2017 (10) TMI 1636 - AT - Income Tax

Addition u/s 14A in the computation of book profit u/s 115JB deleted - Disallowance u/s 14A upholded partly in the computation of income under the normal provisions by deleting the addition made rule 8D(2)(ii) and sustaining the addition under rule 8D(2)(iii) - granting additional depreciation under clause (iia) read with clause (ii) of section 32(1) - Addition of Depletion in excess of the rates specified in Schedule XIV of the Companies Act 1956 deleted in the computation of book profit u/s 115JB - remitting the matter of TPA from the international transaction of payment for intra group services to the AO/TPO for fresh adjudication - remitting to the AO/TPO the transfer pricing addition on account of interest on redeemable preference shares of Cairn India Ltd. recharacterised as unsecured loan advanced to the AE for a fresh decision- directing to allow credit for TDS and advance tax after verification. HELD THAT - We set aside the impugned order and remit the matter to the file of Assessing Officer/TPO for deciding the issues raised in the grounds taken for the instant year in conformity with the view taken by the Tribunal in its order for assessment year 2011-12 2017 (10) TMI 588 - ITAT DELHI as has been briefly set out above. Assessee has raised fresh grounds on interest u/s 234B and u/s 234C. It was admitted that interest u/s 234B is consequential. As regards interest u/s 234C we direct that the same be computed with reference to the returned income and not the assessed income. Appeal is allowed for statistical purposes.

Summary

Issues:
1. Final assessment order dated 12.01.2017 passed by the Assessing Officer under section 143(3) read with section 144C of the Income-tax Act, 1961 for the assessment year 2012-13.
2. Similarity of substantial grounds raised in the appeal for the A.Y. 2012-13 with those raised in the appeal for the A.Y. 2011-12.
3. Deletion of addition made under section 14A in the computation of book profit under section 115JB of the Act for the AY 2011-12.
4. Disallowance under section 14A partly in the computation of income under the normal provisions by deleting the addition made under rule 8D(2)(ii) and sustaining the addition under rule 8D(2)(iii) for the AY 2011-12.
5. Granting additional depreciation under clause (iia) read with clause (ii) of section 32(1) for the AY 2011-12.
6. Deletion of addition of 'Depletion' in excess of the rates specified in Schedule XIV of the Companies Act, 1956, in the computation of 'book profit' under section 115JB of the Income-tax Act, 1961 for the AY 2011-12.
7. Remittal of the matter of transfer pricing addition from the international transaction of payment for intra-group services to the AO/TPO for fresh adjudication for the AY 2011-12.
8. Remittal to the AO/TPO of the transfer pricing addition on account of interest on redeemable preference shares of Cairn India Ltd. recharacterized as an unsecured loan advanced to the AE for a fresh decision for the AY 2011-12.
9. Direction to allow credit for TDS and advance tax after verification for the AY 2011-12.
10. Fresh grounds raised on interest u/s 234B and u/s 234C for the AY 2012-13.

Detailed Analysis:
1. The appeal by the assessee pertains to the final assessment order for the assessment year 2012-13 under sections 143(3) and 144C of the Income-tax Act, 1961. The appeal was heard alongside the appeal for the A.Y. 2011-12, with a common submission that the substantial grounds raised in the current appeal are akin to those in the previous year. A separate order for the AY 2011-12 was passed, addressing various issues such as deletion of certain additions, upholding disallowances, and granting additional depreciation.

2. The Tribunal set aside the impugned order and remitted the matter to the Assessing Officer/TPO for deciding the issues raised in the grounds for the current year in line with the Tribunal's order for the AY 2011-12. This decision was based on the common submissions and the similarity of issues between the two years.

3. Apart from the common grounds, the assessee raised fresh grounds concerning interest u/s 234B and u/s 234C for the AY 2012-13. It was acknowledged that interest u/s 234B is consequential, and regarding interest u/s 234C, the computation was directed to be based on the returned income rather than the assessed income.

4. Consequently, the appeal was allowed for statistical purposes, and the order was pronounced in open court on 09.10.2017. The Tribunal's decision focused on aligning the assessment for the AY 2012-13 with the previous year's order, addressing various issues raised by the assessee and providing specific directions for the computation of interest under relevant sections.