TMI Blog2017 (9) TMI 1648X X X X Extracts X X X X X X X X Extracts X X X X ..... the Asst Year 2011-12 is allowed. Short TDS credit - tds credit denied - Held that:- AO while framing the final assessment order had not carried out the directions of the ld DRP. Once the assessee produces the TDS certificates before the ld AO in support of its claim for credit of TDS, the duty of the ld AO is to grant the same on getting satisfied whether the relatable income thereon has been duly offered to tax by the assessee in accordance with the provisions of the Act. Hence we direct the ld AO to grant the credit of TDS after verification of the fact whether the relatable income thereon is offered to tax Provision for warranty allowability - Held that:- Provision for warrant is an ascertained liability based on the claims made by WBSEDCL during the year under appeal for which the liability to incur the same had definitely arisen during the year under appeal and accordingly eligible for deduction in the year of arising of liability. Entire provision for warranty in the sum of ₹ 206.68 lakhs would be squarely allowed as deduction in the year under appeal under the normal provisions of the Act. Whether said provision for warranty would have to be construed as asce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders of the assessee on record for the Asst Year 2014-15 u/s. 143(3) of the Act dated 26.12.2016, wherein this aspect has been duly examined by the ld AO in the assessment and deduction was duly granted by him in the assessment. In view of these facts and findings, we hold that the provision for interest payable to suppliers registered under MSMED Act, 2006 in the sum of ₹ 29,21,911/- is only an ascertained liability and need not be added back to the book profits computed u/s. 115JB - IT Appeal Nos. 584 & 687 of 2015 and 549 & 619 (Kol.) of 2016 - - - Dated:- 13-9-2017 - Aby. T. Varkey, Judicial Member And M. Balaganesh, Accountant Member G. Mallikarjuna, CIT-DR for the Appellant. Kamal Sawhney, AR for the Respondent. ORDER M. Balaganesh, Accountant Member These appeals of the assessee as well as the revenue arise out of the proceedings for the Asst Years 2010-11 and 2011-12 of the Learned Dispute Resolution Panel (DRP) dated 29.12.2014 and 16.12.2015 respectively in which directions are given to the Learned AO u/s 144C(5) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). As some of the issues involved in both the ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benchmarked separately applying the most appropriate method (MAM). 4.2 The international transactions entered into by the assessee under each of the above depicted segments, have been summarized below: International Transactions of the assessee with its associated enterprises Segment of the assessee Amount (Rs.) Import of raw materials components Manufacturing segment -Domestic Sales 1,06,57,099 Export of finished goods Manufacturing Segment -Export 9,73,74,896 Purchase of finished goods Trading segment 36,40,613 Payment of management fees Different class of transactions - benchmarked separately 7,22,96,951 Reimbursement of expenses 78,47,460 Payment of Royalty 2,39,63,552 Software development - Export of Services Service Segment 16,79,99,092 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,73,74,896 Import of raw materials components Manufacturing Segment- Domestic Cost Plus Method (CPM) Associated Enterprise 1,06,57,099 Purchase of finished goods Trading segment Resale Price Method (RPM) Appellant 36,40,613 4.7 The assessee has submitted in its TP study report , the segmentation of its business segments into manufacturing segment, trading segment and service segment. Further, the manufacturing segment was further classified into 'manufacturing for the domestic market' and 'manufacturing for the export market' for transactions of purchase of raw material and sale of finished goods respectively. Each of the aforesaid segments of the assessee is based on uniqueness of functions performed and risks assumed. It submitted that the activities undertaken and the international transactions proposed to be benchmarked under the two segments are distinct from one another and hence the assessee had benchmarked the activities separately in its TP study report. 5. Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f materials to assessee with sale of materials to similar companies operating in AEs region. As a result, the assessee found that the margins earned by the AEs were lower than the comparables' margin and accordingly the transaction was determined to be at ALP. 6.1 The ld TPO selected the tested party to be the assessee itself. He adopted the TNMM as the MAM and the PLI of OP / Sales . With regard to the benchmarking done by the assessee, the ld TPO ignored the relevant 'Manufacturing-Domestic Segment' (Rs 1.07 crores) profitability and considered the margin of 'entire meter segment' (Rs 194.07 crores) which also encompasses profit from third party transactions accounting for 99.45% of the total segment. As a result, the ld TPO identified comparable companies of his own to arrive at the arm's length margin of 15.61% thereby arriving at adjustment of ₹ 16,64,527/- . This action of the ld TPO was approved by the ld Dispute Resolution Panel (DRP). Aggrieved, the assessee is in appeal before us. 7. Purchase of finished goods (Trading Segment) The assessee had justified the Arm's Length nature of the aforesaid international transactions selectin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the specific characteristics of the property transferred or services provided in either transaction ; (b) the functions performed, taking into account assets employed or to be employed and the risks assumed, by the respective parties to the transactions. 9.1 He submitted that the functions performed and risk assumed by the assessee in case of the international transactions covered under the segments i.e 'Manufacturing - Domestic Segment', 'Manufacturing - Export Segment' and 'Trading Segment' are distinct and separate from one another. It was explained that with regard to 'Manufacturing-Domestic Segment', the assessee undertakes full-fledged marketing efforts to secure customer contracts. It has to ensure appropriate application of licensed technology from the AE for manufacturing of products to meet customer requirement and satisfaction. The assessee also has to bear product performance risks towards end customers, in addition to bearing the credit risk with respect to its domestic operations. Whereas under 'Manufacturing-Export Segment' the assessee receives product specification from its AE and accordingly manufactures and supplies t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... principles and technicalities laid down in these guidelines :- D.1.2. Functional analysis Para 1.51 In transactions between two independent enterprises, compensation usually will reflect the functions that each enterprise performs (taking into account assets used and risks assumed). Therefore, in delineating the controlled transaction and determining comparability between controlled and uncontrolled transactions or entities, a functional analysis is necessary. This functional analysis seeks to identify the economically significant activities and responsibilities undertaken, assets used or contributed, and risks assumed by the parties to the transactions. 9.5 He submitted that the ld TPO had failed to decipher that FAR analysis is one of the critical factors in establishing the ALP of the international transaction and reiterated the fact that functions undertaken and risks assumed for the aforesaid international transactions are completely different and hence a collective benchmarking analysis for the same would distort the principles of transfer pricing and will render the comparison defective. He stated that where the international transaction could be spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of arm's length conditions, the arm's length principle should be applied on a transaction-by-transaction basis. However, there are often situations where separate transactions are so closely linked or continuous that they cannot be evaluated adequately on a separate basis.... 9.8 The ld AR also placed reliance on the United Nations TP Manual vide para B.2.3.1.11 of the document which states as under:- Evaluation of separate and combined transactions B.2.3.1.11 The transfer pricing analysis should ideally be made on a transaction-by- transaction basis. However, there are cases where separate transactions are so closely linked that such an approach would not lead to a reliable result. Where transactions are so closely interrelated or continuous that application of the arm's length principle on a transaction-by-transaction basis would become unreliable or cumbersome, transactions are often aggregated for the purposes of the analysis. . 9.9 The ld AR argued that it could be observed from the above readings of International Guidelines that both OECD TP Guidelines and UN TP Manual have given primary preference to undertake a transaction by transaction anal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... international transactions with associated enterprises. In our view, assessee's functions, risk and assets FAR considerations, which are given in the above table, deserves to be merited. TPO did not appreciate the assessee's transactions correctly and applied entity level bench marking on TNMM method by combining assessee's all international transactions with associated enterprise without justification. 7.3 Our view is supported by ITAT judgments - Mumbai Bench in the cases of UCB India (P) Ltd. v. ACIT (2009) 30 SOT 95 (Mum.); ACIT v. Star India Ltd. (ITA NO.s 3585 3846 (M) of 2006); and Kolkata Bench in the case of Development Consultants (P) Ltd. (2008) 23 SOT 455 (Kol.). All these cases clearly lay down that ALP would be determined based on the nature of service provided by assessee for each class of transaction based on various factors and analysis. In the case of Star India Ltd. (supra), also the TPO treated all the activities of the assessee as one and determined the ALP at entity level without appreciating that one cannot compare the FAR of a principal and agent on same footing. 7.4 In our view, in the assessee's case there are different segmental a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions. The assessee had merely camouflouged the entire gamut of transactions by bifurcating into different segments which are not at all required in the instant case. In support of his argument that bundled approach is permitted, he placed reliance on the OECD Guidelines under the caption 'Evaluation of a taxpayer's separate and combined transactions' in para 3.9 and 3.11 thereon which are reproduced hereunder:- 3.9 Ideally, in order to arrive at the most precise approximation of arm's length conditions, the arm's length principle should be applied on a transaction-by- transaction basis. However, there are often situations where separate transactions are so closely linked or continuous that they cannot be evaluated adequately on a separate basis. Examples may include 1. Some long-term contracts for the supply of commodities or services, 2. Rights to use intangible property, and 3. Pricing a range of closely-linked products (e.g. in a product line) when it is impractical to determine pricing for each individual product for transaction. Another example would be the licensing of manufacturing know-how and the supply of vital components to an associated manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record including the paper books filed by the assessee. We find that the growing importance of international trade, globalization and rapid rise in the number of Multinational Enterprises (MNEs) has resulted in exhaustive and meticulous research and studies in this complex area of determination of transfer price and shifting of profits from one country to another country pursuant to transactions with AEs. The transfer pricing methods have seen a measure of standardization, universal recognition and acceptability. Indian transfer pricing regulations have adopted and benefitted, from the international framework. The OECD Transfer Pricing guidelines for MNEs and tax administration and United Nations' Practical Manual on Transfer Pricing do reflect the international understanding on several aspects relating to transfer pricing. We have taken note of the saem and had referred to the two guidelines as it is found to be conducive and helpful in deciding the issues. 11.1 Sub-section (1) to Section 92 states that any income arising from an international transaction shall be computed having regard to arm's length price. It includes expense or interest arising from an internati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... brought to tax. Misreporting, if any, on account of non- arm's length conditions resulting in lower profits, is corrected. 11.3 The assessee had undertaken the transactional level analysis which has been rejected by the ld TPO and ld DRP. We find that while undertaking the transactional level analysis, the assessee had submitted the copy of certified segmental statement reflecting profitability earned by it under its various segments being' Manufacturing- Domestic', 'Manufacturing-Export' and 'Trading' Segment, which is as under:- Particular Buddi domestic (A) Joha Domestic (B) Manufacturing Domestic (A + B) Export (C) Trading (D) Service Export (E) Total Business (A + B + C + D + E) Other (F) Total Per P/L Gross Sales 1,264.884,461 619,261,078 1,884.145,539 97,374,896 7,212.696 167,999,092 2,156,732,223 - 2,156.732,223 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 538,626,614 GP 287,027,464 139,155,814 426,183,278 51,161,548 2,426,646 163,540,549 643,312,021 337,465 643,649,486 Personnel costs* 58,807,345 34,571,384 93,378,729 5,436,132 1,195,111 57,577,684 157,587,656 77,661,649 235,249,305 Depreciation* 8,608,472 12,546,670 21,155,142 1,972,885 - 5,879,162 29,007,188 28,185,018 57,192,206 Management Service fees 48,669,561 20,213,511 68,883,072 3,178,447 235,432 - 72,296,951 - 72,296,951 Royalty 15,890,180 8,073,372 23,963,552 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion is higher in case of domestic segment as against export segment (ii) segmental statement is not part of the audited financial accounts. 11.4 The assessee had addressed the aforesaid apprehensions in the following manner:- (i) Basis of allocation of expenses is not justifiable The assessee submitted that the segmental analysis has considered all direct costs apportionment on actual basis and indirect costs apportioned on sales basis. The direct costs incurred with respect to each segment which forms nearly 50% of total costs has been identified on actual basis. It is only the indirect overheads wherein one to one mapping of expense could not be ascertained has been allocated on the size of the activity in each segment. Hence the ld TPO's contention that direct cost allocation has been higher in case of domestic segment as against export segment is not warranted as allocation has been on actual basis. (ii) Segmental statement is not part of audited financial accounts The assessee submitted that there is no statutory requirement of maintaining a separate segmental accounts reflecting profitability earned by the assessee from its international transactions. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd tenure of the statute which would be meaningfully and critically determinative. This is the mandate of Section 13(2) of the General Clauses Act, 1897 (see Newspapers Ltd. v. State Industrial Tribunal AIR 1957 SC 532, Narshimha Murthy v. Susheelabai [1996] 4 SCC 644, J. Jayalalitha v. Union of India [1999] 5 SCC 138, Blue Metal Industries Ltd. v. RW Dilley [1960] 3 All ER 437, Floor v. Davis Inspector of Taxes [1979] 2 All ER 677, Sin Pon Amalgamated (H.K.) Ltd. v. Attorny General [1965] 1 All ER 225 (PC) 80. The use of expression 'class of transaction', 'functions performed by the parties' in Section 92C(1) illustrates to the contrary, that the word 'transaction' can never include and would exclude bundle or group of connected transactions. More important would be reference to meaning of the term 'transaction' in Section 92F, clause (v), which as per the said definition includes an arrangement or understanding or action in concert whether or not the same is formal or in writing, whether or not it is intended to be enforceable by legal proceedings. Rule 10A in clause (d) states that for the purpose of this Rule and Rules 10AB and 10E , the term ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of the arm's length determination is affected or corrupted. 83. We now proceed to examine the TNM Method, whether there is prohibition in applying this method on entity to entity basis, and if not, when is it permissible to apply entity to entity comparison. The discussion would also answer the question, when is clubbing or bunching or transactions permissible in TNM Method. 11.6 Hence it could be seen from the underlined portions of the aforesaid judgment, the Hon'ble Court was only trying to concur with the adoption of bundled approach as an exception by stating that it is also permissible and accepted. But the Hon'ble Court had stated the same with a rider that the said approach should be tested on the benchmarking done on the various transactions of the assessee in terms of four clauses stipulated in section 92C(3) of the Act read with the Rules. Hence it could be safely concluded that the bundled approach could be adopted only after passing the test contemplated above and it is not automatic application or it is not the mandate of law. The bundled approach, in our considered opinion, was only stated as one of the permissible methods depending upon the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6] wherein it was held that TP adjustment is to be restricted only to international transaction. 11.7 We also find that in Asst Year 2007-08 in assessee's own case in ITA No. 37 /Kol/2012 dated 3.8.2016 , this tribunal had held as under:- 5.2.13. We find that the ld DRP failed to understand the benchmarking approach as submitted by the assessee. The ld DRP did not recognize the fact that assessee was comparing AEs margin with comparable companies in AEs region rather than comparing the latter with assessee's margin earned in India (vide page 316 of the Paper Book). Thus the ld DRP summarily rejected the transaction by transaction approach adopted by the assessee. We find that the revenue had not brought anything concrete on records either factually or legally to negate the assessee's approach of determining the Arm's Length Transaction Price. 11.8 We also find that in Asst Year 2008-09 in assessee's own case in ITA No. 1623/Kol/2012 dated 3.8.2016, this tribunal had held as under:- 6.3.1. Since the assessee was able to appropriately segregate its business operations in to its various business/functional segments, the arm's length n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and sold electric meters and components worth ₹ 194.07 crores out of which goods worth ₹ 9.74 crores were exported to AE. The details of the same are enclosed in page 1296 of Part 3 of the Paper Book. For the purpose of determination of Arm's Length Price , the assessee undertook a detailed functional analysis and determined itself to be a tested party to the transaction. The assessee undertook segmental level profitability analysis to determine the profit earned from export of finished goods. The assessee also submitted a certified copy of the segmental profitability analysis before the ld TPO and ld DRP. On evaluation of the methods prescribed under the TP regulations, the assessee considered TNMM as the MAM and OP/Sales as the most appropriate PLI, which has been accepted by the ld TPO / ld DRP. Thereafter, the assessee undertook a scientific search process to identify uncontrolled comparable companies having a reasonable level of revenue from export sales. The details of the same are enclosed in page 187 of the Paper Book. 12.1 Twelve comparable companies were identified to be dealing in manufacturing of meter business having substantial level of export sales ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the materials and components to the assessee with companies engaged in similar activities, details of which are enclosed in pages 195 to 198 of Part 1 of Paper Book. The assessee has submitted the economic analysis for the consideration of the lower authorities, wherein AEs were selected as tested party for the analysis and profitability retained by them were benchmarked. The assessee provided the ld TPO with the details of margins earned by the AEs on supply of materials to the assessee. Accordingly, the comparable companies were identified and arithmetic mean was computed. The prices of such transfer of materials and components were determined to be at arm's length. 13.1 Detailed benchmarking analysis as submitted before the ld DRP and ld TPO has been provided by the assessee in pages 240-251 of Part 1 of Paper Book. A summary of the said benchmarking study has been provided herein below:- Pricing Methodology followed by Landis USA Arm's length Price of the comparable companies in US region Pricing methodology followed by Landis Greece Arm's length Price of the comparable companies in Greece region ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tested party would result in an abnormal outcome in the transfer pricing adjustments. The same could be observed from the fact that post applying TNMM, the ld TPO produced an outcome wherein the value of TP adjustment (as initially arrived of ₹ 8.90 crores) was determined to be more than the value of international transactions of ₹ 4.25 crores which is practically not possible. Therefore, to cover up the fallacy in its approach of transfer pricing analysis, the ld TPO then proportionated the value of adjustment to the value of international transaction encompassed in the manufacturing segment to arrive at an adjustment value of ₹ 43,27,604/-. We find that this is modified application of TNMM and not either as per the intention of the Act or OECD Guidelines. Hence with regard to correct application of CPM or TNMM, the Associated Enterprises of the assessee should be selected as tested party to the transaction, as being the least complex entity. Subsequently, an analysis of gross margin or net margin by applying either CPM or TNMM retained by AEs should be undertaken for benchmarking the transaction price pertaining to purchase of materials and components. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein it benchmarked the PLI (Gross Profitability) using Resale Price Method (RPM). The benchmarking was done by the assessee by comparing its Trading Segment Gross Profitability of 33.48% with Gross Profitability of Uncontrolled Comparable Companies at 22.34% operating in India and since the assessee's margin was more than the margin of comparable companies, the transaction was determined to be at ALP. This approach was even adopted by the ld TPO and ld DRP in assessee's own case for the Asst Years 2007-08 and 2008-09. There is no dispute on the selection of assessee itself as the the tested party. The dispute is with regard to the adoption of MAM and PLI by the ld TPO. The ld TPO adopted TNMM as the MAM and PLI of OP/Sales. With regard to the benchmarking done by the assessee, the ld TPO ignored the relevant 'Trading Segment (Rs 0.36 crores) profitability and considered the margin of 'entire meter segment' (Rs 194.07 crores) which also encompasses profit from third party transactions accounting for 99.81% of the total segment. The ld TPO considered the profitability of comparable companies from database and imputed adjustment as the profitability earned by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anti tampering features and communication facilities in static meters. It also did not have any dedicated Research Development wing to support any electronic business. The Central Electricity Authority vide its notification no. 502/70/CEA/DP D dated 17.3.2006 notified the Central Electricity Authority (Installation and operation of meters) Regulations, 2006 which inter alia, provided that all interface meters, consumer meters and energy accounting and audit meters shall be of static type. The meters not complying with these regulations were to be replaced as per the direction of the Central Electricity Authority. Faced with this challenge , assessee wanted to quickly set up its R D department and acquire some of the intellectual property in this field. Accordingly, it acquired a sole proprietorship unit named Technology Research - STPI (TECRES) vide Business Transfer Agreement dated 12.11.2006. The sole proprietorship concern was run by Mr. Guljeet Singh Gandhi ( an unrelated party to the assessee). Mr Gandhi through his business unit named TECRES had developed certain metering related software and was engaged in the business of sale (both domestic and export) of such softwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid business possessed. The entire team together with the domain knowledge had been transferred to the assessee pursuant to the agreement. The same had been used by the assessee for its very survival in the business of static meters to be in line with the regulations of the Central Electricity Authority and hence the use of intellectual property for the purpose of business had been duly demonstrated by the assessee. He argued that the allegation of the ld DRP is without any basis by ignoring the fact that the knowhow in the instant case has been actually acquired by paying a consideration of ₹ 4.92 crores (pursuant to independent valuation by an expert) to Mr Gandhi pursuant to business transfer agreement. He argued that the provisions of the Act in more than one section had, in its wisdom, had defined intangible assets as knowhow, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature. Hence knowhow is an independent item of intangible asset. Similarly patent is an independent item of intangible asset. The ld DRP had erred in mixing the term patent with knowhow and observed that since the knowhow acquired had not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the same was carried out by an independent expert and valuation report is enclosed in pages 25 to 82 of paper book. We find that the OECD Tranfer Pricing Guidelines for Multinational Enterprises and Tax Administrations issued in July 2010 (enclosed in pages 67 to 73 of Part A of Paper Book) provides that the term 'intangible property' includes rights to use industrial assets such as patents, trademark, trade names, designs or models. It also includes literary and artistic property rights and intellectual property such as knowhow and trade secrets. These intangibles are assets that may have considerable value eventhough they may have no book value in the company's balance sheet. We find in Para 1.155 of the OECD / G20 Base Erosion and Profit Shifting (BEPS) Report on Actions 8- 10 (2015) - Aligning Transfer Pricing Outcomes with Value Creation, issued in the year 2015, 'that in some situations, the transfer or secondment of one or more employees may, depending on the facts and circumstances, result in the transfer of valuable knowhow or other intangibles from one associated enterprise to another'. Even though in the instant case, the transaction is between two ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 32(1) of the Act defines 'knowhow' as any industrial information or technique likely to assist in the manufacture or processing of goods or in the working of a mine, oil-well or other sources of mineral deposits (including searching for discovery or testing of deposits for the winning of access thereto). Section 32(1)(ii) of the act provides for depreciation on intangible assets including knowhow, patents, copyrights, trade marks, licences, franchises, or any other business or commercial rights of similar nature, being intangible assets acquired on or after 1st day of April 1998. Hence from the combined reading of OECD, definition of knowhow and provisions of section 32 of the Act in respect of intangible assets, it could be safely concluded that depreciation is allowed on intellectual property being knowhow and such intellectual property is not required to be registered with any government authority. Know how is an intangible property, rights in respect of which can be bought and sold. As per the Law Lexicon dictionary, 'knowhow' indicates something essentially different from secret and confidential information. It indicates the way in which a skilled man does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intangible assets of the firm namely IPRs and the goodwill and submitted a fresh valuation of the assets including that of the goodwill at ₹ 79,50,000/-. The CITA disallowed depreciation on goodwill of ₹ 79,50,000/- and allowed assessee's claim of depreciation in respect of balance IPR payment. On appeal filed before the Tribunal, it was held that where assessee company took over business of a firm at value assessed by professionals and value so determined was made part of agreement, it was wrong to presume that there was a notional amount which was transacted between parties, hence disallowance of depreciation on intellectual property rights on ground that value was assigned to an asset which was non- existent was not justified. We find that the facts of the assessee's case are also similar to the facts before the Pune Tribunal supra. It is not in dispute that the turnover of the assessee had substantially increased from the year under appeal on account of activities of the R D Centre which the assessee had acquired from Mr Gandhi. The element of know how is inherent in the static meters manufactured by the assessee pursuant to acquisition of TECRES. It is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Singh Gandhi during Asst Year 2007-08. No depreciation on such goodwill was claimed in the return of income by the assessee. The assessee filed additional grounds of appeal before this tribunal for the Asst Years 2007-08 and 2008-09 claiming depreciation on goodwill in the light of the decision of the Hon'ble Supreme Court in the case of CIT v. Smifs Securities Ltd. [2012] 348 ITR 302/210 Taxman 428/24 taxmann.com 222 and the same was granted to the assessee. The assessee similarly filed additional ground of objection before held DRP for the Asst Year 2010-11 claiming depreciation amounting to ₹ 11,49,465/- on written down value of goodwill. The ld DRP did not allow the same as at that point of time, the appeal was pending before this tribunal for the Asst Years 2007-08 and 2008-09 and pending finality of the same, it felt that no decision would be warranted. It is not in dispute that the assesee had paid consideration towards acquisition of Goodwill. We find that since this issue is now settled in favour of the assessee by the order of this tribunal for the Asst Years 2007-08 and 2008-09, we hold that assessee should be allowed depreciation on goodwill amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtly allowed for statistical purposes. Revenue Appeal - Asst Year 2010-11 - ITA No. 584/Kol/2015 20. The Ground No.1 raised by the revenue for the Asst Year 2010-11 is objecting to the directions of the ld DRP to remove certain comparable companies. The adjudication of this ground becomes academic as ultimately the ld AR had proved that the international transactions had been carried out at arm's length by benchmarking its transactions with the comparables chosen by the ld TPO only. Hence the adjudication of this ground becomes academic in nature in view of our decision rendered in assessee appeal for the Asst Year 2010-11 with regard to TP issues. Accordingly, the Ground No. 1 raised by the revenue is dismissed. 21. The next ground to be decided in the appeal of the revenue is as to whether the ld DRP was justified in concluding that the services provided by the AE under the head of management services are not in the nature of stewardship activities, in the facts and circumstances of the case. 21.1 The brief facts of this issue is that the during the year, the assessee received varied intra group services from its AE, Landis + Gyr AG, Switzerland for which a paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment made by the TPO stating that From the nature of services described by the assessee, it can be seen that they were mainly for purpose of assessee's own business. While the group as a whole, might also have been benefitted from the services, such benefit to the parent company was incidental. The primary beneficiary of the services was the assessee itself. Therefore, the services rendered by the AE cannot be considered in the nature of stewardship/shareholder activity. It has been informed by the assessee that the payment for the services has been made on the cost allocated to it. 21.4 The revenue had filed an appeal against the aforesaid action of ld DRP stating that the ld DRP had erred in concluding that the services provided by the AE are not in the nature of stewardship activities. 21.5 The ld DR submitted that this issue may be remanded to the file of the ld TPO for determination of ALP of the payment of management fees in the light of various documentary evidences furnished by the assessee for the benefits derived by the assessee out of payment of management service fees for the intra group services received from its AE. In response to this, the ld AR stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dences, filed on record. Hence he argued that there is no need to remand the issue to the file of the ld TPO in this regard. The ld AR also placed reliance on the following decisions in support of his contentions that payment of management service charges for intra group services are not in the nature of stewardship activities :- (a) Co-ordinate bench decision of Delhi Tribunal in the case of AWB India (P.) Ltd. v. Addl CIT [IT Appeal No. 4454 (Delhi) of 2011, dated 22-3-2013] (b) Decision of Hon'ble Punjab Haryana High Court in the case of CIT v. Max India Ltd. [2016] 388 ITR 81/75 taxmann.com 268. (c) Decision of Co-ordinate Bench of this Tribunal in the case of Almatis Alumina (P.) Ltd. [IT Appeal No. 283/Kol/2016 and CO 23/Kol/2016]. 21.6 We have heard the rival submissions and perused the materials available on record including the paper books of the assessee filed in this regard. We find that the assessee had indeed furnished sample set of 94 emails, correspondences etc before the ld TPO which were summarily ignored by him while passing the order u/s. 92CA(3) of the Act. The ld TPO held that the payment for intra group services are in the nature of stewardsh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s different from the Transfer Pricing Officer stating that the assessee did not benefit from these services, which amounts to disallowing expenditure. That decision is outside the authority of the Transfer Pricing Officer. . . . . . . . . . . . . . . . . . . 36. In this case, the issue is whether an independent entity would have paid for such services. Importantly, in reaching this conclusion, neither the Revenue, nor this Court, must question the commercial wisdom of the assessee, or replace its own assessment of the commercial viability of the transaction. The services rendered by CWS and CWHK in this case concern liaising and client interaction with IBM on behalf of the assessee-activities for which, according to the assessee's claim-interaction with IBM's regional offices in Singapore and the United States was necessary. These services cannot as the Income-tax Appellate Tribunal correctly surmised be duplicated in India insofar as they require interaction abroad. Whether it is commercially prudent or not to employ outsiders to conduct this activity is a matter that lies within the assessee's exclusive domain, and cannot be second-guessed by the Revenue. [bracket ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28. The following aspects would require consideration in order to identify intragroup services requiring arm's length remuneration: - Whether services were received from related party. - Nature of services including quantum of services received by the related party. - Services were provided in order to meet specific need of recipient of the services. - The economic and commercial benefits derived by the recipient of intragroup services. - In comparable circumstances an independent enterprise would be willing to pay the price for such services? - An independent third party would be willing and able to provide such services? Whether payment made to AE meets ALP criterion will be determined, keeping in mind all the above factors, as well. 29. Keeping in mind the principles emanating from the aforesaid decisions, we shall now proceed to examine the material on record to see the nature of services received by the Assessee and as to whether the same were at Arm's Length. 47. In the light of the discussion in paragraphs 30 to 46, We hold that the Assessee has established the nature of services including quantum of services received by the related party, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel appearing on behalf of the respondent, submitted that for these and other services, the appellant could always have availed of the services of personnel and enterprises in India. 47. That, however, in our view, cannot be a ground for rejecting a claim for deduction. Nor can that be a ground for assuming that the consideration paid for the same is not the genuine arm's length price. Absent any law, an assessee cannot be compelled to avail the services available in India. It is for the assessee to determine whose services it desires availing of and whose goods it intends purchasing. It is certainly understandable if the assessee prefers to deal with its group entities/AEs. This is for a variety of reasons which are far too obvious to state. So long as there is no bar in law to the assessee availing the services of a particular party, the authorities under the Act must determine whether the consideration paid for the same is at an arm's length price or not. We find that this judgement had approved the earlier decision of Hon'ble Delhi High Court in the case of Cushman and Wakefield (India) (P.) Ltd.supra and also the decision of EKL Appliances supra. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,39,63,552/- (Rs. 2.40 crores) was made by the assessee. The assessee had duly documented the terms of such agreement, description of technology, technical assistance etc in the transfer pricing study report prepared and submitted for the perusal of the ld TPO vide page 209 to 215 of part I of the Paper Book. With regard to economic analysis, the assessee considered such transaction to be of different class and distinct from other transactions. Accordingly, the assessee evaluated the methods prescribed under the Indian TP regulations and determined CUP to be the MAM. For the purpose of application of CUP, the assessee identified certain agreements, following a detailed search process, which could be considered comparable with the instant transaction. Accordingly the said transaction was determined to be at arm's length. The summary of benchmarking study has been provided herein below:- Rate of Royalty paid by the assessee to its AE - 1.21% Arm's length rate of royalty as determined from Benchmarking study - 4.34% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion been satisfactorily replied to by the assessee. The assessee has been all along making payment of royalty to its AE for use of brand name, which has been allowed in the past. Considering all these facts, the proposed adjustment is not considered to be proper and is directed to be deleted. 22.3 We have heard the rival submissions and perused the materials available on record. We find that the information/documents evidencing receipt of technology/technical assistance and benchmarking analysis determining the ALP of the same has been duly submitted both before the ld TPO and ld DRP. The ld TPO without perusing and analyzing the said information concluded that the technology received by the assessee was not unique and has no avenue for future development. We find however, the ld DRP on perusing and analyzing the same information/documents, concluded that the technology/technical assistance so received was unique in nature and amount of royalty paid was reasonably justified as well. The finding given by the ld DRP on the receipt of technology/technical assistance by the assessee was not controverted by the revenue before us. It was also stated that the apprehensions raised by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affected significantly. Further, new method sofa meter tampering are invented in India. The assessee is expected from its customers and stakeholders to manufacture and deliver tamper-resistant meters. The assessee is dependant on R D team of its AE for developing specific technology to deal with tampering of meters in India. APPREHENSION 2 - Assessee failed to provide justification regarding reasonableness of the amount of royalty paid to AE The assessee submitted that the royalty is being paid by the assessee only with respect to value additions being made by the assessee from its own manufacturing process undertaken with aid of technology and technical assistance received from the AE. To establish the same, the assessee had submitted the methodology applied in determining the value of sales on which royalty is paid by the assessee to its AE. The same are enclosed in page 159 of Part I of the Paper Book. The assessee pays royalty on value of meters manufactured less the bought out components used in the meters. Therefore, it confirms that royalty is not paid by the assessee on the bought out components. As already submitted, the assessee is paying royalty not on the gross s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material information or documents in his possession on the basis of which an opinion can be formed that any such circumstances exists. In all other cases, the value of the international transaction should be accepted without further scrutiny. From the reading of the aforesaid circular, it is clear that the intention of the section 92C(3) of the Act has always been that scrutiny of international transactions of an assessee can only be done if the ld TPO can prove that atleast any one of the four conditions laid down in section 92C(3) of the Act has been satisfied. This view has been ratified by the co-ordinate bench of Bangalore Tribunal in the case of Philips Software Centre (P.) Ltd. v. Asstt. CIT [2008] 26 SOT 226 (Bang.) wherein it was held that :- The TPO or the AO needs to satisfy and communicate to the taxpayer the relevant clause under section 92C(3) which has been triggered by the assessee, which has necessitated the application of provisions of the transfer pricing provisions. In the instant case, since this was not demonstrated to the assessee, the transfer pricing order is void. We find from the order of the ld TPO that he has nowhere suggested that any of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the decisions rendered thereon would apply with equal force for this Asst Year also, except with variance in figures. For the sake of clarity, the relevant figures for Asst Year 2011-12 are reproduced below:- International Transactions of the assessee with its associated enterprises Segment of the assessee Amount (Rs.) Import of raw materials components Manufacturing segment -Domestic Sales 18,60,438 Export of finished goods Manufacturing Segment -Export 11,08,62,642 Purchase of finished goods Trading segment 5,42,103 Payment of management fees Different class of transactions - benchmarked separately 2,69,85,790 Reimbursement of expenses 19,21,994 Payment of Royalty 2,63,47,893 Software development - Export of Services Service Segment 23,75,71,347 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return u/s. 139(1) of the Act is not in dispute. This issue is settled in favour of the assessee by the decision of the Hon'ble Jurisdictional High Court in the case of CIT v. Vijay Shree Ltd. reported in 43 taxmann.com 396 (Cal HC). Respectfully following the same, the Ground No. 12 raised by the assessee for the Asst Year 2011-12 is allowed. 31. The Ground No. 17 raised by the assessee for the Asst Year 2011-12 is with regard to short credit of TDS to the tune of ₹ 2,22,966/-. The assessee claimed credit of TDS amounting to ₹ 4,63,731/- in the return of income and additional credit of TDS of ₹ 2,22,966/- vide letter dated 20.2.2015 during the course of assessment proceedings based on physical TDS certificates received and the said TDS being reflected in Form 26AS. The assessee filed all the TDS certificates to the ld AO. Credit for TDS of ₹ 2,22,966/- was not taken in the return of income as the assessee was not in possession of the TDS certificates at that point of time and had received the same subsequent to the date of filing the return. In the draft assessment order, the ld AO did not give any credit for TDS of ₹ 6,86,697/- (4,63,731 + 2,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... data based on widely accepted scientific calculation supported by information of earlier years. Accordingly, he disallowed the provision for warranty in the assessment under normal provisions of the Act. The ld AO also added the same while computing the book profits u/s. 115JB of the Act treating the same as provision made for unascertained liabilities. This action of the ld AO was upheld by the ld DRP. Aggrieved, the assessee is in appeal before us vide Grounds 11 16. 32.2 We have heard the rival submissions. From the perusal of the materials available on record, we find that the assessee had made certain supplies to West Bengal State Electricity Distribution Company Ltd (WBSEDCL in short) who had raised certain issues against the quality of the material supplied by the assessee. The issues against supplies being made within the warranty period and hence the assessee decided to provide for the warranty on the material delivered which the assessee had to replace. The provision was made for ₹ 1,85,85,000/- on this account. The ld AR stated that these were specific bookings and did not require the assistance of a sound method backed by historical trends to determine its a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to reach full warranty cost 3,072 2,648 2,432 1,676 1,357 1,287 1,485 1,474 2,040 2,831 1,905 Divided by 10 years 307 265 243 168 136 129 149 147 204 283 191 Remaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be booked 1,279 WB Specified 18,585 Increased Provision 19,864 Incurred 804 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he aforesaid decisions of the Hon'ble Apex Court, the provision in order to be recognized needs to satisfy three following parameters:- (a) an enterprise has a present obligation as a result of a past event ; (b) it is probable that an outflow of resources will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation. If these conditions are not met, then no provision could be recognized. Once these parameters are satisfied and the liability for which the provision is created is certain to result in outflow of resources of the assessee irrespective of the future conduct of the business, then the liability will be allowed as a deduction. In the instant case, the assessee as afar as the sum of ₹ 1,85,85,000/-, it satisfies all the criteria laid down i.e it is a definitive sum and is extremely certain to be incurred and is a result of the supplies made in the past. Accordingly, following the principles laid down by the Hon'ble Supreme Court supra, there is no doubt that the amount is a certainty for payment and has been incurred in the current previous year. Thus it cannot be termed as an unascertained liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and actually it favours the assessee. We also find that the Hon'ble Supreme Court in the case of Rotork Controls India (P.) Ltd. (supra) had held as under:- 11. Liability is defined as a present obligation arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits. 12. A past event that leads to a present obligation is called as an obligating event. The obligating event is an event that creates an obligation which results in an outflow of resources. It is only those obligations arising from past events existing independently of the future conduct of the business of the enterprise that is recognized as provision. For a liability to qualify for recognition there must be not only present obligation but also the probability of an outflow of resources to settle that obligation. Where there are a number of obligations (e.g., product warranties or similar contracts) the probability that an outflow will be required in settlement, is determined by considering the said obligations as a whole. In this connection, it may be noted that in the case of a manufacture and sale of one single item the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e based on scientific method on a very conservative approach by taking the average of actual warranty liability incurred in the past 10 years. The said workings were very much filed before the lower authorities. Hence we hold that the said sum represents ascertained liability during the year under appeal, although the actual quantification of the same would arise in future. It is well settled that if the assessee is following mercantile system of accounting, if the business liability has definitely arisen in accounting year, deduction should be allowed although liability may have to be quantified and discharged at a future date but what should be definite is incurring of liability. It is not in dispute that the assessee is following mercantile system of accounting. This principle has been endorsed by the Hon'ble Supreme Court in the case of Bharat Earth Movers (supra). Hence we hold that this liability of ₹ 12,79,000/- is an ascertained liability in the year under appeal based on the systematic historical data of the past wherein warranty liabilities had occurred to the assessee. Reliance in this regard is again placed on yet another finding of the Hon'ble Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to deduction from the gross receipts under section 37 of the 1961 Act. It would all depend on the data systematically maintained by the assessee. It may be noted that in all the impugned judgments before us the assessee(s) has succeeded except in the case of Civil Appeal Nos. 3506-3524 of 2009 - Arising out of S.L.P.(C) Nos. 14178-14182 of 2007 - Rotork Controls India (P.) Ltd. v. CIT, in which the Madras High Court has overruled the decision of the Tribunal allowing deduction under section 37 of the 1961 Act. However, the High Court has failed to notice the reversal which constituted part of the data systematically maintained by the assessee over last decade. (UNDERLINING IS PROVIDED BY US) 32.2.7 Accordingly we hold that the entire provision for warranty in the sum of ₹ 206.68 lakhs would be squarely allowed as deduction in the year under appeal under the normal provisions of the Act. 32.2.8 The next dispute in this regard is as to whether the said provision for warranty would have to be construed as ascertained liability or unascertained liability for computing the book profits u/s. 115JB of the Act. We have already held that all the three categories of prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the claim by the revenue that such provisions are made for diminution in the value of any asset, so as to be covered by Explanation 1(i) to section 115JB of the Act. In these circumstances, the Court is satisfied that no substantial question of law arises for consideration. Similar view was also taken by the co-ordinate bench decision of Mumbai Tribunal in the case of Anchor Electricals (P.) Ltd. v. Dy. CIT [2017] 81 taxmann.com 250/164 ITD 570 (Mum. - Trib.) in the context of allowability of provision for warranty vis a vis computation of book profits u/s. 115JB of the Act. It was held that :- 23. With regard to the adjustment in book profit u/s. 115JB is concerned, it is noted that this issue is squarely covered in favour of the assessee by the judgment of Hon'ble Delhi High Court in the case of Becton Dickinson India (P.) Ltd. (supra), wherein it has been held that the provision for warranty cannot be treated as provision for diminution in value of any assets so as to be covered by Explanation 1(i) to section 115JB (2) and thus no additions to book profit can be made. Further, Hon'ble Supreme Court in the case of Rotork Controls India (P.) Ltd. (supra) held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability under normal provisions of the Act as well as while computing the book profits u/s. 115JB of the Act. This action of the ld AO was upheld by the ld DRP by holding as under in page 21 of his order :- The details of the date of manufacture of meters, etc with batch numbers and quality control number which had become obsolete were not available on record. Similar other details establishing the rational nexus between the obsolete inventories of ₹ 10,00,472/- and the specific manufactured items becoming obsolescent were not maintained by the A' also. The related details which were required to be maintained by the A' to establish its connection with the obsolete inventories were as under:- (1) Date of manufacture of such electricity meters, etc with batch and quality control inspection numbers. (2) The reasons why such inventories were treated as obsolete. (3) The authorities certifying that such inventories had become obsolete. (4) The technical qualifications and the competency of such authorities to declare the inventories as obsolete. (5) The stock register containing the details and descriptions of the stocks becoming obsolete. (6) The proo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 25% provision - ₹ 2,83,815.18 361-540 days - 50% provision - ₹ 7,970.69 541-720 days - 75% provision - ₹ 1,75,572.98 720 days - 100% provision - ₹ 5,33,113.50 Total Provision ₹ 10,00,472.35 We find from the said workings, the assessee had clearly mentioned the item code, description of item available in the inventories, date of last transaction, quantity, rate per unit and the value together with the time periods from the date of sale to decide the relevant provision percentage. Hence it could be safely concluded that the assessee had made a scientific calculation for making provisions based on commercially acceptable method. We find that the valuation of the stocks in accordance with AS-2 issued by the ICAI is one of the standards recognized u/s. 145(2) of the Act, wherein the closing stock is to be valued at lower of cost or net realizable value. 33.3.1 We find that this issue is direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances, we are of the view that no substantial question of law arises for our consideration. 7. Accordingly, the appeal is dismissed. 33.3.2 In view of our aforesaid findings and respectfully following the judicial precedent relied upon hereinabove, we hold that the provision made for obsolete stocks in the sum of ₹ 10,00,472/- is squarely allowable as deduction as a business loss under normal provisions of the Act. Accordingly, the Ground No. 10 raised by the assessee for the Asst Year 2011-12 is allowed. 33.3.3 With regard to the allowability of the provision for obsolete stock while computing the book profits u/s. 115JB of the Act, the ld AO had disallowed the same on the ground that it is an unascertained liability and accordingly to be added back while computing book profits u/s. 115JB of the Act. The ld DR argued that pursuant to the amendment brought in by the Finance (No. 2) Act, 2009 with retrospective effect from 1.4.2001, the said provision for obsolete stock represents provision made for diminution in value of asset and hence the same requires to be added back while computing the book profits u/s. 115JB of the Act. When this was put to the ld AR, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the MSMED Act, 2006, there cannot be an iota of doubt that the interest calculated and due towards the suppliers is an ascertained liability. It is calculated as per a set formula and based on the number of days of payment overdue and hence it has to be construed as a certain liability and not as a contingent one and accordingly he prayed for allowance of the same as deduction while computing the book profits u/s. 115JB of the Act. 34.2.1 As per Section 23 of the said Act, the said provision for interest is not allowable as a deduction under the provisions of the Income Tax Act and accordingly, the assessee had rightly disallowed the same in the return of income under normal provisions of the Act. Now the short point of dispute in this regard is whether the said provision for interest would have to be disallowed even in the computation of book profits u/s. 115JB of the Act. The ld DR stated that the provisions of section 115JB of the Act are also part of the Income Tax Act, 1961 only and once section 23 of the MSMED Act, 2006 specifically states that the said interest shall not be allowed as deduction under Income Tax Act, it should not be allowed as deduction even in the comput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 115JB(2) of the Act. For the sake of convenience, the said clause (c) is reproduced below:- Explanation 1 - For the purposes of this section, book profit' means the net profit as shown in the profit and loss account for the relevant previous year prepared under sub-section (2), as increased by - (a) to (b) . . . . . . . . . . . . . . . . . . . . . (c) the amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities 34.2.4 Now the pertinent question would be whether the provision for interest of ₹ 29,21,911/- would be ascertained or unascertained liability. We find that the said provision had been determined with reasonable certainty pursuant to the method of calculation provided under the MSMED Act, 2006 (which is an independent statute). Moreover, the payment of this interest to the suppliers registered under MSMED Act, 2006 is mandatory in nature and no option is given to the assessee in this regard. Hence it could be safely concluded that the said provision of interest would be clearly an ascertained liability. Moreover, we find that out of total provision of ₹ 29,21,911/-, the assessee has paid a sum o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reover, we find that the provisions of section 23 of MSMED Act, 2006 specifies that interest payable to buyer shall not for the purposes of computation of income under the Income Tax Act, 1961, be allowed as deduction. In this regard, the expression ' computation of income' used therein, in our considered opinion, refers to the expression 'income' referred to in section 29 or in section 57 of the Income Tax Act. We find that Section 29 and Section 57 of the IT Act, 1961 talks about the manner in which the income referred to in section 28 (i.e business or professional income) and section 56 (i.e income from other sources) subject to grant of certain deductions under the respective heads. For the sake of convenience, the provisions of section 29 and section 57 are reproduced hereunder:- Section 29 - Income from profits and gains of business or profession, how computed The income referred to in section 28 shall be computed in accordance with the provisions contained in sections 30 to 43D. Section 57- The income chargeable under the head 'income from other sources' shall be computed after making the following deductions, namely - . . . . . . . . . . ..... X X X X Extracts X X X X X X X X Extracts X X X X
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