TMI Blog2015 (7) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... a is not applicable in the matter of income tax, however, rule of consistency has to be followed as the facts are identical. Since there is no difference in the facts and circumstances with respect to the claim of the assessee for the Assessment Year under consideration vis-a-vis to the Assessment Years 2004-05 to 2006-07 and when the order of the Commissioner of Income Tax (Appeals) has been accepted by the revenue for the AYs 2004-05 to 2006-07, then the claim of the assessee cannot be disallowed for the Assessment Year under consideration. Also see CIT Vs. Samtel Color Ltd (2009 (1) TMI 26 - DELHI HIGH COURT) has held that the admission fee paid to the Clubs is also revenue in nature. - Decided in favour of assessee. Disallowance made u/s 40(a)(ia) - discount given to distributors by way of credit notes for non-deduction of tax at source - Held that:- The relationship between the parties, as per the agreement, in relation to sale and purchase of the product is on principal to principal basis and to that extent the decision of Hon’ble Delhi High Court rendered in the case of Mother Diary (2012 (2) TMI 80 - DELHI HIGH COURT) is applicable. However, the Tribunal took the view th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amendment. We agree with this contention of the assessee and accordingly direct the AO to delete this disallowance. Decided in favour of assessee . Disallowance of interest on advances given to group entities u/s 36(1)(iii) - Held that:- an identical issue was considered by the Co-ordinate bench in the case of Skol Breweries Ltd. (supra) and restored the matter to the file of the AO to verify the contentions of the assessee that the advances were given out of own funds and not borrowed funds. Consistent with the view taken in the earlier year, we restore this issue to the file of A.O. for fresh examination by duly considering the contentions of the assessee.- Decided in favour of assessee for statistical purposes. Transfer pricing adjustment in respect of royalty payment to Associated Enterprises (AE) - A.R submitted that the assessee has undertaken fresh Transfer pricing study by taking fresh set of comparables, by following the directions given by the Tribunal in AY 2007-08 with regard to the approach to be followed for benchmarking royalty transaction. He further submitted that the TPO has recently passed the order for AY 2007-08 in the set aside proceedings and has acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted the order of the Commissioner Of Income Tax (Appeals. The assessing Officer has not brought out on record that there is a change in the facts and circumstances with respect to the claim of the assessee for the Assessment Year under consideration to that of earlier years 2004-05 to 2006-07. Though, principle of res-judicata is not applicable in the matter of income tax, however, rule of consistency has to be followed as the facts are identical. Since there is no difference in the facts and circumstances with respect to the claim of the assessee for the Assessment Year under consideration vis-a-vis to the Assessment Years 2004-05 to 2006-07 and when the order of the Commissioner of Income Tax (Appeals) has been accepted by the revenue for the AYs 2004-05 to 2006-07, then the claim of the assessee cannot be disallowed for the Assessment Year under consideration. 5. We also notice that the Hon ble Delhi High Court has held in the case of CIT Vs. Samtel Color Ltd (2009)(ITA No.1152/2008 dated 20-01-2009) has held that the admission fee paid to the Clubs is also revenue in nature. Accordingly, we direct the AO to allow the claim of the assessee. 6. The fifth ground urged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on principal to principal basis and to that extent the decision of Hon ble Delhi High Court rendered in the case of Mother Diary (249 CTR 559) is applicable. However, the Tribunal took the view that the scheme under which the impugned benefit/incentive is given needs to be examined in order to give a finding as to whether the impugned payment is commission or not. Hence, the matter was set aside to the file of the AO with a direction to verify and examine relevant record and decide the same as per law. Consistent with the view taken in earlier year, we set aside the order passed by AO on this issue and restore the same to his file with the direction to examine the same afresh after affording necessary opportunity of being heard to the assessee and take appropriate decision in accordance with the law. At the time of hearing, the ld A.R placed reliance on the decision rendered by Hon ble Bombay High Court in the case of CIT Vs. Intervet India Pvt Ltd (ITA No.1616 of 2011 dated 01-01-2014), wherein it was held that the sale promotion benefit availed by the dealers is not payment of Commission. In the set aside proceedings, the AO should decide the issue by considering the applicabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 5 6 as under .. In view of the above, we direct he A.O to delete this disallowance. 11. The next issue urged by the assessee relates to the disallowance made u/s 40(a)(i) of the Act of software charges amounting to ₹ 33,60,435/- for non-deduction of tax at source. During scrutiny assessment, the A.O. observed that the assessee has paid a sum of ₹ 33,60,435/- to SABMiller A A (Pty) Ltd. towards the expenditure incurred on account of Syspro license fees, Report Generation charges in Syspro, customizing Syspro so as to enable Electronic Fund Transfer facility etc. These were claimed to be reimbursement of expenses, which were supported by third party invoices. The A.O. held that these payments are in the nature of royalty falling within the purview of sec. 9(1)(vi) of the Act and hence the assessee should have deducted Tax at source on the above said payment. In reply, the assessee submitted that the reimbursement represents a pure recovery of third party costs incurred by the overseas group entity for the benefit of the assessee. It was submitted that the payment of IT cost is not liable to income tax and thus there was no liability on the assessee to d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s viz: MBL Investments Ltd, and SABMiller India Limited (Now SKOL Beer Manufacturing Co. Ltd.). The A.O. also observed that the assessee had borrowed loans from various banks at a higher rate of interest ie. @ 12% whereas it has charged interest @ 6% from its group companies. Accordingly, the A.O. required the assessee to explain as to why the proportionate amount of interest should not be disallowed. The A.O. after considering the submissions made by the assessee, disallowed the proportionate amount of interest @ 6% on the sum of ₹ 11,79,47,601/- which worked out to ₹ 36,56,856/-. The Ld DRP also agreed with the view taken by the A.O. and held that borrowed funds should have been used for the purpose of business of the assessee and not for the purpose of its associates. It was also held that the funds advanced were not on account of commercial expediency. 16. At the time of hearing, the ld. Representatives of both sides agreed that an identical issue was considered by the Co-ordinate bench in the case of Skol Breweries Ltd. (supra) and restored the matter to the file of the AO to verify the contentions of the assessee that the advances were given out of own funds an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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