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2022 (9) TMI 28 - AT - Income TaxTP Adjustment - AMP expenditure as established as an international transaction - HELD THAT:- We set aside the whole issue back to the file of the learned Assessing Officer/ Transfer Pricing Officer for determination of Arm’s Length Price of international transition of excess AMP spend of the assessee Capital work in progress - assessee has shown a capital work in progress at schedule 6 of the fixed assets - Assessee objection before the learned dispute resolution panel who gave a direction to allow project cost expenditure to the extent third party bills has been submitted by the assessee - HELD THAT:- The fact shows that in this year the assessee has shown a capital work in progress and has not claimed any deduction. Therefore, the question of making any disallowance or addition on that account does not arise in this year. However when the assessee makes capitalization of the capital work in progress into fixed assets, the learned assessing officer has every right to examine the actual cost of the asset, when it is put to use an the use for business purpose for allowability of the depreciation. Therefore, at present, the findings of the learned assessing officer are premature. Accordingly, ground number 19 of the appeal is allowed. Disallowance of bad debt - Assessee did not submit any detail and therefore the claim of the bad debt was disallowed - HELD THAT:- Before the lower authorities, the assessee did not submit any information. Therefore, the addition was confirmed. Even in the form of additional evidences before us, the assessee has merely submitted the name of the parties, the amount, and the permanent account number of some of the parties. For the claim of the bad debt, the assessee should have shown that these amounts have been included in income of the assessee in earlier years. The assessee has failed to show the same. Therefore, we do not find any infirmity in the orders of the lower authorities in confirming the disallowance of the bad debt. Accordingly, ground number 20 of the appeal is dismissed. Mismatch in annual information return - AO asked the assessee to reconcile the AR information as per 26 AS with the books of accounts - HELD THAT:- We find that merely because there are difference between the AIR and the books of account, the addition cannot be made but it is the first trigger point for making further investigation and obtaining the details from the assessee to justify the difference. If the assessee can reconcile such difference and even otherwise satisfy the learned assessing officer, that such addition is unwarranted, the addition is not required to be made. As the learned assessing officer as well as the learned DRP has made the addition merely on the basis of the difference between form No 26 As and failure of assessee to reconcile it with the books , we set-aside this ground of appeal back to the file of the learned assessing officer with a direction to the assessee to satisfy the learned assessing officer by producing the relevant details that there is no mismatch between income offered by the assessee as well as items reported in AIR. If the learned assessing officer is satisfied with the same, the addition deserves to be deleted. Therefore, the learned assessing officer may verify the information furnished by the assessee and decide afresh in accordance with the law. Accordingly, ground number 24 of the appeal is allowed with above direction. Disallowance of royalty u/s 37 (1) - AO asked the assessee to furnish the information about the royalty paid to Diageo North America and why shame should not be disallowed u/s 37 (1) - Whether assessing officer is not authorised to consider the benefit test and make the disallowance u/s 37 (1) of the act.? - HELD THAT:- The identical issue arose in case of the assessee for assessment year 2010 – 11 before the coordinate bench and it was decided in [2019 (12) TMI 1615 - ITAT MUMBAI] wherein the issue was set aside to the file of the learned assessing officer. Therefore with similar direction we also set-aside ground number 25 of the appeal. Accordingly, this ground is allowed with above direction. Charging of interest u/s 234A - Assessee submits that the return of income was filed by the assessee on 22/11/2011 whereas the due date for filing of the return of income was 30/11/2011 and therefore no interest u/s 234A of the act should have been charged, as there is no delay in filing of return of income - HELD THAT:- Apparently, if the assessee has filed the return of income within the due date prescribed u/s 139 (1) of the act, interest u/s 234A cannot be levied. Therefore, the learned assessing officer is directed to delete the interest charged under that Section. Ground number 27 of the appeal is allowed.
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