9911796707
TMI Blog2018 (6) TMI 1455X X X X Extracts X X X X X X X X Extracts X X X X ..... orld of Shock Absorbers. The joint venture were brought to India a world of expertise in design and manufacturing of shock absorbers for all leading two wheelers and four wheelers. Showa is one of the largest suppliers of shock absorbers to major Auto Giant in Japan, USA, Germany UK and other developed markets. Company's products conform to the highest standards of Quality, Safety, Comfort and Dependability. Company's product enjoy wide patronage while serving as original equipment to vehicles like Maruti 800cc, Omni Van, Alto, Esteem, Honda City Car, Complete range of Hero Honda Motor Cycles, Kinetic Honda Scooter, Hero Puch, Hero winner, Hero Majestic and Unicorn. 3. For the Assessment Year 2010-11, assessee filed their return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grounds. Ground Nos. 1 and 12 are general in nature, Ground Nos. 2 to 8 relate to the transfer pricing issue, ground No.9 relate to the treatment of expenditure on account of royalty and technical fee, Ground Nos. 10 to 10.2 relate to the disallowance of expenditure u/s 14A of the Act, Ground No.11 relate to the disallowance of set off of short term capital losses u/s 94(8) of the Act and Ground Nos.13 & 14 relate to interest and penalty which are consequential and premature in nature. 7. First, taking the transfer pricing issue, as has been stated above, it relates to the determination of arm's length price of international transactions of royalty, fee for technical services and fee paid for design and drawing fee to the tune of Rs. 31,33 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to any third party. There is no explicit or implicit authority to transfer or create ownership in the technology, know how/technical information in the appellant. The expenditure of royalty or technical fee did not result with capital asset or a benefit of enduring nature much less in the capital field. The Appellate Tribunal in the case of the assessee for the asstt. Year 1993-94 to 1995-96 and for Asstt. Year 2002-03 and 2004-05 have deleted the similar disallowance. Revenue appeal for asstt. Year 2002-03 and 2004-05 stands dismissed by the Delhi High Court vide its order dated 6.9.2010 in ITA No. 94, 95 & 96/Del/2014. 29. Heard parties. In the peculiar fact-situation and the judgment of the Hon'ble Delhi High Court in the earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no.9 is accordingly allowed deleting the addition made on this score. Consequently, depreciation @ 25% will have to be reversed. 12. Now, coming to Ground Nos. 10 to 10.2 relating to disallowance of expenditure u/s 14A. It is the argument of the learned AR that there is tripartite agreement between the assessee, Birla Mutual Fund and the Citi Bank in accordance with which any amount excess of Rs. 20 lacs were automatically invested and redeemed when the balance sink below Rs. 20 lacs. He submitted that as could be seen from the balance sheet of the company, to be found at page 363, the surplus and reserves of the company is about 172.54 crores whereas the investment is only about Rs. 50 crores. He further submitted that under similar circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be found in the balance in the account of the assessee in excess of Rs. 20 lacs and also automatic redemption of the same when the balance is below Rs. 20 lacs. 15. We have also gone through the reasoning of the coordinate bench of this Tribunal vide paras Nos. 29 to 38 in the order dated 22/11/17 in ITA No.1030/Del./14 wherein the Tribunal having found that the assessee is having the reserves and surplus more than the investment dealt with the question whether the surplus funds have been used to make the investment. While respectfully following the decision of the Hon'ble jurisdictional High Court in the case of HT Media vs Pr. CIT (2017) 85 Taxmann.com 113 (Del), CIT vs Reliance Utilities and Powers Ltd. (2009) 313 ITR 340 (Bom); CIT vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 124 of the paper book clearly establish that the investment was made when the balance in the bank account of the assessee was more than Rs. 20 lacs and the redemption was there when the balance is less than Rs. 20 lacs on any day. He submitted that in the matters of the daily dividend, Section 94(8) has no application because whenever there is redemption such an amount is used for further investment, as such, it cannot be said that there is any allotment of additional units without any payment on the basis of holding of such units on any particular date. 17. We have gone through the provisions of Section 94(8) of the Act and found that all the clauses under (a) to (c) have to be satisfied cumulatively for invoking the said provision. Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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