Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Advanta India Limited Versus Assistant Commissioner of Income Tax, Circle 1 (1) , Bangalore

2015 (12) TMI 1406 - ITAT BANGALORE

Transfer pricing adjustment - DRP/AO/TPO benchmarking the foreign currency loan transaction using the fixed deposit rate of scheduled commercial banks and ignoring the internal CUP analysis performed by the assessee - Held that:- The comparable adopted by the assessee, in his transfer pricing analysis, is the rate at which the Exim Bank of India had extended similar foreign currency loan to the assessee, and the TPO has rejected the same on the basis that such a rate constitutes costs of funds t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d on the basis that the foreign currency loan, on similar terms, to the AE could be an arm’s length transaction - Decided in favour of assessee.

Adjustment on account of interest on outstanding interest receivable from AE - Held that:- In the present case, however, ALP adjustment by way of charging interest is in respect to delay in payment of interest itself, and APL determination of interest is also before us. While dealing with the preceding ground of appeal, we have already held t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

im Bank will apply mutatis mutandis in this fact situation as well.- Decided in favour of assessee for statistical purposes.

Determining the ALP of the Guarantee fee @ 2% of the Guarantee amount extended by the appellant on behalf of its AE - DRP/AO/TPO rejecting the internal Comparable Uncontrolled Price (‘CUP’) submitted by the Appellant and instead considering external data - Held that:- There is no scientific basis for coming to the conclusion that 2% guarantee commission is an ar .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

atter to the file of the TPO for the limited purposes of ascertaining the arm’s length price of the corporate guarantee issued by the assessee. The assessee is directed to fully cooperate by furnishing necessary information and inputs to the TPO and assist in expeditious disposal of the remanded matter. As the matter is being remitted to the file of the TPO for adjudication de novo, we consider it appropriate to give liberty to the assessee to raise such legal and factual arguments as the assess .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

covered against the assessee, by Hon’ble Karnataka High Court’s judgment in assessee’s own case for the assessment year 2001-02, inasmuch as the matter has been thus remitted to the file of the Assessing Officer for fresh adjudication.

Disallowance under section 40(a)(ia) of the Act on account of non-deduction of tax at source on procurement and processing charges - Held that:- The payments did not attract tax deduction under section 194C and, as such, there is no occasion for invoki .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

come tax return, we uphold the grievance of the assessee and direct the Assessing Officer to delete this disallowance - Decided in favour of assessee

Depreciation on goodwill - Held that:- A petition dated 16th April 2015 seeking admission of additional evidence in support of this grievance, and contended that “on becoming aware of the decision of Hon’ble Supreme Court in the case of CIT vs SMIF Securities Limited (2012 (8) TMI 713 - SUPREME COURT ), the assessee has raised a ground i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cal purposes. - IT (TP) A No.: 1643/Ban/12 - Dated:- 30-6-2015 - Pramod Kumar AM and P Madhavi Devi JM For The Appellant : Kirit Kamdar For The Respondent : TSN Murthy ORDER Per Pramod Kumar, AM: 1. By way of this appeal, the assessee appellant has challenged correctness of the Assessing Officer s order dated 16th October 2012, in the matter of assessment under section 143(3) r.w.s. 144 C of the Income Tax Act, 1961, for the assessment year 2007-08. 2. In the first ground of appeal, the assess .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

: - Use of the fixed deposit interest rate of scheduled commercial bank as a comparable to make an adjustment on account of interest on outstanding interest receivable from the AE; and - Use of an adhoc rate of 2% in determining the Arm s Length Price (ALP) of the Guarantee fee for the guarantee extended by the Appellant on behalf of its AE. 3. Learned counsel for the assessee submits that he does not wish to pursue this ground of appeal. It is submitted that the grievances raised in this ground .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nd ignoring the internal CUP analysis performed by the assessee. 6. To adjudicate on this ground of appeal, only a few undisputed material facts, as culled out from material on record, need to be taken note of. The assessee has granted a loan of INR 1454,18,75,000 to its directly owned Amsterdam based subsidiary, namely Advanta Holdings BV, and has earned an interest income of ₹ 11,07,32,951 in respect of the same. The assessee has claimed this transaction at arm s length price, by applyin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

matter came up for examination before the Transfer Pricing Officer, the approach adopted by the assessee was held to be incorrect. The TPO was of the view that since the assessee was the tested party, the right comparable would be a similar loan granted by the assessee to unrelated parties in similar situation as the subsidiaries. It was also emphasized that the loan transaction was an unsecure transaction and that no security was offered by the subsidiary to which the loan was granted. The TPO .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ould like to make investments, in the form of loan outside India and that too without any security, as the interest returns in India would be higher than those prevailing in the developed markets . Without prejudice to this line of reasoning, the TPO also stated that even if LIBOR is sought to be considered, the LIBOR would have to be (the rates at which) Indian companies go for External Commercial Borrowings . 8. The TPO also observed that a foreign associated enterprise would come to Indian as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tes............particularly when the Indian entity itself seeks a loan to extend it further on . The TPO stated that the availability of required loan to the AE abroad on similar terms is not evidenced . The TPO proceeded to the opportunity cost of the funds used for the loan to subsidiary in the instant case is conservatively taken as 10.5% which is the FD rate of scheduled banks since IPO proceeds could have been invested in a bank and could have earned interest, at the minimum, at fixed depos .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

party, i.e. Advanta India Pvt Ltd, is located in India and the economic conditions prevailing in India are the relevant factors that have to be taken into account for benchmarking the interest rates. Hence, the yield on corporate bonds has to be taken as benchmark. After careful consideration of the assessee s submissions, we are of the view that the TPO has rightly computed the arm s length price in respect of interest payment and interest receivable. We decline to interfere with the TPO approa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he aforesaid issue is squarely covered by a decision of the coordinate bench, in the case of Bharti Airtel Limited Vs ACIT [(2014) 161 TTJ 283 (Del)], wherein the coordinate bench as observed, inter alia, as follows: 61. We have noted, as has been noted in the assessment order, DRP order and TPO orders as well, that the advances to subsidiaries are in foreign currencies i.e. in British Pounds, US Dollars and Canadian Dollars. In these circumstances, the interest rates on rupee bonds and debts, w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n bond market and interest rate are thus wholly irrelevant. As for TPO's observation to the effect that the tested party being the assessee before us, i.e. lender, the prevalent interest that could be earned by the taxpayer by advancing loan to an unrelated party in India, we can only point out that the interest rate on foreign currency loans being qualitatively different, even if we have to see the interest that the assessee would have earned, we have to see the interest that the assessee w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and observed that, The loan in question was given in foreign currency i.e. US $ and was also to be repaid in the same currency i.e. US $. Interest rate applicable to loans granted and to be returned in Indian Rupees would not be the relevant comparable. Even in India, interest rates on FCNR accounts maintained ……….. The interest rates vary and are thus dependent on the foreign currency in which the repayment is to be made. The same principle should apply . 14. Clearly, there .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

iness situation, and, such an exercise would anyway amount to sitting in judgment about how should an assessee conduct his business. On the first principles, all that the ALP adjustment seeks to do is to neutralize the impact of intra AE relationship in any international transaction with the AEs. That object can be achieved by substituting the price at which such a transaction has been entered into with the AEs with the hypothetical price at which the same transaction would have been entered int .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hether the consideration for which the assessee has advanced this loan is the same in the event of the assessee entering into similar hypothetical transaction with an independent enterprise. Therefore, the right question that the TPO should have addressed himself to was as to what would have been the price, i.e. the interest rate, at which the assessee would have given similar loan to an independent enterprise. 15. The currency in which the loan transaction takes place is of vital importance and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

onment, the increase in terms of money held in a currency is as important as the worth of the currency in which it is held. Therefore, when arm s length price of an international loan transaction, which is designated in a hard currency, is to be ascertained, the interest rate on rupee transactions in India has no relevance at all. 16. The comparable adopted by the assessee, in his transfer pricing analysis, is the rate at which the Exim Bank of India had extended similar foreign currency loan to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ank is offering the foreign currency loan to the assessee at a particular price, it is reasonable to proceed on the basis that the foreign currency loan, on similar terms, to the AE could be an arm s length transaction. In the case of VVF Ltd Vs DCIT [(2010) TII 04 ITAT (Mum TP)] and dealing with a materially similar situation, a coordinate bench of this Tribunal had held that, The financial position and credit rating of the subsidiaries will be broadly the same as the holding company, and, ther .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ti Airtel Ltd (supra) and VVF Ltd (supra), and, respectfully following these views, uphold the grievance of the assessee. The ALP adjustment of ₹ 3,01,99,896 is, accordingly, deleted. 17. Ground no. 2 is thus allowed. 18. In ground no. 3, the assessee has raised the following grievance: On the facts and in the circumstances of the case and in law, the learned DRP/AO/TPO erred in making an adjustment of ₹ 1,02,98,982 on account of interest on outstanding interest receivable from AE. 1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ident from the following observations: II. Interest on interest receivable from AE outstanding Table 2 - Interest on interest payment due Interest on unpaid interest (Table 1) from 30 Sep 07 to 31 Mar 2008 (6 months) @ 10.5% 7,398,974 On opening balance Interest rcvbl opening balance (1 apr 2007) Interest received out of opening balance 55,238,232 44,874,238 Interest on unpaid interest (out of opening balance of 1 Apr 2007) for an average period of 6 months 2,900,007 Total interest on interest 1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d (in Oct and Feb) of ₹ 44.8 million in the year goes towards clearing this interest dues. Taking only the first 6 months for the year as due period (the payment are made in the 2nd half), the interest on this interest due of ₹ 55 million amount to ₹ 29 lacs (see Table 2). The total interest due is ₹ 10298982. This is the arm s length price of the interest receivable from the AE whereas the taxpayer has not charged any interest on the amounts due. 20. The assessee did rai .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

[(2011) 43 SOT 295 (Bom)], and contended that interest on outstanding balance could not be charged by way of ALP adjustment. That decision, however, is of little assistance to the cause of the assessee since that was a case in which the outstanding balances were in respect of the ordinary business transactions and it was in this context that the Tribunal had observed as follows: A continuing debit balance, in our humble understanding, is not an international transaction per se, but is a result o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ntinuing debit balance as a result of commercial transactions, such as sales etc, is qualitatively different from a continuing debit balance in respect of interest receivable. While interest for the normal period of delay, during which the amount thus remains receivable and during which actual realization of proceeds is not effected, is inbuilt in the transaction value itself and such delays are thus duly factored at the stage of determination of transaction value, interest receivable is altoget .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, is more of a rule rather than an exception, while charging of interest on overdue sales invoices is more of an exception rather than a rule. Therefore, the decision in the case of Nimbus Communications (supra), which was in the context of the continuing debit balance as a result of international transactions, may not have any relevance in this case. In the present case, however, ALP adjustment by way of charging interest is in respect to delay in payment of interest itself, and APL determinati .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

te of interest and terms applicable in a materially similar situation of delay in payment of interest to Exim Bank will apply mutatis mutandis in this fact situation as well. 24. Ground no. 3 is thus allowed for statistical purposes. 25. In ground no. 4, the assessee has raised the following grievance: On the facts and in the circumstances of the case and in law, the learned DRP/AO/TPO erred in determining the ALP of the Guarantee fee @ 2% of the Guarantee amount extended by the appellant on beh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ct of the nature and further details of the guarantee were not furnished by the assessee. While it was contended by the assessee that guarantee is incidental to the business and that the assessee has not derived any other benefit from the same, the TPO was of the view that the AE of the taxpayer was a loss making entity………with accumulated losses to the tune of USD 91,52,592 and hence minimum guarantee would have been 2% if such an entity had tried for a bank guarantee from a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

btaining guarantee from thetaxpayer, the AE s credit rating almost equals that of the taxpayer and thus there is benefit to the AE in terms of interest rate as well and that since the assessee has not charged any guarantee commission, whereas a 2% guarantee commission would have been reasonable, the TPO computed ALP of this guarantee at 2% of the amount converted into INRs by adopting exchange rate of 1USD=40INR. It was in this backdrop that an ALP adjustment of ₹ 16,00,000. Interestingly, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er considering all the issues, the TPO has computed arm s length price of the corporate guarantee at 2% which is minimum , that the AE of the assessee is a loss making entity and it has got huge accumulated losses and that normally the banks will charge bank guarantee of 14% whereas the TPO has charged 2% arm s length price, which, according to us, in is order . It was in this backdrop that the Assessing Officer proceeded with ALP adjustment of ₹ 16,00,000 in respect of the corporate guara .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Chennai)]. In the case of Bharti Airtel Limited (supra), the coordinate bench, speaking through one of us, had observed as follows: 24. ……………… we consider it appropriate to begin by dealing with the fundamental question as to whether issuance of corporate guarantees, which donot involve any costs to the assessee, can indeed be subjected to the arm s length price adjustment. We find that Section 92(1) provides that, (a)ny income arising from an internatio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or more associated enterprise s, either or both of whom are non -residents, in the nature of purchase, sale or lease of tangible or intangible property, or provision of services, or lending or borrowing money, or any other transaction having a bearing on the profits, income, losses or assets of such enterprises and shall include a mutual agreement or arrangement between two or more associated enterprises for the allocation or apportionment of, or any contribution to, any cost or expense incurre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ms of the relevant transaction are determined in substance between such other person and the associated enterprise. Explanation1 -For the removal of doubts, it is hereby clarified that - (i) the expression "international transaction" shall include - (a) the purchase, sale, transfer, lease or use of tangible property including building, transportation vehicle, machinery, equipment, tools, plant, furniture, commodity or any other article, product or thing; (b) the purchase, sale, transfe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e or sale of marketable securities or any type of advance, payments or deferred payment or receivable or any other debt arising during the course of business; (d) provision of services, including provision of market research, market development, marketing management, administration, technical service, repairs, design, consultation, agency, scientific research, legal or accounting service; (e) a transaction of business restructuring or reorganisation, entered into by an enterprise with an associa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

; (c) artistic related intangible assets, such as, literary works and copyrights, musical compositions, copyrights, maps , engravings; (d) data processing related intangible assets, such as, proprietary computer software, software copyrights, automated databases, and integrated circuit masks and masters; (e) engineering related intangible assets, such as, industrial design , product patents, trade secrets, engineering drawing and schematics, blueprints, proprietary documentation; (f) customer re .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

air rights, water rights; (j) goodwill related intangible assets, such as, institutional goodwill, professional practice goodwill, personal goodwill of professional, celebrity goodwill, general business going concern value; (k) methods, programmes, systems, procedures, campaigns, surveys, studies, forecasts, estimates, customer lists, or technical data; (l) any other similar item that derives its value from its intellectual content rather than its physical attributes. . [1Inserted by the Finance .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

operty, b. in the nature of provision of services, c. in the nature of lending or borrowing money, or d. in the nature of any other transaction having a bearing on the profits, income, losses or assets of such enterprises 3. An international transaction shall include shall include a mutual agreement or arrangement between two or more associated enterprises for the allocation or apportionment of, or any contribution to, any cost or expense incurred or to be incurred in connection with a benefit, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

brought on the statute vide Finance Act, 2012. 27. This Explanation states that it is merely clarificatory in nature inasmuch as it is for the removal of doubts , and, therefore, one has to proceed on the basis that it does not alter the basic character of definition of international transaction under Section 92 B. Clearly, therefore, this Explanation is to be read in conjunction with the main provisions, and in harmony with the scheme of the provisions, under Section 92 B. Under this Explanatio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ered transactions in the nature of purchase, sale or lease of tangible or intangible property . The only additional expression in the clarification is use as also illustrative and inclusive descriptions of tangible and intangible assets. Similarly, clause (d) deals with the provision of services, including provision of market research, market development, marketing management, administration, technical service, repairs, design, consultation, agency, scientific research, legal or accounting servi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es discussed above or by other specific segments covered by Section 92 B, namely borrowing or lending money. 29. The remaining two items in the Explanation to Section 92 B are set out in clause (c) and (e) thereto, dealing with (a) capital financing and (b) business restructuring or reorganization. These items can only be covered in the residual clause of definition in international transactions, as in Section 92B(1), which covers any other transaction having a bearing on profits, incomes, losse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rther highlighted in clause (e) of the Explanation dealing with restructuring and reorganization, wherein it is acknowledged that such an impact could be immediate or in future as evident from the words irrespective of the fact that it (i.e. restructuring or reorganization) has bearing on the profit, income, losses or assets of such enterprise at the time of transaction or on a future date . What is implicit in this statutory provision is that while impact on profit, income, losses or assets is .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ertainty, and only its crystallization may take place on a future date, there is no such certainty in the former case. In the case before us, it is an undisputed position that corporate guarantees issued by the assessee to the Deutsche Bank did not even have any such implication because no borrowings were resorted to by the subsidiary from this bank. 31. In this light now, let us revert to the provisions of clause (c) of Explanation to Section 92B which provides that the expression international .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing inter alia any guarantee, deferred payment or receivable or any other debt during the course of business, as will have a bearing on the profits, income, losses or assets or such enterprise . This pre-condition about impact on profits, income, losses or assets of such enterprises is a pre-condition embedded in Section 92B(1) and the only relaxation from this condition precedent is set out in clause (e) of the Explanation which provides that the bearing on profits, income, losses or assets cou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssets set out in Section 92B(1) may not be fulfilled. For example, an enterprise may extend guarantees for performance of financial obligations by its associated enterprises. These guarantees donot cost anything to the enterprise issuing the guarantees and yet they provide certain comfort levels to the parties doing dealings with the associated enterprise. These guarantees thus donot have any impact on income, profits, losses or assets of the assessee. There can be a hypothetical situation in wh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e debit balances donot cost anything to the person allowing such use of funds. The situations can be endless, but the common thread is that when an assessee extends an assistance to the associated enterprise, which does not cost anything to the assessee and particularly for which the assessee could not have realized money by giving it to someone else during the course of its normal business, such an assistance or accommodation does not have any bearing on its profits, income, losses or assets, a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

, and there has to be some material on record to indicate, even if not to establish it to hilt, that an intra AE international transaction has some impact on profits, income, losses or assets. Clearly, these conditions are not satisfied on the facts of this case. 29. In the case of Bharti Airtel (supra), it was an undisputed position that the issuance of the guarantee did not cost the assessee anything and it was for this reason that the coordinate bench concluded that the issuance of guarantee .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n admitted position that the assessee did incur costs on issuance of this guarantee (i.e. payment of ₹ 4,39.005 to the ICICI Bank in this respect), and, for that reason, the issuance of guarantee indeed had a bearing on the profits and income of such enterprise. It cannot, therefore, be said that the issuance of guarantees, on the facts and in the circumstances of this case, did not constitute an international transaction . Learned counsel, therefore, does not derive any advantage from Bha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ascertainment of the ALP. The assessee has not even given complete details about the guarantees issued by the assessee, nor has he offered any assistance whatsoever in ascertaining the arm s length price of the corporate guarantee issued by the assessee. In view of these discussions, as also bearing in mind entirety of the case, we deem it fit and proper to remit the matter to the file of the TPO for the limited purposes of ascertaining the arm s length price of the corporate guarantee issued by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ment is restored to the file of the TPO for adjudication de novo in accordance with the law, by way of a speaking order and after giving yet another opportunity of hearing to the assessee. 33. Ground no. 4 is thus allowed for limited statistical purposes in the terms indicated above. 34. In ground nos. 5, 6 and 7, which are listed as corporate tax grounds of appeal nos. 1, 2 and 3 in the memorandum of appeal, the assessee has raised the following grievances: 1. On the facts and in the circumstan .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is issue is concerned, learned representatives fairly agree that the issue is covered against the assessee, by Hon ble Karnataka High Court s judgment dated 18th July 2014 in assessee s own case for the assessment year 2001-02, inasmuch as the matter has been thus remitted to the file of the Assessing Officer for fresh adjudication. A copy of this judgment has been placed before us at pages 158 to 184 of the compilation of papers before us. Learned counsel for the assessee, however, hastens to p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ted 18th July 2014. As for the matter being pending for consideration before Hon ble Supreme Court, in case the Assessing Officer has the benefit of this adjudication before finalizing his take, he shall be obviously be guided by the same as well. However, merely because the matter has not reached finality, it is not open to us to disregard the binding views of Hon ble jurisdictional High Court. With these discussions, this issue is restored to the file of the AO. 37. Ground nos. 5, 6 and 7 in t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

39. The relevant material facts are like this. During the course of the assessment proceedings, the Assessing Officer noted that the assessee had paid amounts in excess of ₹ 50,000 per person per year, without deduction of any tax at source, in respect of the seed procurement and processing charges. The AO was of the view that the payments, having been made in violation of the tax deduction at source obligations of the assessee, are disallowable under section 40(a)(ia). The DRP also agreed .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in the paperbook at pages 124 to 128 and 154 to 157. Learned Departmental Representative, however, relied upon the stand of the AO and the DRP. 40. We see no reasons to take any other view of the matter than the view so taken by the coordinate benches in assessee s own case. Respectfully following the same, we uphold the grievance of the assesse and direct the Assessing Officer to delete the impugned disallowance of ₹ 5,20,47,822. 41. Ground no 8 in this appeal, which is also numbered as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t the issue is covered, by Hon ble jurisdictional High Court s judgment in assessee s own case (supra), in favour of the assessee. There is no dispute that the amounts were paid before the filing of the relevant return of income, even though these payments were admittedly beyond the due date of making payments under the respective legislation. 44. Respectfully following the esteemed views of Hon ble jurisdictional High Court in assessee s own case, and in the light of undisputed factual position .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

section 32 of the Act amounting to ₹ 38,75,000/- ought to be allowed on goodwill arising on acquisition of Unicorn Seeds Pvt. Ltd. 47. So far as this grievance of the assessee is concerned, the relevant material facts are as follows. During the course of the assessment proceedings, the Assessing Officer noted that the assessee had acquired the business of Golden Seeds Pvt Ltd for a consideration of ₹ 1.55 crores, and, it was in this respect that the assessee had claimed depreciation .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version