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2018 (6) TMI 279 - AT - Income TaxDisallowance of provision for legal and professional charges - TDS provision adherence - Held that:- Parties have been identified - thus the matter needs to be adjudicated afresh hence we restore the matter to the files of the A.O. -the A.O. shall look into the party-wise details of the provision created for software development and testing charges and shall also examine whether the TDS provision has been duly complied with - A.O. shall take a decision after affording a reasonable opportunity of hearing to the assessee. Disallowance under section 36(1)(va)on late payment of employees’ contribution to PF and ESI - Held that:- Contribution towards PF and ESI u/s 36(1)(va) cannot be allowed as a deduction if the said payment has been made after the due dates specified under the respective statutes - this ground of assessee is dismissed. Travelling and accommodation expenses on behalf of its AEs - Held that:- Expenses were incurred by the assessee on behalf of and for the benefit of its AEs and thus would come within the meaning / explanation of international transaction in section 92B - hence AO cannot impute interest on balance outstanding from its AEs. As regards the claim of the assessee that a period of six month should be considered as reasonable for making recovery of cost incurred by it from the AE, we are of the view that such a plea cannot be entertained - A period of 60 days is reasonable period within which the expenses ought to have been recovered by the assessee from its AEs - thus AO is directed to impute the interest on the outstanding amounts for a period exceeding 60 days at any point of time during the year in consideration Adoption of rate of interest - Held that:- Since the expenditure has been incurred in Indian currency and not in dollars thus adoption of LIBOR is rejected - weightage average interest of SBI-PLR on FDs has been worked out by the DRP at 8.15%. We are of the considered view that only 8.15% should be adopted while calculating ALP interest on the amounts outstanding from the assessee’s AEs.
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