TMI Blog2012 (5) TMI 421X X X X Extracts X X X X X X X X Extracts X X X X ..... pany off-shore, therefore to be recovered from AE – Decided in favor of Revenue. Exemption u/s 10A – Held that:- It has been decided in assessee’s own case in earlier AYs that that it is not necessary that separate books of accounts should be maintained in respect of new unit, even if, new unit is formed for the expansion of assessee’s business, the same is eligible and unit established by the side of old unit is also eligible for exemption u/s 10A – Unit-107 eligible – Decided in favor of assessee Dis-allowance of loans and advance written off – Held that:- On similar issue, Tribunal had allowed such loss as trading loss u/s 28 in AY 01-02. Same view followed – Decided in favor of assessee. Foreign taxes – dis-allowance u/s 40(a)(ii) - Held that:- Under Section 40(a)(ii), Indian Income-tax which is a tax levied on the profits and gains chargeable under the Act is not deductible. On the other hand, all other taxes levied in foreign countries whether on profits or gains or otherwise are deductible under the provisions of s. 37 and payment of such taxes does not amount to application of income – Decided in favor of assessee. Compensation received for rendering human re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. MOHAN ALANKAMONY, JJ. Assessee by Shri S. N. Soparkar, AR Department by Shri Kartar Singh, Sr. DR O R D E R PER BENCH: These six appeals instituted (i) three appeals by the assessee company and (ii) remaining three appeals by the Revenue are directed against the impugned appellate orders of the Ld. CIT (A) - VIII, Ahmedabad in (i) Appeal No. CIT (A)- VIII/DC/CIR/138/04-05, (ii) No. CIT(A)-VIII/DC-4/203/05-06; and (iii) No. CIT (A)-VIII/DC-4 /300/06-07 dated: 24.05.2005, 24.8.2006 and 28.3.2007 for the assessment years 2002-03, 2003-04 and 2004-05 respectively. I. ITA No.1821/A/05 A Y 2002-03 - By the assessee: 2. The assessee company has raised four grounds, out of which, in ground No.1 that the CIT (A) erred in holding that the assessee was not entitled to claim deduction u/s 80HHE of the Act on the other income of Rs.4.71 lakhs; and in ground No.4 that the CIT (A) erred in not passing a speaking order in relation to ground Nos. 8(k), 8(l) and 8(m) were not pressed during the course of hearing before this Bench. Thus, ground Nos.1 and 4 are dismissed as not pressed . In the remaining grounds, the cruxes of the issues raised are reformulated as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs.1,01,78,964/- being exchange gain and Rs.31,93,255/- respectively for granting exemption/ deduction u/s 10A/80HHE of new Units (SDF VI VII) STP in Pune Unit; (3) directing to include the profit on sale of assets worth of Rs.59,851/- while working out exemption u/s 10A for STP, Pune; (4) directing to exclude misc. income of Rs.4,72,563/- from business for calculating exemption u/s 10A of the Act in respect of Unit 107; (5) directing to treat the lease rental income from the building as income from house property and allow the depreciation claim thereby entertaining a new ground without affording an opportunity to the AO; (6) directing the AO to re-compute deduction u/s 80HHE and holding that the balance 10% profit of Unit 107, new units (SDFVI VII) and Pune STP Unit were eligible for computation of deduction u/s 80HHE; (7) directing to delete Rs.5.05,80,750/- relating to Human Resource Management function based on the TPO s order u/s 92CA(3) of the Act; (8) directing to delete the addition of Rs.9,77,598/- made on account of adjustment relating to interest on advances paid to the employees based on TPO s order; (9) (10) these grounds being general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... running into hundreds of pages furnished by the learned A R during the course of hearing and also the brief submitted by the learned D R, the issues raised by the parties concerned are adjudicated chronologically, in assessment year-wise, as under: I. ITA No.1821/A/05 A Y 2002-03 - By the assessee: (1). Traveling expenses of Rs.1.32 crores relating to seconded employees: 10. The assessee had international transactions with Majesco Software Inc. of USA, Mastek, UK Ltd of UK, Mastek Asias Pacific Pta of Singapore, Mastek MSC Sdn Bhd of Malasia, Mastek Gmbh of Germany and Mastek NV of Belgium. 11. During the course of transfer pricing proceedings, it was noticed by the TPO that the assessee had incurred a total sum of Rs.1,32,52,859/- on the travel cost of the seconded persons during the previous year. According to the TPO, the assessee had a regular practice of seconding various persons to its AEs located at USA, UK, Belgium, Singapore and Malaysia. In all these cases, the persons cease to remain on the payrolls of the assessee and were shifted to the payrolls of the AEs. With regard to the on-site activity, the entire activity had been performed by the AEs and all costs ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business expenditure. Since the assessee had not shown any amount recovered/recoverable from the AEs in its account, the ALP determined at cost was an adjustment to the total income of the assessee and, thus, its income was increased by Rs.1.32 crores. 14. On appeal, the learned CIT (A) had, after due consideration of the assessee s submission, recorded his findings that (On page 27) I have considered the same and for reason similar in respect of the transactions relating to Human Resources Function in the preceding paragraphs it is held that transactions is international transactions within the meaning of section 92B/92C of the IT Act it is not in dispute that the traveling expenditure as above has been incurred on behalf of the associated enterprises. Thus, the expenditure cannot be held to be for the business purposes of the assessee company during the FY 2001-02 as the income on behalf of the projects for which these persons were working on-line on behalf of the associated enterprises are being received by the associated enterprises and not the assessee company. This amount incurred for traveling of such seconded employees at the request of the associated enterprise s wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e raised was with regard to disallowance of legal fees of Rs.5.61,000/- paid to Baker Mckinsey. On a perusal of the details of expenses incurred in foreign currency of Rs.5.88 lakhs on account of legal fees paid to M/s. Baker Mckinsey, the learned TPO noticed that most of the expenses excluding Rs.26,000/- had been incurred in connection with incorporation of the subsidiary company in Belgium. She had asserted that the expenses incurred in connection with incorporation of a company be initially incurred by the promoters, but, they constitute the incorporation expenses of the new company and should have been accounted for by the new subsidiary company formed in Belgium. Being queried as to why the said amount was not recovered from its Belgium AE, the assessee appears to have explained that on a bona-fide belief that the fees was considered to be genuine business expenditure incurred on commercial consideration and, thus, it was neither treated as an expenditure relating to AE nor recovered from the AE or disclosed as an international transaction in Form 3CEB. Considering that the amounts were in the nature of pre-incorporation expenses of the subsidiary in Belgium and the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n here that the assessee had not brought on any documentary clinching proof to repudiate the TPO s stand. Accordingly, we decide the issue against the assessee. II. ITA No.1883/A/05 A Y 2002-03 - By the Revenue: 1. Granting exemption u/s 10A of Rs.9.99 crores in respect of Unit No.107; 25. Incidentally, the earlier Bench in ITA Nos.2762/A/2003 09/A/2004 dated: 17.6.2008 for the assessment years 2000-01 and 99-00 in the assessee s own case had dealt with a similar issue. After analyzing the issue at a greater length, the Hon ble Bench had observed thus: 10. (On page 16) We have gone through the order of the lower authorities and the aforesaid decision dated 7.8.2007 of the ITAT [in ITA Nos.1530/Ahd/2000, 1867/Ahd/2001 368/Ahd/2001 in the assessee s own case for the AYs 1996-97 to 98-99) wherein the ITAT held as under: 20 20.1 .. 20.2 .. 20.3. We find merit in the reliance of learned counsel on the Hon ble Supreme Court in the cases of Textile Machinery Corporation Ltd and Indian Aluminum Co. Ltd., and Gujarat High Court (supra) [CIT v. Satellite Engineering Ltd. 113 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ward 8(3)(3), Mumbai 289 ITRSP 65 (Mum) held that the profit on account of foreign exchange gain is directly referable to the articles and things exported by the assessee. Such profits are, therefore, of the same nature as the sale proceeds and there is no reason as to why deduction under section 10A should not be allowed in respect of such exchange gain. No contrary decision has been brought to our notice. However, in the case under consideration, it is not evident from the order of lower authorities as to whether or not gain due to difference in exchange rate is on account of exports or otherwise. In these circumstances, we vacate the findings of ld. CIT (A) and restore the matter to the file of the AO with the directions to ascertain the nature of gain. In the event such gain is derived from the export of goods or articles manufactured or produced by the taxpayer, exemption/ deduction u/s 10A or 80HHE as the case may be, should be allowed in accordance with law after allowing sufficient opportunity to the taxpayer 29. The above view has also been reinforced by the Hon ble Bench in its findings for the AY 2006-07 in the assessee s own case. 30. In consonance with the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... v. Equitorial Pvt. Ltd. (1974) Taxation 37(3)(-82, the debt owed by M/s. Mohamad Peer Mohmad of Nasik was one which sprang directly from the business of the assessee and was allowable as a bad debt, and, consequently, therefore, a trading loss under section 28(1). It is no doubt true that every loss is not so deductible unless it is incurred in carrying out the operation of the business [vide CIT v. Nainital Bank Ltd. (1965) 55 ITR 707 (SC)] In that view of the matter, therefore, for the reasons stated, Hon ble High Court held that the said loss being a bad debt is allowable as trading loss under s.28 of the I.T. Act, 1961. 14.1. In the light of aforesaid decision of Hon ble jurisdictional High Coujrt and the nature of advances detailed in the order of the ld CIT (A), suggest that these amounts were advanced during the course of carrying on of business and are directly connected with their business activities. Thus, these amounts forgone are business loss and are allowable. 32. In consonance with the observations of the earlier Bench (supra), we tend to decide the issue in favour of the assessee. It is ordered accordingly. (5.) Allowing of Rs.42,57,297/- paid as Belgium ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness outside India. Having regard to the case laws cited by the appellant s representative as above, the amount is clearly admissible u/s 37 (1) of the IT Act and the assessing officer is directed to allow the same accordingly. 36. During the course of hearing, the learned D R submitted that (i) the income had arisen in Belgium and the expenses have been claimed in Belgium and the tax thereon had also been paid in Belgium; (ii) since the PE resides in Belgium, the tax paid by the PE on its income cannot be subject matter of claim of deduction as specifically prohibited u/s 40(a)(ii) of the Act and explanation makes it clear that the tax is global tax of the entity and not just Indian Income-tax as canvassed by the assessee; (iii) the tax of the PE on its income was equivalent to Indian Income-tax had the income been offered for tax within the country. Hence, the tax represents an amount equivalent to Indian Income-tax Act; (iv) since the tax has been paid on a portion of income attributable to the PE, the assessee should have claimed credit for such tax, if the same income was included in the income being taxed in India. It is a matter of DTAA and not deduction for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he definition of the term tax appearing in s. 40(a)(ii) needs to be highlighted. As discussed above, the term tax is defined in s. 2 (43) as income-tax payable under the provisions of the Income-tax Act. the legislative message is, therefore, loud and clear that what is disallowed u/s 40(a)(ii) is only the Indian Income-tax. The foreign income-tax stands on a different footing altogether when look at from the point of view of the income-tax. 37.2 In conclusion, it was submitted that Under section 37, all taxes and rates are allowable irrespective of the place where they are levied i.e., whether in India or in a foreign country. However, u/s 40(a)(ii) Indian Income-tax which is a tax levied on the profits and gains chargeable under the Act is not deductible. On the other hand, all other taxes levied in foreign countries whether on profits or gains or otherwise are deductible under the provisions of s. 37 and payment of such taxes does not amount to application of income. 38. We have attentively considered the rival submissions and also perused the relevant case records. 39. Due consideration of the provisions of s.37 and s.40(a)(ii) of the Act as well, it emerges that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture is allowable under section 37 of the Act. In our view, rates and taxes which are payable irrespective of any profits being earned are admissible allowances under section 37 and section 40(a)(ii) does not apply to them. The tax levied by different countries is not a tax on profits but a necessary condition precedent to the earning of profits. So the AAC was absolutely justified in allowing the appeal of the assessee and we see no reason to differ from the finding. Reference application of the Revenue was rejected by the Tribunal which has been ratified by the Hon ble Bombay High Court in ITA NO.123 OF 1976. (ii) In the case of Tata Sons Limited [ITA NO.89 OF 1989], the Hon ble Mumbai Bench of Tribunal had held on a similar issue that:- It is an established principle that when a matter is settled by higher courts in a case of a particular assessee, at least in that case litigation cannot be allowed to perpetuate for an indefinite period. In the instant case, the issue is not only settled in favour of the assessee in its own case by the tribunal in ITA Nos. 5708/Mum/82 and 5790/Mum/83 dated 23.10.82, but even after rejection of Revenue s Application under section 256(1) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the investments in shares and securities from which exempted income has been earned. In view of the above factual position and also the view taken in AY 2001-02 as per ground No.8, para 13,14 and 15, the addition made on this account is not justified, accordingly directed to be deleted. The second part of disallowance relates to the action of the assessing officer in disallowing Rs.48.61 lacs out of the administration and other expenses of Rs.2979.61 lacs. This issue had also come up for AY 2001-02. The total dividend income earned last year was Rs.63.68 lacs and as per para 8 of the order dated 12.10.2004, a sum of Rs.2 lacs was considered as reasonable amount relating to administrative expenses incurred for earning said income for this year also. For reasons recorded therein this disallowance is restricted to Rs.2 lacs for this year also and assessee company get a relief of Rs.46,61,357/-. To summarize the total disallowance of Rs.74,11,557/- gets reduced to Rs.2 lacs only. 45. The learned D R supported the stand of the AO but dissented with the findings of the learned CIT (A). 46. On the other hand, the learned A R submitted that the CIT (A) had taken a judicious view i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO had added Rs.234.5 lakhs to the assessee s income from providing human resources support. On a perusal of the TPO s order, it has been observed that the issue of Human Resources Management Services has been dealt with in an exhaustive manner and for the reasons recorded therein, the TPO had concluded thus: 10.3. Considering assessee s failure to justify the price charged and in the case of Singapore and Malaysia for not charging any compensation at all, it is held that 1 months salary of the person deputed (12.5% of the annual salary) in the overseas subsidiary is the arm s length compensation for the service rendered of providing suitable software personnel. In this connection, the third party charges paid by the assessee to other recruitment agencies @ 12.5% of the annual salary is taken as the benchmark. The arm s length price is hence calculated in the following manner: Total No. of persons seconded (as per assessee s Letter dated 25.8.2004) 263 (in numbers) 12.5% of annual salary of 263 persons seconded Rs.568.5 lakhs Arms length price for the human resource Management service Rs.568.5 lakhs Amount already charged by the assessee (assessee s letter dt: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was no question of charging notional income to tax. No notional income has been quantified by the TPO; (v) in view of specific provisions relating to avoidance of tax between related parties, the arm s length principle will have to be looked into irrespective of the commercial expediency. Existence of an associate is to ensure commercial expediency. However, the Act had chosen to apply certain tax avoidance measures with reference to transaction between such associates and these take precedence over other provisions; 53. On the other hand, the learned AR while supporting the CIT (A) s stand drew the attention of this Bench of the Tribunal s findings in an identical issue in the assessee s own case for the AY 2006-07. 54. The earlier Bench, in the assessee s own case for the AY 2006- 07, after much deliberations, had observed thus: 27. (On page 74) The assessee has made out a case that by such an arrangement of sending the employees to AEs in return assessee has also been benefited. Employees, after returning, are with upgraded skills, better experience, update knowledge and with a better delivery skills. This is one part of the advantage and the other part of the advantag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur of the assessee. It is ordered accordingly. III. ITA No.2274/A/06 A Y 2003-04 - By the assessee: (1.) Disallowance of deduction u/s 80HHE on miscellaneous income of Rs.34,73,924/-: 56. It was the stand of the AO that the assessee had not excluded certain other income from profit of the business for the purpose of deduction u/s 80HHE of the Act. For the detailed discussion recorded in his impugned order that the other income included in profit of the business as per books were not profit derived from export business and have to be excluded from the profit of the business. 57. On appeal, the learned CIT (A) had observed that: 3.5. (On page 5) As regards 80HHE deduction, the AO vide para 5.4. had excluded 90% of misc. income of Rs.42,26,000/- under the head other income. The bifurcation for the above is as under: New Units (SDF VI VII) Rs.30,01,361 Unit 107 Rs. 4,72,563 Mahape Unit Rs. 54,732 Others Rs. 6,97,125 3.5.1. Thus, the appellant itself has excluded Rs.6,97,125/- in their computation of deduction u/s 80HHE. As regards Mahape Unit, the net result was a business loss and, hence, the above sum of Rs.54,732/- is not part of the profit considered f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted that all the above other incomes were intimately connected with the business of the undertaking and as such were eligible for exemption/deduction u/s 10A/HHE of the Act and that only net income is to be excluded u/s 80HHE of the Act. Reliance was placed on the ruling of the Hon ble Supreme Court reported in 247 CTR 372 (SC). 59. We have duly considered the submission of the learned A.R. We have also perused the reasoning of the AO as well as the CIT (A). With due respects, we have gone through the observations of the Hon ble Apex Court cited supra. Taking into account the contentions of the AO and the judicial view on a similar issue, the matter is remitted back to the file of the AO with a specific direction to recalculate the workings in the light of the observations of the Hon ble Apex Court on the issue. It is ordered accordingly. (2.) Confirming the disallowance of Rs.1,26,88,612/- being traveling expenses of seconded employees: 60. A similar issue came up before this Bench for the AY 2002-03 in the assessee s own case (supra) and the findings recorded therein hold good for this AY also. It is ordered accordingly. IV. ITA No.2341/A/06 A Y 2003-04 - B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the Revenue was that the CIT (A) had erred in directing the AO to exclude misc. expense of Rs.4.72 lakhs from the business profit for calculating exemption u/s 10A in respect of unit 107. 67. We have duly considered the findings of the CIT (A) wherein he had recorded as under: 3.4. (On page 5) With regard to inclusion of misc. income of Rs.42,25,781/- from the business profits for calculating deduction u/s 10A/80HHE, the AO vide para 4.5 of his order excluded misc. income of Rs.30,01,3621/- in computing the profit of the business eligible for exemption u/s 10A in respect of new units (SDF VI VII). This adjustment, it is since verified was effect by the appellant also in the computation of deduction u/s 10A in respect of the said units. As such, the AO has not disallowed anything in addition and, hence, the exclusion of the said item of misc. income while computing deduction u/s 10A is in order and thus sustained. For the same logic in respect of unit 107 now held as eligible for deduction u/s 10A vide ground No.1 above, the exclusion of other income of Rs.4,72,563/- is found to be correct and the AO while giving effect to this order shall exclude the above sum in comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n its real spirit. What is to be assessed as income under a specific head cannot be computed under business head in the absence of specific facts. The decisions relied on by the appellant as to depreciation on leased assets are all rendered in the context of leased out machineries and not house property let out for rent. Accordingly, the appellant cannot claim depreciation as against income assessable under the house property. However, it is to be noted that the AO although disallowed the depreciation did not compute the rental income under the head house property . To this extent, the action of the AO in disallowing depreciation but treating the income as part of business is anomalous. On the facts obtaining in this case, the income by way of monthly rent on licence agreement (permissive User Agreement) shall be assessed as income from house property and in doing so the appellant was entitled to deduction permissible u/s 24 of the Act. The AO is directed to compute the income accordingly .. 72. In this connection, we would like to make the point clear that though the ground raised by the assessee relates to disallowance of depreciation of leased assets of Rs.3,84,684/-, the CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue in his order. The contentions of the appellant in this regard are tenable and acceptable. Accordingly, the appellant is entitled for deduction u/s 80HHE in respect of balance 10% of the profits calculated with reference to the eligible units. Vide ground No.1, the deduction u/s 10A was held to be allowable for Unit 107. On this, the AO had allowed only deduction u/s 80HHE. Now as the profits of Unit 107 is held as eligible for exemption u/s 10A, the balance 10% profits in respect of Unit 107, new units (SDF VI VII) and Pune Unit are eligible for computation of deduction u/s 80HHE and the AO is directed to recomputed the same in the light of the above directions. 5.2. However, as regards the export turnover and total turnover for computing the deduction u/s 80HHE, 10% of the export turnover and total turnover of 4 eligible units (new units SDF VI VII) Unit 107 and SDP Pune shall be included in the export turnover and total turnover respectively as 10% of the profits of those units are now considered for computing deduction u/s 80HHE. This is to match the eligible profit with the corresponding export turnover and total turnover. The deduction u/s 80HHE M shall be reworked ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not levy any agency charges for the recovery and remittance back to the assessee. 81. Considering the assessee s contention, the CIT (A) had observed that the fact that the amount was advanced to the employees who ultimately return back on completion of onsite work was not in dispute. It was also on record that the said amount was recovered from the salaries and sent back at regular intervals. There was no material on record that the fund of the assessee was enjoyed by the AEs and that the expenditure was wholly in connection with the movement of the employees for onsite job and not to meet any cost of AEs as the said sum was ultimately recoverable in the subsequent salary. Thus, the contention of the assessee that the said adjustment was purely notional especially when the AEs did not charge any agency charges for collecting and remittance back is tenable. In fact, bank charges for remittance of funds were borne by AEs. In view of the matter, the CIT (A) took a view that the said adjustment cannot be recovered from the AEs and, thus, cannot constitute the income of the appellant company and accordingly, directed the AO to delete the said adjustment. 82. Before us, the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the AEs is to be made. [Refer: p 108 of PB] 87. Accordingly, the TPO had worked out the upward adjustment of Rs.52,86,105/- on account of interest cost not recovered from the AEs for settling advance given to the AEs. However, this figure has been scaled down to Rs.9,77,598/- through his order u/s 92CA(5) r.w.s.154 of the Act [Refer: P 110 of PB]. 88. After taking into account the reasoning of the learned TPO, reversal effected by the learned CIT (A) and also keeping in view the arguments put-forth by the learned AR during the course of hearing, we are of the considered view that the reasoning of the TPO was quite reasonable and balanced one too. Accordingly, the addition made by the AO is sustained and the finding of the learned CIT (A) is reversed. IV. ITA No.2042/A/06 A Y 2004-05 - By the assessee: (1) Disallowance of depreciation on lease assets amounting to Rs.41,41,761/-: 89. The assessee had claimed depreciation on a building which has been given on lease to Mastek DC a group concern. As the said asset, according to the AO was not used by the assessee for its business purposes during the year under consideration, the assessee was required to explain as to why t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g out the property; that the activity of letting out was merely incidental to the regular business of the assessee. It was, further, claimed that the assessee has been carrying on its regular business activities from the said premises. Taking shelter under the provisions of s. 22 of the Act, it was contended that the rent income was received as a result of exploitation of commercial asset, and, accordingly the source of rent income was use of commercial asset. 93. Placing strong reliance on the ratio laid down by the Hon ble Supreme Court in the case of Universal Plast Ltd v. CIT [(1999) 237 ITR 454 (SC)], it was contended that the assessee had not let out the premises for a permanent period and only a part of the premises was let out while the assessee continued to carry out its business activities from the same premises and that the proposition laid down by the Hon ble Court directly applicable to the assessee who had rightly claimed depreciation on the leased assets. 94. The learned D R valiantly supported the stand of the authorities below and pleaded that the findings of the learned CIT (A) be upheld. 95. We have carefully considered the rival submissions and also critic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see had raised the same bogey (of temporarily rented out the premises) wanted to get away with it. 99. In view of the above facts and circumstances of the issue as deliberated upon (supra) and since the assessee had not let-out a portion of its premises temporarily as advocated, we are of the firm view that the ratio laid down by the Hon ble Supreme Court, strongly relied on by the assessee, cannot come to its rescue. Accordingly, we are of the firm that the learned AO as well as the learned CIT (A) were within their realms to reject the asssesee s claim. It is ordered accordingly. (2) Disallowance of traveling expenses of Rs.1,67,98,984/- in relation to seconded employees: 100. Incidentally, this issue has been decided against the assessee for the reasons recorded therein for the assessment year 2002-03 in the assessee s own case(supra). As the issue is similar for this AY too, our findings for the earlier AY hold good for this AY also. In a nut shell, this issue is decided against the assessee. VI. ITA No.2541/A/07 A Y 2004-05 - By the Revenue 101. Before venture to adjudicate the grievances of the Revenue put forth in its appeal for the AY under dispute, we would l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the finding of the earlier Bench in the assessee s own case for the AY 2006-07 cited supra, this issue goes in favour of the assessee. (7) Deletion in addition of Rs.7.55 lakhs made on account of TPO adjust towards non-charging of interest on advances to employees: 108. Incidentally, a similar issue has been decided against the assessee in Revenue s appeal for the AY 2003-04 [ground No.8] supra. In consonance with the above findings, the Revenue s ground is allowed. (8) Deletion of addition of Rs.51.79 lakhs made on account of TPO adjustment towards interest on excess credit period granted to AE: 109. By the by, an identical issue to that of the present one had cropped up for adjudication before the earlier Bench for the assessment year 2006-07 in the assessee s own case. For the elaborate findings recorded therein, the issue has been decided in favour of the assessee. In conformity with the findings of the earlier Bench (supra), the issue is decided against the Revenue. Thus, this ground of the Revenue is dismissed. 110. In the result: (i) The assessee s appeals for the assessment years 2002-03 and 2004-05 are dismissed and the appeal for the AY 2003-04 is partly al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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