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2019 (4) TMI 46 - ITAT DELHIDisallowance u/s 40A(ia) - maintenance charges paid to CISCO - separate transactions pertained to purchase of equipment and provision of annual maintenance services - allegation that no supporting evidences produced - payment constitute towards Fee for Technical Services (FTS) - HELD THAT:- the stand of the department and the assessee is contrary on the factual aspect of the issue i.e. as to whether the assessee had provided the relevant details and documents before the Assessing Officer or not. Looking into the facts of the case and in the interest of justice, it is our considered opinion that the issue should be reexamined by the Assessing Officer specially in the light of claim of the assessee that the assessee had submitted voluminous documents and explanations before the Assessing Officer which had not been given due credence by the Assessing Officer. Accordingly, the issue of payment of annual maintenance charges paid to CISCO System International BV stands restored to the file of the Assessing Officer with the direction to the Assessing Officer to re-examine the issue and pass appropriate orders in accordance with law Allowability of allowances paid to expatriates - non-taxable allowances - Master Service Agreement (MSA) with AT&T Communication Services - HELD THAT:- in view of the divergent claims of both the parties regarding the factual aspect of the issue and in the interest of justice, we deem it fit to restore this issue also to the file of the Assessing Officer with the direction to the Assessing Officer to reexamine the issue and pass appropriate orders in accordance with law after giving due opportunity to the assessee to present its case. Disallowance of gratuity liability of employees - employees transferred to AT&T GNS - HELD THAT:- We deem it fit to restore this issue also to the file of the Assessing Officer with the direction to the Assessing Officer to re-examine the issue and pass appropriate orders in accordance with law after giving due opportunity to the assessee to present its case. We also direct the assessee to cooperate with the assessing authority and furnish all the relevant details and documents when called upon to do so by the Assessing Officer failing which the Assessing Officer shall be at liberty to proceed ex parte qua the assessee and pass appropriate orders in accordance with law. Disallowance of differential amount of mark-up - Addition on account of notional interest - HELD THAT:- disallowance of differential amount of mark-up with respect to services provided by the assessee to AT&T Global Network Services India Pvt. Ltd. leading to an addition of ₹ 53,15,246/- and ground no. 7 pertaining to addition of ₹ 2,46,141/- being addition on account of notional interest income not charged from AT&T Global Network Services India Pvt. Ltd., it is seen that both these issues are covered in favour of the assessee by the order of the Tribunal in assessee’s own case for assessment year respectfully following the order of the Coordinate Bench in assessee’s own case for assessment year 2010-11 [2018 (4) TMI 33 - ITAT DELHI], we order deletion of addition on account of notional charging of mark-up as sustained by the Ld. DRP. On the same reasoning, we allow ground no. 7 also and hold that notional interest could not have been charged on this account and we order deletion of this addition also. Addition on account of notional profit on transfer of business - HELD THAT:- it is the contention of the assessee that neither were any employees transferred with respect to this segment nor were any assets transferred to the other company with respect to this segment and, therefore, there was no transfer of business as alleged by the department. Thus, in view of the contradictory stand of both the parties with reference to the relevant facts, we have no other option but to restore this issue also to the file of the Assessing Officer with the direction to the Assessing Officer to re-examine the issue and pass appropriate orders in accordance with law after giving due opportunity to the assessee to present its case. Disallowance of amount pertaining to the year-end provisioning - HELD THAT:- In the present appeal also, undisputedly no mistake has been pointed out by the Assessing Officer in the calculation and nor is it the case of the Revenue that the taxpayer has not paid certain bills. It is also undisputed that more than 80% of the evidence/s for the year end provisioning have been produced by the assessee and there is no finding by the Assessing Officer that the provisioning was not reasonable or did not have any scientific basis. Therefore, respectfully following the law laid down by the Hon’ble Apex Court in the case of Rotork Controls India Pvt. Ltd. [2009 (5) TMI 16 - SUPREME COURT OF INDIA] and also the order of the Coordinate Bench in assessee’s own case for assessment year 2010-11 as aforesaid, we order deletion of this addition. Short credit of TDS - deletion of addition on account of tax deposited on behalf of the expatriate employees - HELD THAT:- We deem it fit to restore these issues to the file of the AO with a direction to give due credit to the assessee both in respect of tax deducted at source and advance tax after due verification at his end.
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