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2021 (9) TMI 1122 - AT - Income TaxDisallowance of bad debt written off - AO's contention is that such bad debts relate to the amalgamating company, i.e., Cadence AMS Design India Pvt. Ltd. and the provision for doubtful debts was to be allowed only in respect of the assessee and none else - HELD THAT:- DRP directed the ld. AO to verify the claim of the assessee regarding allowance for provision for doubtful debts in the case of amalgamating company in the earlier years and to verify the allowability of the same in the hands of the assessee in terms of the conditions laid down in section 36(2). Ld. Assessing Officer, however, apart from stating that income was booked in the account of another entity, i.e., Cadence AMS Design India Pvt. Ltd., which is not the assessee, does not give any reason, whatsoever, for making the relevant disallowance - direct the ld. Assessing Officer to verify the claim of the assessee regarding the disallowance of the provision for doubtful debts in the case of amalgamating company in the earlier years and if he finds them to be proper, allow the deduction in the hands of the amalgamated company. This ground is, accordingly, allowed for statistical purposes. Incorrect assessed income - AR prayed that directions may be given to the ld. Assessing Officer to dispose of the rectification application on due verification of the claim of the assessee in respect of the assessment of total income, non-grant of MAT credit and short grant of advance tax and TDS - HELD THAT:- DR fairly concedes that the matter may be sent back to the ld. Assessing Officer for taking a view while disposing of the rectification application. We, therefore, direct the ld. Assessing Officer to consider the grievance of the assessee in respect of the assessment of income at ₹ 1,15,72,72,280/- in the computation sheet instead of ₹ 1,11,96,13,210/-; in respect of grant of MAT credit; and in respect of short grant of advance tax and TDS. Accordingly, grounds allowed for statistical purposes. Education cess allowability - HELD THAT:- As assessee does not raise this issue at any stage before the authorities below. We, therefore, find force in the arguments of the ld. AR that this issue may be restored to the file of ld. Assessing Officer to take a view after giving opportunity to the assessee. Needless to say, the Assessing Officer shall give an opportunity to the assessee and take a view according to law. This ground is, accordingly, allowed for statistical purposes. Transfer pricing adjustment - bench marking of the interest outstanding on receivables - assessee entered into Bilateral Advance Pricing Agreement(BAPA) with CBDT on 03.03.2021 which covers the present assessment year and certain transactions (software development segment) and has already filed its modified return under section 92CD(1) on 28.06.2021 - HELD THAT:- As directions of ld. DRP were to calculate interest on net basis whereas the ld. TPO has ignored the amounts payable while doing the computation and if the net receivables are considered then no addition would arise - Learned DR fairly concedes the request of the assessee. We, therefore, set aside the impugned assessment order and direct the ld. Assessing Officer to take plausible view in compliance with DRP directions in the light of the decision of Hon'ble Delhi High Court in CIT vs. Kusum Health care [2017 (4) TMI 1254 - DELHI HIGH COURT] and also BAPA.
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