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2017 (2) TMI 1471 - AT - Income TaxTP Adjustment - comparable selection - HELD THAT:- TCS e-Serve Limited - Following the turnover filter as well as taking note of the fact that it owns and possesses brand value and intangibles as compared to the assessee which does not own such assets, we direct that this company be excluded from the list of final comparables. M/s. E-clerx Services Ltd is to be excluded on the ground that it is a KPO. M/s. Infosys Ltd to be excluded on exceptional circumstance and dissimilar functionality and operating in a different business strategy as relying on M/s Hyundai Motors India Engineering P. ltd [2015 (11) TMI 1648 - ITAT HYDERABAD] Disallowance of an amount towards TDS payable on contracts and towards salaries invoking the provisions of Section 43B - HELD THAT:- Disallowance made by the AO is not according to the provisions of law. The TDS if any not paid or short paid, the same can be recovered by separate proceedings but the same cannot be disallowed u/s. 43B, as the said TDS is not allowable deduction to assessee. It is out of the payments payable to contractors/salaries, TDS is being deducted on behalf of the government. Since the TDS amount itself is not a claim made u/s. 37(1), disallowance of the same does not arise. AO is directed to delete the same. Interest on short term deposit - contention of the Ld. Counsel that the amount as shown in Form 26AS was only ₹ 4,05,38,239/-, whereas assessee offered ₹ 4,09,27,183/- which was more than amount shown in Form 26AS - HELD THAT:- We have examined the petition u/s. 154 filed before the AO as well as the contentions before the DRP and the copy of the Form 26AS filed before us at page 76. The basis for the AO’s observation of higher amount is not forthcoming from the record. In spite of direction from the DRP, AO has not followed the verification or the petition u/s. 154 was disposed-off. We are of the opinion that there is no basis for making such addition, after verification of the details filed by the assessee. Accordingly, AO is directed to delete the amount. Short TDS credit - HELD THAT:- Assessee claimed an amount of ₹ 67,79,643/- in the return of income, whereas the AO allowed only ₹ 63,27,723/- in the final order without giving any basis for the same. AO is directed to verify the record and allow the claim after due verification. Ground is allowed for statistical purposes. Disallowing the claim of set off of brought forward losses - HELD THAT:- There is no discussion in the order about the set off of losses and inspite of directions from the DRP, the same were not allowed. Ld. Counsel fairly admitted that these losses are subject to the orders in earlier years, accordingly, we direct the AO to verify the past record and determine the losses to be brought forward and allow the set off as per the provisions of law. Ground is considered allowed. Levy of tax and interest on distributable profit u/s. 115-O - HELD THAT:- There is no basis for levy of interest on the amount as was done by the AO. Even if one day is excluded, then, the period of payment will be within the statutory provisions as provided. Further, as seen from the part B of Form 26AS placed on record, it indicate that amount of ₹ 5,77,830/- pertains to dividend tax was remitted on 6th January, 2010 itself. Since the payment was within the limits as provided, question of levy of interest does not arise. Accordingly, ground of assessee is allowed. AO is directed to withdraw the levy of taxes and interest. Levy of interest u/s. 234A, 234B & 234C - HELD THAT:- Inspite of specifically bringing it to the notice of the AO by way of an application u/s. 154 filed on 28th January, 2015, AO has not taken any steps to examine nor withdraw the interest so levied. Since the return filed was with in the due date, we are of the opinion that interest u/s. 234A is not leviable. With reference to other interests, AO is directed to examine whether any interest is leviable as per the provisions of the Act, after giving due credit to the taxes paid/claimed. This aspect should be examined by the AO in detail and if any interest is to be levied, the working should be provided so that assessee can have knowledge of the same, so as to contest if required. With these observations, the ground is considered allowed for statistical purposes.
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