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2022 (3) TMI 649 - AT - Income TaxDepreciation on plant and machinery - AO pursuant to the directions of D.R.P. has disallowed depreciation on plant and machinery on the ground that the plant and machinery were installed at customer's premises and hence were not 'put to use' in the business of the assessee - HELD THAT:- The issue of depreciation on assets installed at customer's premises, was decided in favour of the assessee by the Kolkata Bench of Tribunal in assessee's own case for A.Y. 2008-09 [2017 (4) TMI 446 - ITAT KOLKATA] wherein as held installation of equipments in the client's premises of assessee's equipments was necessary and part and parcel of nature of business carried on by the assessee. It cannot therefore be said that the equipments in question had not been used for the purpose of the business of the assessee. The fact that the equipments were used in the business premises of the clients cannot be the basis to disallow the claim of the assessee for deduction on account of depreciation. - Decided in favour of assessee. TP adjustments should be restricted to the value of the international transactions only. See NALCO WATER INDIA LIMITED[2019 (9) TMI 609 - ITAT PUNE] Erroneous computation of transfer pricing adjustment in the manufacturing segment - Selection of comparable - HELD THAT:- Neither the assessee nor the T.P.O. applied any such filter at the time of the Transfer pricing study or the TP assessment. The selection of 18 comparables by the TPO is without any such filter. We appreciate that there is a marked difference in the profit earned from export and domestic sales of similar goods because of foreign market conditions and export incentives allowed by the Government of India. In such a scenario, some sort of export to sales filter is warranted. There is no foundation for the assessee seeking 15% filter of export sales to total sales of the segment. In fact, there is no statutory mandate of any specified percentage. Giving due importance to this filter in the facts and circumstances of the extant case, we are of the considered opinion that filter of 25% of export sales to sales of the segment will be in order. We order accordingly. Our view is fortified by the judicially accepted related party transactions (RPT) filter of 25% in several cases. Both the sides agreed to such a filter during the course of hearing. We, therefore, set aside the impugned order and remit the matter to the file of the AO/TPO to undertake the selection of comparables afresh in the light of the above filter and re-adjudicate the issue as per law after complying with the principles of natural justice. Therefore, ground No. 4 is allowed for statistical purposes. Erroneous determination of A.L.P. of intra-group service fee as NIL - HELD THAT:- As decided in own case [2016 (3) TMI 639 - ITAT KOLKATA]We are of the view that the first ground for confirming disallowance by CIT (A) that no independent documentary evidence had been furnished by assessee to show that the fact of actual services having been rendered to assessee and Nalco Pacific too could not substantiate the claim for provision of actual services with documentary evidence, has no leg to stand. Benefit of +/-3% range as per the proviso to sec. 92C(2) of the Act should be granted while calculating the transfer pricing adjustments, if any. Levy of interest u/s. 234A and 234B of the Act on account of unanticipated transfer pricing adjustment made by the TPO and disallowance made by the A.O - HELD THAT:- At the time of hearing, the learned counsel for the assessee fairly submitted that this issue may be remanded to the file of the A.O/TPO for verification and then re-adjudicate as per law. The learned D.R. conceded to the submissions of the assessee. Having heard the parties, in the interest of justice, we remand this issue to the file of the A.O/T.P.O. for re-adjudication as per law while complying with the principles of natural justice.
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