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2017 (4) TMI 713 - AT - Income TaxAddition on account of reimbursement of expenses to AE as per order of Transfer Pricing Officer - invoking of section 40(a)(i) - Held that:- Section 40(a)(i) of the Act has been invoked to disallow the expenditure on the ground that the requisite tax has not been deducted. The plea of the assessee is that in the subsequent year the requisite tax has been deducted and, therefore, the expenditure may be allowed as deduction in the subsequent year. In view of the aforesaid submission, the action of the Assessing Officer in disallowing the expenditure in this year by invoking of section 40(a)(i) of the Act is hereby upheld and it is further directed that the claim of the assessee for deduction in the subsequent year be examined as per law. We find no reason to adjudicate on the controversy regarding determination of the arm's length price at nil, since it would make no difference to the assessed income, inasmuch as, the said expenditure is otherwise disallowable under section 40(a)(i) of the Act even going by the stand of the assessee. - Decided in favour of assessee for statistical purposes only. Disallowance under section 14A - investment made as a strategic investment in group companies - Held that:- The short point raised by the assessee is based on the decision of the Tribunal in the case of M/s. Dish TV India Ltd. vs. ACIT [2016 (12) TMI 1544 - ITAT MUMBAI] whereby it is canvassed that disallowance be recomputed by excluding the Strategic Investments made by the assessee in its subsidiaries. On this aspect, the Ld. Departmental Representative had no objection and accordingly, the matter is restored back to the file of Assessing Officer to re-work the amount disallowable under section 14A of the Act by excluding the value of Strategic Investments comprised in the total investments. Thus, on this aspect also assessee succeeds for statistical purposes.
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