TMI Blog2020 (7) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal following the order of Tribunal in assessee s own case in preceding assessment years deleted the disallowance [ 2019 (6) TMI 542 - ITAT MUMBAI] - Decided in favour of assessee. Addition of unutilized CENVAT u/s 145A - exclusive method followed by the assessee was not in accordance with provisions of section 145A - HELD THAT:- We find that the addition on account of unutilized CENVAT credit was made in assessee s case in assessment year 2012-13 for similar reasons. The Tribunal restored the issue back to the Assessing Officer. TP Adjustment - corporate guarantee commission and interest on loan extended to subsidiary Piramal Glass UK ltd. - HELD THAT:- As in assessee's own case [ 2019 (6) TMI 542 - ITAT MUMBAI] DRP has directed the Assessing Officer to compute interest at LIBOR plus 3%.Tribunal has directed to compute interest on interest free loan advanced to the AE at LIBOR plus 200 basis points. Insofar as adjustment on account of corporate guarantee commission is concerned, the Tribunal has directed the Assessing Officer to compute the corporate guarantee fee @ 0.5% - We respectfully following the decision of the Co-ordinate Bench partly allow ground. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, majority of the grounds raised in appeal are covered issues. The ld.Authorized Representative of the assessee filed a chart giving details of the issues raised and the orders of the Tribunal /judgments of the Hon ble Courts, vide which they are covered. 3. Shri A. Mohan, representing the Department vehemently defended the impugned assessment order. However, the ld. DR fairly admitted that majority of the issues raised in the appeal were considered by the Tribunal in the past in assessee s own case. 4. Both sides heard and orders of authorities below perused. The assessee is engaged in the business of manufacturing of glass bottles. The assessee has entered into various international transactions with its Associated Enterprises (AE s) during the financial year 2012-13. The Transfer Pricing Officer (TPO) made adjustment of ₹ 5,01,86,604/- in respect of international transactions entered into by assesse in the impugned assessment year. Apart from the adjustment made on account of Transfer Pricing (TP) issues, there were certain additions/disallowances made by the Assessing Officer in the draft assessment order dated 30-12-2016. The assesse filed objections against the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 4.1.2 In so far as ground No.II is concerned, we find that the Tribunal in assessee s own case in IT(TP)A No.3046/Mum/2017 (supra) has allowed depreciation on Non-compete Fee @25% by considering it as intangible asset. For the sake of completeness, the relevant extract of the findings of Tribunal dealing with assessee s claim of depreciation on Non-compete Fee is reproduced herein below:- 6. We have considered rival submissions and perused the material on record. As could be seen, the dispute relating to assessee s claim of depreciation on non compete fee is a recurring issue between the parties from the assessment year 1999 2000 onwards. While deciding the issue in Assessment Year 1999 2000 the Tribunal altogether disallowed assessee s claim of depreciation on both the count i.e., depreciation on allocation of non compete fee to various fixed assets as well as claim of depreciation by treating non compete fee as an intangible asset. However, while deciding assessee s appeal in subsequent years, the Tribunal allowed assessee s claim of depreciation @ 25% by treating non compete fee as an intangible asset. In the latest order passed by the Tribunal in assessee s own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudice to ground No.I and II. Since we have accepted assessee s plea in ground No.II, this ground of appeal has become infructuous and the same is dismissed as such. GROUND IV: DISALLOWANCE OF DEPRECIATION ON ADOPTION OF WRONG ACTUAL COST OF VARIOUS FIXED ASSETS: 4.3 The ld. Authorized Representative of the assessee pointed that the assessee had allocated lumpsum consideration paid for acquisition of depreciable assets transferred from M/s. Nicholas Piramal India Ltd. at the time of acquisition. The assets were transferred at fair market value and the depreciation was claimed on the same. The Assessing Officer disallowed assessee s claim and treated the transaction as one of amalgamation and took written down value of the transferred assets in the books of transferor company i.e. M/s. Nicholas Piramal as actual cost to the assessee and allowed depreciation accordingly. The ld.Authorized Representative of the assessee pointed that similar disallowance of depreciation was made by the Assessing Officer in assessment year 2012-13. The Tribunal after examining the facts restored this issue to the file of Assessing Officer for de-novo adjudication. 4.3.1 The ld.Departmental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative of the assessee contended that since subsidiaries are in same line of business the expenditure is allowable on the basis of commercial expediency. The ld.Authorized Representative of the assessee pointed that similar disallowance of interest under section 36(1)(iii) of the Act was made by Assessing Officer in assessment year 2012-13. The Tribunal deleted the disallowance by holding that the investment in sister concerns is for the purpose of business. The ld.Authorized Representative of the assessee further pointed that the issue of disallowance of interest travelled to the Hon'ble Bombay High Court in assessee s own case in Income Tax Appeal No. 556 of 2017 filed by the Department. The Hon'ble Bombay High Court confirmed the findings of Tribunal and dismissed the appeal filed by the Revenue vide order dated 11-06-2019. 4.4.1 The ld. Departmental Representative fairly admitted that the issue of disallowance under section 36(1)(iii) of the Act was considered by the Tribunal in assessee s appeal for assessment year 2012-13(surpa). 4.4.2 Both sides heard, orders of the Authorities below examined. We find that in assessment year 2012-13 disallowance under section 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed. The Assessing Officer is directed to delete the disallowance made under section 36(1)(iii) of the Act . WITHOUT PREJUDICE TO GROUND V: GROUND - VI DISALLOWANCE OF INTEREST OF ₹ 4,52,59,607 U/S.57(iii) OF THE ACT: 4.5. the ld.Authorized Representative of the assessee stated at the Bar that in case ground No.V of the appeal is allowed then ground No.VI would become infructuous. 4.5.1 Since we have granted relief to the assessee on ground No.V of the appeal, the ground No.VI of the appeal has become infructuous and the same is dismissed as such. GROUND- VII: ADDITION ON ACCOUNT OF UNUTILIZED CREDIT FOR CENTRAL VALUE ADDED TAX ( CENVAT ) U/S 145A OF THE ACT AMOUNT TO ₹ 1,48,16,181: 4.6 The ld.Authorized Representative of the assessee submitted that the Assessing Officer had made addition of unutilized CENVAT of ₹ 1,48,16,181/- under section 145A of the Act on the ground that the exclusive method followed by the assessee was not in accordance with provisions of section 145A of the Act. The assessee values the opening and closing stock of raw material, stores, spares and packaging material at cost less excise duty and other taxes. The ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osing stock by including tax, cess, or fee cannot be made without making corresponding adjustment to the opening stock. This view has been reiterated in a number of decisions of the Tribunal which the learned Authorised Representative relied upon. We, therefore, direct the Assessing Officer to value the closing stock strictly in terms of section 145A, keeping in view the principle laid down in judicial precedents referred to above and only after providing due opportunity of being heard to the assessee. Ground no.8 is allowed for statistical purposes. 33. Facts being identical, respectfully following the aforesaid decision of the Tribunal, we restore the issue to the Assessing Officer for deciding afresh in terms with the directions of the Tribunal in assessment year 2006 07. Since the fact in the assessment year under appeal are identical, we deem it appropriate to restore this issue back to the file of Assessing Officer for denovo adjudication, in line with the order of the Tribunal for assessment year 2012-13. The ground No.VII of the appeal is accordingly allowed for statistical purpose. GROUND NO.VIII: ADDITION TO ARM S LENGTH PRICE OF INTERNATIONAL TRANSACTIONS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the Co ordinate Bench, we direct the Assessing Officer to compute interest on interest free loan to AE at LIBOR plus 200 basis points and corporate guarantee commission @ 0.5%. [Emphasised by us] Since there is no change in the facts in the assessment year under appeal, we respectfully following the decision of the Co-ordinate Bench partly allow ground No.VIII of the appeal in same terms. Therefore, ground No.VIII of the appeal is partly allowed. GROUND IX: ASSESSING OFFER ERRED IN NOT FOLLOWING THE DIRECTIONS OF HON BLE DRP: WITHOUT PREJUDICE TO GROUND IX: GROUND X: DISALLOWANCE U/S 14A OF THE ACT AMOUNTING TO ₹ 53,680/- 4.8 The ld. Authorized Representative of the assessee submitted that ground No.IX X of the appeal are in respect of disallowance made under section 14A r.w.r 8D. Both the grounds are without prejudice to each other. The ld.Authorized Representative of the assessee pointed that the DRP had directed the Assessing Officer to delete the disallowance of ₹ 48,680/-. The ld.Authorized Representative of the assessee referred to Para 46.1 of the DRP directions. The ld.Authorized Representative of the assessee pointed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NTING TO ₹ 53,942/- 4.10 In ground No.XII, the assessee has assailed the action of Assessing Officer in allowing short credit of TDS by ₹ 53,942/-. The ld. Authorized Representative of the assessee submitted that the issue can be restored back to the Assessing Officer for verification and grant of TDS credit accordingly. 4.10.1 The ld. Departmental Representative submitted that he has no objection if the issue is restored to Assessing Officer for verification. 4.10.2 The limited issue in groundNo.XII of the appeal is with respect to short grant of TDS. This issue is restored back to Assessing Officer for reverification. The Assessing Officer is directed to allow TDS credit as per actual records. The ground of appeal No.XII is allowed for statistical purpose. GROUND XIII: SHORT GRANT OF INTEREST U/S 244A OF THE ACT: 4.11 In ground No.XIII of the appeal, the assessee has assailed the finding of Assessing Officer in granting short interest under section 244A of the Act. This ground is consequential. Therefore, the same is dismissed. 5. In the result, appeal of the assessee is partly allowed in the terms aforesaid. 6. This appeal was heard on 22/01/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sposal of matters made timebound by this Court, the period for which the order dated 26th March 2020 continues to operate shall be added and time shall stand extended accordingly . The extraordinary steps taken suo motu by Hon ble jurisdictional High Court and Hon ble Supreme Court also indicate that this period of lockdown cannot be treated as an ordinary period during which the normal time limits are to remain in force. In our considered view, even without the words ordinarily , in the light of the above analysis of the legal position, the period during which ITA No. 6103 and lockout was in force is to excluded for the purpose of time limits set out in rule 34(5) of the Appellate Tribunal Rules, 1963. Viewed thus, the exception, to 90-day time-limit for pronouncement of orders, inherent in rule 34(5)(c), with respect to the pronouncement of orders within ninety days, clearly comes into play in the present case. Of course, there is no, and there cannot be any, bar on the discretion of the benches to refix the matters for clarifications because of considerable time lag between the point of time when the hearing is concluded and the point of time when the order thereon is bein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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