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2019 (8) TMI 722

..... [2016 (1) TMI 853 - ITAT MUMBAI] wherein it has followed the decision of the Hon’ble Bombay High Court in the case of CIT v. Everest Kanto Cylinder Ltd. [2015 (5) TMI 395 - BOMBAY HIGH COURT] as direct the AO to restrict the adjustments to 0.5% - Facts being identical, we follow the above order of the Co-ordinate Bench in assessee’s own case and direct the AO to restrict the adjustment at 0.5% of the loan amount advanced by the bank to its AEs. Disallowance in respect of Annual Information Report (AIR) reconciliation - HELD THAT:- We admit the supporting evidence filed by the Ld. counsel in the instant case for the reason that these are merely in connection with reconciliation of tour sales as reflected in the AIR statement vis-a-vis the books of accounts. We are of the considered view that the reconciliation in respect of AIR is a purely factual issue which needs verification at the level of the AO. Therefore, we set aside the order of the Ld. CIT(A) on the above matter and restore the matter to the file of the AO to make an order afresh following the above Instruction of CBDT, after giving reasonable opportunity of being heard to the assessee. We direct the assessee t .....

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..... 144C of the Income Tax Act 1961, (the Act ) in pursuance to the directions of the Dispute Resolution Panel, Mumbai [in short DRP ]. 2. The 1st ground of appeal is general in nature. The ground of appeal No. 2 to 10 refer to adjustment made with respect to the international transaction of provision of corporate guarantee for loans taken by AEs. 2.1 The assessee (Cox & Kings Ltd.) is engaged in travel and tour business and also deals in foreign exchange. The assessee is a part of Cox & Kings Group, which has its offices in UK, USA, Japan etc. The main services offered by the company are destination management or inbound tourism, outbound tourism and business travel. During the impugned assessment year, the assessee had provided corporate guarantee to third party banks for loans obtained by its subsidiaries (AEs). During the course of assessment proceedings, the assessee submitted before the Assessing Officer (AO) that no commission is chargeable on such guarantee provided by it on behalf of its AEs. However, it further submitted that it has charged guarantee commission @ 0.5% on account of loan advanced by the bank to certain AEs and in cases where no commission has been char .....

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..... loan amount advanced by the bank to its AEs. Thus this issue of the assessee s appeal is allowed for statistical purposes. 3. The ground of appeal No. 11 to 17 relate to disallowance in respect of Annual Information Report (AIR) reconciliation. 3.1 During the course of assessment proceedings, the AO asked the assessee to reconcile the total sales (including tour sales) recorded in the books of account with the sales as per the AIR statement. The assessee submitted party-wise comparison of total sales (including tour sales) during the year as reported in AIR statement vis-à-vis books of accounts. The assessee also requested the AO to call for information from the said parties so that it can reconcile the mismatch between the AIR statement and its books of accounts. For this purpose, the assessee submitted the address of the said parties (out of 18, the details of 6 parties was available with the assessee, for the rest of the parties, the assessee had not made any transaction during the year). Further, the assessee had also written letters to the said parties asking details of the transaction entered by them with the assessee, so that the un-reconciled AIR entries can be recon .....

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..... deductor has made payment of the TDS in the Government Account and if the payment has been made, credit of the same should be given to the assessee. However, the Assessing Officer is at liberty to ascertain and verify the true and correct position about the TDS certificate. Such verification may be made with the relevant AO(TDS). The AO(TDS) may also, if deemed necessary, issue a notice to the deductor to compel him to file correction statement as per the procedure laid down. In this regard, the AO(TDS) may invoke all the powers and authority as available to him/her as per the Income tax Act. If required and necessary, he/she can obtain prior approval of the Director or Commissioner of Income tax. The authorities can also examine whether general approval can be given. 4. Thus, the manner laid down by the Hon'ble HC in the above mandamus is a method of due verification. This may be brought to notice of all Officers working under your jurisdiction for compliance. We admit the supporting evidence filed by the Ld. counsel in the instant case for the reason that these are merely in connection with reconciliation of tour sales as reflected in the AIR statement vis-a-vis the books of .....

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..... extract of the said order is reproduced below: "The expenses incurred by Appellant on account of salary on development of travel booking engine and SAP software cannot be considered as adding a new line of business for its customers, infact, upon successfully development of the same, the existing business of the Appellant for providing tours and travel services can be carried out more effectively and efficiently. Thus, incurring of these expenses for travel booking engine, the Appellant is expanding its existing line of business. Further, it is also a fact that the expenses incurred for travel booking engine and SAP software was only for the purpose of technology upgradation to the existing business of the Appellant and by incurring the same the Appellant has not created any new line of business or asset which can be given enduring benefit to the Appellant. Thus, according to us, in view of the above factual and legal submission, the salary and profession expenses incurred and disallowed by AO amounting to ₹ 1,20,24,914 over the development of travelling booking engine and SAP software is to be allowed as revenue expenses under section 37(1) of the Act. 4.3 Facts being .....

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..... e ground of appeal No. 21 to 23 are allowed for statistical purposes. 6. The ground of appeal No. 24 relates to non-grant of TDS. It is stated by the Ld. counsel that in the return of income filed for the impugned assessment year, the assessee had claimed TDS credit of ₹ 13,35,60,477/-, whereas as per the updated Form No. 26AS issued by the Income Tax Department, the total TDS credit eligible to the assessee is ₹ 13,79,24,037/-. It is stated that in the final assessment order, the AO has given TDS credit to the extent of ₹ 13,23,15,727/- only, resulting into short TDS credit to the extent of ₹ 56,08,310/-. It is further stated that the assessee has filed a rectification application dated 30.11.2017 before the AO. As evident from the record, the assessee has filed a rectification application dated 30.11.2017 before the AO. We direct the AO to pass an order after verifying the facts and dispose off the said rectification application. 7. The ground of appeal No. 25 relates to non-grant of dividend distribution tax ( DDT ). It is submitted by the Ld. counsel that during the impugned assessment year, CKL had declared and paid dividend of ₹ 13,65,27,890/- to .....

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