TMI Blog2013 (11) TMI 1539X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Hindustan Unilever [2012 (12) TMI 166 - MADRAS HIGH COURT] has no bearing as binding precedent, being on the facts. As rightly pointed out by the learned Departmental representative, the hon'ble Madhya Pradesh High Court in the case of Prestige Foods [2012 (6) TMI 266 - MADHYA PRADESH HIGH COURT] has upheld apportionment of expenditure between two units based on turnover and this judgment was distinguished by the hon'ble Madras High Court vide paragraph 7, on the reason that the assessee did not furnish expenses incurred by the units for the purpose of considering the deductibility. Since common expenditure is directed to be examined by the Assessing Officer and allocated to various units on the basis of turnover, we do not see any reason to differ from the order of the Tribunal. - Decided against assessee. Rate of interest to be charged on loans granted to associated enterprises - TPA - Held that:- 7 per cent. rate is reasonable which is equivalent to LIBOR + 2 per cent. Be that as it may, since the assessee has accepted 7 per cent. in the earlier year and that is the basis for directing to adopt 7 per cent. by the Tribunal, we do not see any reason to modify the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2003-04 in the assessee's case, vide paragraph 11.2 local doctors meeting expenditure was set aside to the Assessing Officer to examine the nature of expenditure and whether the same was incurred for the purpose of business of the assessee. Similarly, vide paragraph 11.3 individual doctor's services were considered and following its order in earlier year, this issue was also set aside to examine the nature of expenditure and consider the disallowance of expenditure which is not incurred for the purpose of business. However, vide paragraph 11.4 circular issued by the Board in 5 of 2012 and the Code of Ethics Regulations, 2002 issued by Medical Council of India applicable from the assessment year 2003-04 were referred to. It was observed that code of ethics is applicable and so the expenditure incurred on the doctors can be considered as unethical. The assessee is objecting to this observation pointing out that the code of ethics was applicable to doctors initially and only after amendment to the guidelines issued on December 10, 2009, this expenditure can be considered for disallowance in company case subsequent to that date and, therefore, application of Medica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02. 7. The learned Departmental representative however, objected to stating that the decision of Hindustan Unilever is given on the facts whereas the hon'ble Madhya Pradesh High Court in the case of Prestige Foods Ltd. v. CIT [2012] 81 CCH 31 (MP) ; [2012] 70 DTR (MP) 425 has upheld the apportionment of expenditure between the two units based on turnover. 8. After considering rival contentions, we do not see any reason to interfere with the order of the Tribunal on the issue. In fact vide paragraph 12.5 of the order, the directions of the Tribunal in the assessment year 2003-04 in the assessee's own case were extracted and accordingly the matter was set aside to the file of the Assessing Officer to re-examine the claim on similar lines. The issue originally arose in the assessment year 2003-04 and accordingly following the decision of the co-ordinate Bench allocation on the basis of turnover is accepted. We have perused the decision of the hon'ble Madras High Court in the case of CIT v. Hindustan Unilever wherein the hon'ble High Court has accepted the Tribunal's order on allocation of expenditure on the reason that expenditure incurred was for the overall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now praying for directing LIBOR linked interest rate should be applied as arm's length price interest rate, following the co-ordinate Bench decision in the case of Four Soft Ltd. v. Deputy CIT [2010] 16 ITR (Trib) 73 (Hyd) in ITA No. 1495/Hyd/2010. 10. The learned Departmental representative, however, submitted that charging interest at 7 per cent. is reasonable and no interference is called for. 11. We have considered the rival contentions. Since the assessee has accepted 7 per cent. in the earlier years, the Tribunal felt that 7 per cent. is reasonable and accordingly LIBOR linked interest was not considered. The issue in Four Soft Ltd. [2010] 16 ITR (Trib) 73 (Hyd) relied upon by the assessee is not about bank interest rate or fixed deposit interest rate. The issue contested was rate of LIBOR, the actual LIBOR rate as per the assessee was 4.42 per cent. whereas the Dispute Resolution Panel has taken LIBOR at 5.7 per cent. The Tribunal has directed the Assessing Officer to examine the correct rate of LIBOR and adopt LIBOR + rate in that case. There are other judgments also where 6 per cent. interest received was considered as LIBOR + 157 base points, so, 7 per cent. int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allow the claim of revised return as time limit prescribed under the Income-tax Act has already expired. As seen from the ground, the assessee's contention was only for acceptance of the revised return and not for considering the issue on merits whether losses/effect of merger should be considered in assessment. Since the ground is only with reference to consideration of revised return and not for the information therein, the Tribunal restricted itself to acceptance of revised return and rejected the contention as the revised return was belated. Further, the decision of NEPC India Ltd. now being relied in miscellaneous application has not been placed before the Bench at the time of arguments. Therefore, consideration or non-consideration of the same does not arise. Moreover, the assessee has not taken any alternate ground that effect of merger should be considered in the assessment proceedings on merits. Consequently, the Tribunal cannot traverse beyond the ground raised before it and, accordingly, restricted itself whether the revised return can be considered as valid or invalid. In these circumstances, the contention raised by the assessee has no merit and accordingly rejecte ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
