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2018 (7) TMI 1087 - AT - Income TaxAddition on account of transfer pricing adjustment made in the Transport segment - Held that:- In the given facts and circumstances, we are of the opinion that the assessee’s application for additional evidence including expert technical opinion provided by the assessee and the report of the Valuation Officer need to be examined at the end of the TPO/AO on the facts relevant for the year under consideration. Even if the AO/TPO has found the additional evidence as supporting the Departmental view for the A.Y. 2006-07, that does not per se operate as res judicata for other years. The facts of each year need to be separately examined in the light of the additional evidence before jumping to any conclusion. We are concerned with additional evidence which has not been examined by the AO/TPO in the light of the facts for the relevant year. Our view in restoring that matter to the AO/TPO for a fresh adjudication of this issue is fortified by the judgment of the Hon'ble Calcutta High Court in CIT vs. Trimline Vyapaar Ltd. (2014 (5) TMI 748 - CALCUTTA HIGH COURT) in which it has been held that additional evidence cannot be permitted to be adduced without making an opportunity to the AO. In that case, the Tribunal decided the issue in assessee’s favour by relying on additional evidence without confronting it to the AO. The Tribunal order was set aside by holding that consideration of additional evidence, without giving any opportunity to the AO to examine the same, is gross violation of principles of natural justice. Depreciation on leasehold improvement - Held that:- Spirit and text of Explanation 1 to section 32 is that any capital expenditure by the assessee on a building not owned by him, in which he carries on the business, shall be considered as building owned by him for the purposes of section 32, to the extent of the amounts spent on the construction of structure or doing of any work in or in relation to and by way of renovation or extension or improvement to the building. It therefore, follows that in order to bring any amount within the ambit of Explanation 1 to section 32, it is paramount that the expenditure incurred by the assessee on the premises in the capacity of non-owner should firstly be in the nature of capital expenditure and then it should fall within any of the clauses as discussed above. If these conditions get satisfied, as is the case under consideration, then the amount incurred for such works falls under Explanation 1 to section 32. In other words, the amount so incurred would be capitalized entitling the assessee to depreciation as per the eligible rate. The facts of the instant case precisely fall within the ambit of Explanation 1 to section 32. In view of the foregoing discussion, we uphold the impugned order treating such amount as capital expenditure, eligible for depreciation. Receivable treated as an international transaction - Held that:- Applying the decision in Kusum Health Care (2017 (4) TMI 1254 - DELHI HIGH COURT), the Hon’ble High Court directed the TPO to study the impact of the receivables appearing in the accounts of the assessee; looking into the various factors as to the reasons why the same are shown as receivables and also as to whether the said transactions can be characterized as international transactions. In view of the above decision in Avenue Asia Advisors (2017 (9) TMI 1295 - DELHI HIGH COURT), we deem it appropriate to set aside the impugned order on this issue and remit the matter to the file of the Assessing Officer/TPO
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