TMI Blog2017 (9) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... any doubt that though claimed the expenditure and debited to the profit and loss account the sums of ₹ 13,22,53,000 spent for acquisition of business and a sum of ₹ 5,65,90,030 the expenditure which is allegedly reimbursable, during the assessment year 2011-12, the assessee voluntarily withdrew such claim in the revised computation of income and offered the same for tax. Whether or not the sum of ₹ 13,21,53,000 was capital expenditure, the fact remains that no deduction was claimed and tax was paid on it. Coming to the contention of the Revenue that the said amount was shown as revenue expenditure in the earlier year, it is patent to note that the revised computation for the assessment year 2011-12 was filed on May 25, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44,13,490 was credited to the profit and loss account, we hold that the assessee has rightly deleted the said amounts from computation of income for the assessment year 2012-13 though the same was credited to the profit and loss account. It is only an adjustment of book entries and there is no real income for the assessment year 2012-13. However, the sum representing the 4 per cent. of mark-up as per the transfer pricing agreement to a tune of ₹ 21,76,540 is revenue in nature and the income of the assessee during the assessment year 2012-13. Therefore, the additions of ₹ 13,21,53,000 and ₹ 5,44,13,490 are liable to be deleted, whereas the sum of ₹ 21,76,540 has to be sustained. We, therefore, direct the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the assessee had undertaken international transaction with its associated enterprises valuing more than 15 crores as such under section 92CA of the Act, the matter was referred to the Transfer Pricing Officer for determining the arm's length price. Draft assessment order prepared thereafter was objected to by the assessee before the Dispute Resolution Panel-1 and pursuant to the orders dated November 4, 2016 the Assessing Officer passed the assessment order dated January 30, 2017 assessing the income of the assessee at ₹ 26,12,49,555, while making the addition of a sum of ₹ 13,21,53,000 in respect of the claim made by the assessee as capital receipt and a sum of ₹ 5,65,90,190 in respect of the claim made by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eleted during the computation of income. However, the Assessing Officer as well as the Dispute Resolution Panel while labouring under the impression that the cost reimbursement agreement between the assessee and the parent company of the assessee was only an afterthought and there is no presumption that every reimbursement of expenditure would be capital in nature. In the circumstances, the learned authorised representative submits that since the entire amount of ₹ 18,63,61,346 was offered to tax during the assessment year 2011-12 the same cannot be brought to tax during the assessment year 2012-13 merely because of the book entries and submitted that the tax has to be charged not on the book entries but on the real income only. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red to section 114(1)(g) of the Indian Evidence Act to submit that the evidence which could be and is not produced would, if produced, by unfavourable to the person who withholds it. 5. Having heard the arguments we have carefully gone through the record. Absolutely there is no dispute and on the other hand it is acknowledged by the assessment order for the assessment year 2011-12, that in the computation of income for the assessment year 2011-12 originally the assessee has claimed the deduction of an expenditure of ₹ 19,22,37,523. Having debited the same in their profit and loss account, it is also an admitted fact, that subsequently during the revised computation of income the assessee themselves had added back a sum of ₹ 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011-12 was filed on May 25, 2012 i.e., subsequent to the cost reimbursement agreement that is to be found it page Nos. 63 to 64 of the paper book. All this is much earlier to the assessee filing their return of income for the assessment year 2012-13 on November 27, 2012. Therefore, it cannot be said that it is an afterthought for the assessee to put forth the prior period expenses in the current year. It is borne out by the record that by the date of the revised computation and the filing of the return for the assessment year 2012-13, the revised computation for the assessment year 2011-12 was filed, wherein the claim for deduction of ₹ 18,63,61,346 was withdrawn. Therefore, we are not inclined to accept the contention of the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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