for A.Y.2008-09 [2015 (6) TMI 383 - ITAT MUMBAI] and the matter has been remanded back to the file of the Assessing Officer for a decision afresh. It was also a common point between the parties that in this year too, following the said precedent the matter be remanded back to the file of Assessing Officer for a decision afresh in accordance with law. - Decided in favour of assessee for statistical purposes. Disallowance of depreciation on fixed assets purchased from UPS-WWF in the previous year relevant to the assessment year 2008-09 - Held that:- The claim of the Ld. Representative for the assessee was that the depreciation claimed by the assessee in this year deserves to be allowed since the depreciation on the same assets in the earlier assessment year stands allowed. The aforesaid factual matrix is not assailed by the Ld. Departmental Representative and the same is also borne out of the order of the Tribunal for A.Y.2008-09 [2015 (6) TMI 383 - ITAT MUMBAI]. As a consequence, we uphold the plea of the assessee and direct the Assessing Officer to allow the depreciation of ₹ 9,95,919/- claimed by the assessee and accordingly assessee succeeds on this ground. - Decided in favour of assessee. Addition u/ s. 40(a)(i) - whether assessee and RMS were in contractural relationship - Held that:- Assessing Officer in the draft assessment order, we find that the decision of the DRP cannot be faulted. It is also noticed that the Assessing Officer has invoked section 40(a)(i) of the Act on the basis of his stand for earlier assessment year 2008-09 [2015 (6) TMI 383 - ITAT MUMBAI]. The Tribunal in its order for assessment year 2008-09 considered similar transaction and held that the payments made to RMS-USA for Debtor collection services did not fall for taxation in India and thus, there was no obligation on the part of the assessee to deduct tax at source on such payments, which were made as reimbursement to UPSWWFUSA. Be that as it may, in our considered opinion the finding of the DRP, which we have adverted to in the earlier paras is quite unexceptional and does not require any interference from our side. No cogent reasoning or material has been brought out by the Revenue to demonstrate as to in what manner amount received by RMS-USA, a non-resident, for Debtor management services abroad is liable to be taxable in India. Therefore, we hereby affirm the conclusion of the DRP on this aspect and Revenue fail in its Ground of appeal - Decided in favour of assessee. Direction of DRP to determine the quantum of Transfer Pricing (TP) adjustment while computing the arm's length price of the international transactions entered into by the assessee with its associated enterprise - Held that:- the Ground of appeal raised by the Revenue. At the outset, one may observe that the Ground raised by the Revenue is quite misconceived in as much as it is based on a wrong perspective to the effect that the DRP has held the subvention income to be an operating income. As can be seen from the directions of the DRP, the subvention income has not been held to be considered as part of the operating income. Thus, this aspect of the controversy manifested in the Ground of Revenue is misconceived and liable to be dismissed. Even otherwise, we find that there is no scope for any intervention in the directions of the DRP, which we have extracted above, as the same are quite apt and the same are factually borne out of the record. The order of the DRP on this aspect is hereby affirmed and accordingly Revenue fails in its Ground - Decided against assessee.
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