Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (12) TMI 724 - AT - Income TaxTP Adjustment - technical support services rendered by appellant to its overseas associated enterprise ('"AE") - comparable selection - HELD THAT:- M/s Acropetal Technologies Limited entity is not purely in the field of rendering ITES services. Its segmental results could not be relied upon which is evident from its financial statements. Therefore, it would not be a good comparable for the assessee. We direct for exclusion of this entity. M/s Coral Hub Limited (earlier known as Vishal Information Technologies Limited) entity has outsourced its services to outside vendors as against the fact that the assessee has rendered the services itself. The business model being different, the two entities could not be compared with each other. M/s Cosmic Global Limited excluded on account of functional dissimilarity in assessee’s own case for AY 2008-09 - We find that similar facts exist during the year. No change in the business model of this comparable entity has been shown before us. Therefore, we direct for exclusion of this entity on the ground of functional dissimilarity. Disallowance u/s 14A - assessee earned exempt dividend income and offered suo-moto disallowance in its computation of income - Non recording of satisfaction by AO - HELD THAT:- AO has not faulted with the suo-moto disallowance made by the assessee. The assessee estimated the same @60% of salary of two employees which were stated to be engaged in investment activity. - AO did not demonstrate as to how the said disallowance was inadequate. We find that it was incumbent for Ld. AO to record a satisfaction as to why the disallowance offered by the assessee was not sufficient and this said satisfaction was to be arrived at having regard to assessee’s books of accounts. The recording of the said satisfaction was sine qua non before proceeding to apply Rule 8D. Although there is no particular format or manner in which the satisfaction was to be recorded but at least the same should have been discernible from the order of Ld. AO. We find that there is no discussion whatsoever as to sufficiency or insufficiency of suomoto disallowance offered by the assessee. No fault has been pointed out in assessee’s methodology of arriving at the said disallowance. The application of Rule 8D was not mechanical. Therefore, the additional disallowance as made by Ld. AO in terms of Rule 8D was to be rejected rather the assessee’s suo-moto disallowance was to be accepted. Addition on account of TDS - Assessee claimed TDS credit - HELD THAT:- we find that petty differences have arisen in the account of various deductor. The unreconciled amount varies from as low as ₹ 20/- to as high as ₹ 6,72,400/-. However, as rightly pleaded by Ld. AR, the unreconciled amount could not be treated as unexplained income, keeping in view the fact that the assessee had reflected receipts far in excess of what was shown by the deductor in TDS data. Therefore, we accept the arguments raised by Ld. AR and delete this difference from the income of the assessee. This ground stand allowed. Short Grant of TDS - HELD THAT:- As assessee claimed TDS credit of ₹ 1621.95 Lacs in the computation of income, however, it has been granted credit of only ₹ 1532.97 Lacs. The same being matter of record & reconciliation, we direct Ld. AO to grant due TDS credit to the assessee as per law. This ground stand allowed for statistical purposes.
|