Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (8) TMI 724 - AT - Income TaxTP Adjustment - Delay in receipt of receivable from associated enterprise - HELD THAT:- In the present case the assessee has been granted the working capital adjustment while computing the arm’s-length price of the international transaction of the sale of services, according to us no separate benchmarking should be done of the outstanding receivable as outstanding receivable are part of the working capital of the assessee. Further the issue is squarely covered in favour of assessee by the decision of the honourable Delhi High Court in case of Principal Commissioner Of Income Tax Versus Kusum Healthcare Private Limited [2017 (4) TMI 1254 - DELHI HIGH COURT]. Therefore ground number two of the appeal of the assessee is allowed and learned transfer pricing officer/learned assessing officer are directed to delete the addition in relation to the delay in receipt of receivable from associated enterprise. Depreciation claimed at the rate of 60% on voice recording software licenses - HELD THAT:- Respectfully following the decision of the coordinate bench in assessee’s own case [2017 (8) TMI 225 - ITAT DELHI] we direct the learned assessing officer to grant assessee depreciation on the above software at the rate of 60% as relying on CIT Vs BSES Yamuna Powers Ltd.[2010 (8) TMI 58 - DELHI HIGH COURT] Disallowance u/s 14A read with rule 8D - no satisfaction was recorded by the assessing officer having regard to the accounts of the assessee - HELD THAT:- AO failed to record any satisfaction with regard to the correctness of the claim of the assessee that it has not incurred any expenditure. AO did not cite any of the expenditure in the profit and loss account of the assessee, which is incurred by the assessee for earning of the exempt income. The satisfaction of the learned assessing officer as provided u/ss 2 of Section 14 A is a preliminary requirement for invoking the provisions of rule 8D of the income tax rules for making a disallowance u/s 14 A - in absence of any satisfaction recorded by the learned AO with respect to the examination of the books of account of the assessee to verify the correctness of the claim of the assessee, the disallowance u/s 14A cannot be sustained. Accordingly we direct the learned assessing officer to delete the disallowance MAT Computation for disallowance u/s 14A - HELD THAT:- We direct the AO to exclude the amount of adjustment made u/s 14A of the Act r.w. Rule 8D of the Income Tax Rules, 1962 while computing the book profits u/s 115JB of the Act - See VIREET INVESTMENT (P.) LTD. [2017 (6) TMI 1124 - ITAT DELHI] Short deduction of TDS - Addition u/s 40 (a) (ia) - facility maintenance advertisement and tour and travel for the reason that assessee has deducted tax at the source at the rate of 1 % instead of at the rate of 2% - HELD THAT:- Here the facts stated before us undisputedly shows that the assessee has deducted tax on the above sum the rate of one percent instead of 2% as held by the assessing officer. Therefore there is no failure of non-deduction of tax. If there is any offence or violation it is deduction of tax at lower rates compared to what is prescribed. The issue is squarely covered in favour of the assessee by the decision of the honourable Calcutta High Court in CIT versus SK Tekriwal [2012 (12) TMI 873 - CALCUTTA HIGH COURT]. In view of this ground of the appeal is allowed. Disallowance of deduction u/s 10 A/10 B on account of income arising from sale of scrap - HELD THAT:- As noted from the assessment order that the learned assessing officer has treated this income from sale scrap as business income and not income from other sources. Therefore, it is profits of the business of the undertaking that are considered by the learned assessing officer himself. According to this, subsection 4 of Section 10 B the profit derived from export of article or things or computer software shall be the amount which bears to the profits of the business of the undertaking in the same proportion as the export turnover in respect of such article or things or computer software bears to the total turnover of the business carried on by the undertaking. According to that provision profits of the business of the undertaking is required to be computed and thereafter the deduction is required to be granted in proportion to the export turnover to total turnover. For this reason, also we do not find any infirmity in the order of the learned dispute resolution panel giving direction to the learned assessing officer to delete the above disallowance. Accordingly, ground number 1 of the appeal of the learned assessing officer is dismissed. Disallowance of depreciation on goodwill - asset purchase agreement dated 4/11/2009 and its subsequent amendment with American Express India private limited to acquire the global travel service centre as a going concern for a lump sum consideration - HELD THAT:- As stated by us earlier that this issue is not a new as the claim of the depreciation on the goodwill has already been allowed to the assessee in assessment year 2010 – 11 by the coordinate bench. Therefore respectfully following the decision of the coordinate bench in assessee’s own case, we dismiss this ground of appeal. Disallowance of referral pay - assessee has failed to furnish evidence in respect of the services rendered - According to the learned dispute resolution panel the above expenditure is allowable u/s 37 (1) - HELD THAT:- No infirmity in the order of the learned dispute resolution panel because such expenditure was incurred by the assessee for the purpose of recruitment of its own employees. The payment for such referral was made to the employees of the company who were existing and who referred new employees. Therefore, the above expenditure is incurred wholly and exclusively for the purposes of the business. In view of this ground number, three of the appeal of the learned assessing officer is dismissed.
|