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2019 (1) TMI 269 - AT - Income TaxDeduction u/s 80IA - relief on account of transfer of power price for the purpose of deduction u/s 80IA - not allowing the benefit of downward adjustment as provided in the proviso of Section 92C - Held that:- The Revenue authorities reduced the selling price of power even as well as increased the expenses towards the claim of deduction u/s 80IA(8) instead of reducing the claim u/s 80IA(8) of the Act. To arrive at this conclusion, none of the authorities have given any plausible explanation in the orders. The Assessing Officer/TPO while not allowing the benefit of downward adjustment as provided in the proviso of Section 92C of the Act from the Arm's length price, has not given any reason while making this addition. This addition is based on presumption and assumption which is not permissible under the Income Tax Act, 1961. Addition on account of managerial remuneration - Held that:- The comparison done by the Assessing Officer between the remuneration paid by the assessee company to Ms. Shallu Jindal with the remuneration paid by Essar Steel Ltd to Sh. Ashutosh Agarwala is not proper as well considering the facts that the assessee company is a profit making venture whereas Essar Steel Ltd. is incurring losses. It should also be noted that the assessee company has also complied with all the provisions of the Companies Act, 1956, relating to the payment of managerial remuneration to its managerial personnel appointed and the said payment of managerial remuneration has also been approved by the Board of Directors. The reference made to Circular No. 6P dated 08.07.1968 issued by the CBDT is apt in the present case. Thus, the Assessing Officer was not correct in making addition on account of managerial remuneration. Allocation of common expenses u/s 80IA - Held that:- From perusal of the Assessment Order/Order of the TPO/Directions of the DRP, in the present case none of the authorities have doubted that there was no expenses. In facts, the Assessing Officer/TPO/DRP re-allocated the expenditure in the ratio of turnover between eligible and non-eligible units without bringing into the light the flaw or inaccuracy or any suitable explanation involved in relation to the method of allocation adopted by the assessee company Bank Guarantee commission addition - Held that:- DRP has directed to delete the bank guarantee commission and without appreciating the same, the Assessing Officer made an addition which is unsustainable. Therefore, we direct the Assessing Officer to comply with the directions of the DRP and grant the relief to the Assessee. Depreciation charged by the assessee in respect of electrical installation - Held that:- This issue is covered in assessee’s own case and the DRP also directed to delete said addition. Without appreciating the same, the Assessing Officer made an addition which is unsustainable. Therefore, we direct the Assessing Officer to comply with the directions of the DRP and grant the relief to the Assessee Allowability of CSR expenses - non business expenses - Held that:- Insertion of Explanation 2 to section 37(1) is applicable w.e.f. 1.4.2015 and thus, the said provision will not be applicable in the present case. There is no dispute that the expenses in question are not incurred under the statutory obligation. The Assessing Officer disallowed the claim of CSR expenses without disputing the factual matrix or bringing on record any adverse material which can be seen from the Assessment Order. Thus, this disallowance does not survive. Difference on account of 26AS - Held that:- AR pointed out that the difference on account of 26AS the assessee has already made the submission after reconciliation which has not been appreciated. There is no proper finding to that effect in the Assessment Order, therefore, it will be appropriate to remand back this issue to the file of the Assessing Officer for proper adjudication - Appeal of the assessee is partly allowed for statistical purpose.
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