Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (7) TMI 254 - AT - Income TaxReference to TPO - reasons to refer - Held that:- There is no requirement for furnishing the reasons to the assessee for referring the matter to the TPO. However, as per Section 92CA(2) of the Act the TPO has served the notice to the assessee before making any adjustment in the ALP. The fact for giving the opportunity of being heard is very much recorded in the order of the TPO. From a plain reading of the Section, we find that the AO for referring the matter to TPO should consider whether it is necessary or expedient so to do and after approval from the competent authority. But it is not AO’s obligation to communicate to the assessee what makes AO to make necessary or expedient to refer the matter to TPO. As such we find that there is no requirement for furnishing the reasons to the assessee for referring the matter to the TPO. In this background of the case, we uphold the order of Ld. CIT(A). Hence, this ground of appeal of the assessee is dismissed.- Decided in favour of revenue Working of the assessee for the determination of ALP with its AE in relation to the export of goods disregarded - Held that:- Transfer Pricing Officer has taken sufficient time while preparing arms length price in respect of the enterprise transaction. Since the main contention of the assessee is that the Transfer Pricing Officer has not given sufficient opportunity we are of the considered view that the matter may be set aside to the file of the AO with the direction to obtain fresh report from the TPO and the TPO is directed to re-compute the transfer price after giving reasonable opportunity of being heard to the assessee. Benefit of +/-5 % for the computation of ALP disallowed - Held that:- Similar issue was also raised by the assessee in its own appeal in previous ay wherein held that when only one price has been determined under (most appropriate method) for evaluating arms length price, the question of applicability of proviso 2 of section 92C(2) does not arise. Therefore assessee, was not entitled to the concession of plus or minus 5% as prescribed in the said provision - Decided in favour of revenue Addition u/s 41 - CIT(A) confirming the order of the AO by treating the payment of deferral sales tax loan at its Net Present Value (for short NPV) as remission of trading liability and treated the same as income under Section 41(1) - Held that:- The provisions of Section 41(1) of the Act does not attract to the assessee. In the instant case, as per the scheme he was allowed to retain the sales tax as determined by the competent authority and pay the same 15 years thereafter. The tax collected was deemed to have been paid and, therefore, the tax so collected cannot be construed as income in the hands of the assessee. The tax so retained by the s is in the nature of a loan given by the Government as an incentive for setting up the industrial unit in a rural area. The said loan had to be repaid after 15 years. Again it is an incentive. However, by a subsequent scheme, a provision was made for premature payment. When the assessee had the benefit of making the payment after 15 years, if he is making a premature payment, the said amount equal to the NPV of the deferred tax was determined at ₹ 4,25,79,684/- and on such payment the entire liability to pay tax/loan stood discharged. Again it is not a benefit conferred on an assessee. Therefore, Section 41(1) of the Act is not attracted to the facts of the present case. - Decided against revenue Addition on account of treating the lease rental as capital in nature - Held that:- Similar issue for the AY 2003-04 was allowed in favour of revenue by this Hon’ble Bench of Kolkata in assessee’s own case - Decided in favour of revenue Addition on account of bad debts written off in the books - Held that:- AO disallowed the bad debts on the ground that the assessee failed to provide the details when such bad debts were taken in the income of the assessee. But the Ld. CIT(A) has given the relief to the assessee on the basis of first appellate order of the immediately preceding assessment year i.e. 2003-04. However the same order was challenged and restored to AO for fresh adjudication.The decision of the AO as discussed aforesaid for restoring the matter has not been brought to our notice. Besides for the year under consideration, the assessee has submitted several details for writing off the bad debts are given on pages 200 to 231. However we find in many cases the details for treating the bad debts as income in the earlier years were not given. Therefore in view of above we are inclined to restore the matter to the file AO for fresh adjudication as per law and assessee is also at liberty to file the additional evidences in support of its submissions accordingly.- Decided in favour of revenue for statistical purpose.
|