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2019 (1) TMI 1951 - AT - Income TaxTP Adjustment - applicability of MAP proceedings to non-US - applicability of percentage of same margin for remaining transaction - HELD THAT:- As considered MAP proceedings and resolutions and the judicial decision and working procedure are in agreement with the submissions made by the learned AR on this issue for applicability of some margin be applied for remaining 16% of the transactions of the assessee and accordingly this ground of appeal of the assessee is allowed for statistical purposes. We direct the TPO accordingly. Lease on equipment being capital in nature - AR could not substantiate with any evidence that the transaction is non-financial lease and on perusal of the agreement as referred to by the assessee, it is in the nature of financial lease and even before us no evidence has been filed to substantiate that it is not a transfer of asset from the beginning to end of the period of lease. We found that the assessee, as per the financial lease agreement, has an option to purchase the asset on completion of term and on this aspect, AO has to consider. Therefore, we consider it appropriate to remit this issue to the AO for verification of financial lease agreement and also assessee shall file tripartite agreement in respect of lease. Reimbursement of salary expenses on employees - Assessee, as per audit accounts for the said accounting year referred at page 528, the managing director has been a signatory and the assessee undertakes to file Form No. 32 and Board Resolution to that effect. Further, after hearing for a long time, the learned DR has brought to the notice of the bench that this issue was referred to Special Bench whereas we, accept the decision of the special Bench in particular to this case - CIT(A) also made observations that the assessee has not substantiated before lower authorities about appointment of managing director with any evidence and further we are of the substantive opinion that the matter was referred to Special Bench, But the facts have not been verified by the AO in respect of managing director. Therefore, both the parties have agreed for the same and there is no loss of revenue to the department, if the matter is restored to the file of the AO for verification and examination and by that time we are of the considerable hope that the decision of the special bench also be available to the AO - we are of the substantive opinion that the matter is restored to the file of the AO as agreed by both the parties for verification and examination and the assessee shall co-operate in submitting information as expeditiously as possible. SAP implementation charges - We are of the opinion that when the project is not implemented and there is no expenditure claimed, such type of expenditure shall not be clubbed with revenue expenditure without matching concept of income and expenditure is applied. Therefore, the claim of the assessee on this aspect cannot be considered and we confirm the action of the CIT(A) on this ground and dismiss the ground of appeal. Non-deduction of TDS u/s 194J - Fee for providing internet / broadband facility - HELD THAT:- Assessee has simply obtained broadband / Internet facility from the service provider M/s. Tata Indicom. It is not a case where a service contract has been entered into. The facility is open to all and sundry and any member of the public can avail of it. In such circumstances, the view of the AO that the nature of service rendered as an element of implicit contract is struck down and therefore, the addition cannot be sustained in first appeal.
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