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2021 (4) TMI 1361 - AT - Income TaxDisallowance of depreciation on assets given under finance lease - HELD THAT:- This Tribunal in assessee’s own case for assessment year 2011-12 and 2013-14 [2019 (6) TMI 660 - ITAT BANGALORE] considered similar issue by following decision of Hon’ble Supreme Court in case of ICDS vs CIT [2013 (1) TMI 344 - SUPREME COURT]. Subsequently, for assessment year 2014-15 [2020 (6) TMI 98 - ITAT BANGALORE]and for assessment year 2012-13 in [2020 (10) TMI 1352 - ITAT BANGALORE], this Tribunal had remanded the issue back to ld. AO for fresh decision after verifying if the terms and conditions mentioned in the lease agreement are similar to the terms and conditions that are mentioned by Hon’ble Apex Court in case of ICDS vs CIT (supra). As directed by this Tribunal that in the event there is no material variation in the context, then depreciation must be granted to assessee as claimed. As the department has not been able to bring out any factual difference for the year under consideration vis-à-vis the preceding assessment years, we also remand this issue back to the Ld.AO with similar direction. Not allowing set off of brought forward depreciation loss - HELD THAT:- We note that, as the OGE to the orders passed by this Tribunal in the preceding assessment years are pending with Ld.AO, the relief granted by this Tribunal was not available with the Ld.AO while passing the impugned order for year under consideration. It is noted that the ld. AO does not dispute regarding availability of set off of brought forward loss to assessee if any in the preceding year while computing income for the year under consideration. Therefore, set off of brought forward losses is to be granted, if there is loss for assessment years 2008-09, 2009-10 and 2013-14, after passing the OGE to the orders of this Tribunal for assessment years 2008-09, 2009-10 and 2013-14. Direct the Ld.AO to pass the order giving effect to all the previous years from assessment year 2008-09 to assessment year 2014-15 and thereafter to provide the set off of brought forward losses. TP addition - specified domestic transaction within the ambit of section 92B - re-characterisation of payment made towards administration and support services by assessee to Cisco India - Scope of omitted provisions - HELD THAT:- On combined reading of the omitted provisions and the inserted proviso to section 40A, it is amply clear that the new proviso to section 40A is a saving clause by virtue of which, any specified transaction on or before 01.04.2016 has to be tested as per the provisions of section 92C. We therefore respectfully following the ratio laid down by Hon’ble Supreme Court in case of Kolhapur Canesugar works Ltd. [2000 (2) TMI 823 - SUPREME COURT] and General Finance Co. [2002 (9) TMI 3 - SUPREME COURT] hold that as the transaction under consideration is prior to 1/04/2016, has to pass through the tests laid down under the Transfer Pricing provisions. Assistance staff for administrative support services and marketing and sales support services - whether assessee could have deployed its own employees for the day to day administrative functions and marketing services on its own? - assessee purchases goods from its AE which is sold to third-party customers who approach assessee for financial assistance for purchasing Cisco equipments. As assessee do not have its own staff, Cisco India provides administrative support services and marketing and sales support services - HELD THAT:- The transaction needs to be bench marked separately and there has to be a segregation based on the customers who approach assessee for financing/leasing after entering into agreement with the AE, and the leasing/financing activity that assessee has with the third-party customers independently. In our view, only such services that assessee is rendering to third-party for assisting them in financing/leasing, wherein the third-party directly enter into agreement with the AE could be considered to be interlinked with the international transaction entered into by assessee with its AE. Assessee has been carrying out these activities in a bundled format in the preceding years which has not been objected by the Ld. TPO/AO. Further that all these expenses incurred by assessee towards administrative expenses and sales and marketing expenses stands subsumed in the operating expenses under TNMM for computing the arm’s length margin of the international transaction, a separate benchmarking may not be necessary. However all these things deserves verification at the end of Ld.AO/TPO. AO/TPO shall verify the transactions as indicated hereinabove. In the event the expenses are subsumed under TNMM we do not find any necessity for a separate benchmarking.
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