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TMI Blog2021 (9) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirming additions of Rs. 2,75,41,987/- on basis of the order passed for AY 2013-14 without appreciating the facts of the case. 3. The assessee submits that 'Education Cess' and 'Secondary and Higher Education cess' amounting to Rs. 42,46,460/- may kindly be allowed as a deduction while computing the total income of the assessee company. 4. The appellant prays for admission of Additional grounds/Additional evidence, if any required to support its case. 5. The appellant craves to leave or add, amend or alter any of the grounds for appeal. In view of all these and others grounds which may be produced during the hearing of appeal the appeal may be allowed and justice rendered." 2. The brief facts in this case are that the assessee is a private limited company and engaged in the business activity of real estate projects. The assessee company is developing a township projects named as Future tower at Amanora, Pune. The assessee has filed its return of income for the year under consideration on 28.11.2016 declaring total income of Rs. 42,12,75,820/-. The case was selected for scrutiny and accordingly, notices were issued to the assessee. The Assessing Officer concl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents were made to the shareholder/ultimate shareholder only. 4. The TPO went on to refer to the OECD report of 1979, OECD Guidelines, 2010, provisions of section 2(22)(e) of the Act and various other case laws. In view of the above, the TPO took the Arm's Length Price of the payment of interest to AE at Rs. Nil and thus, made an unward adjustment of Rs. 3,92,81,275/- and the same was confirmed by the Assessing Officer in his order. 5. Thereafter, the assessee filed detailed written submissions before the Ld. CIT(Appeal) which is on record. The Ld. CIT(Appeal) after considering the assessee's submission has given his findings at Para 2.3 of this order which reads as follows: "2.3 I have carefully considered the facts of the case and submission filed by the appellant. As rightly mentioned by the appellant, the transfer pricing adjustment towards interest on compulsory convertible debenture (CCDs) is squarely covered by my decisions in the appellant's own case for AY 2014-15 & AY 2015-16. Further, the appellant has also brought to my attention Honourable ITAT, Pune's decision dtd. 18.12.2020 in ITA No. 772/PUN/2018 for AY 2013-14 in its own case. Accordingly, appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . As regards the ALP determination, we again follow the view taken by the Tribunal for the immediately preceding year and direct the AO/TPO to recompute the ALP of the transactions of payment of interest on debentures/CCDs........................... 7.1. We find that the Ld. CIT(Appeal) has passed his order based on the decision of the Pune Bench of the Tribunal for the assessment year 2013-14 in assessee's own case (supra.). Therefore, we do not find any reason to interfere with the findings of the Ld. CIT(Appeal) and accordingly, the same is upheld. Thus, Ground No. 1 raised in appeal by the assessee is dismissed. 8. Ground No. 2 pertains to the issue of addition on reworking of WIP. During the assessment proceeding, the Assessing Officer observed that the Ld. CIT(Appeal), Pune had passed an order for the assessment year 2013-14 dated 21.03.2018 wherein the Ld. CIT(Appeal) had upheld the action of the Assessing Officer for upward international transaction adjustment of Rs. 16,88,23,507/-. However, the assessee made an alternate, without prejudice argument before the Ld. CIT(Appeal) wherein it was stated that the interest accrued and paid on the CCDs had been capitalized to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to work-in-progress and not claimed as deduction. Albeit the ld. CIT(A) approved the ALP determination, but also accepted the assessee's alternative argument. He directed the AO that whenever the assessee claims deduction against this work-in-progress, the interest component for the assessment year 2013-14, whose ALP was determined at NIL, should be added back to the total income. Following the same, the AO added Rs. 3.03 crore to the total income of the assessee for the year under consideration representing interest expenditure on debenture/CCDs booked for the assessment year 2013-14. The ld. CIT(A) approved the AO's action. 21. We have heard the rival contentions and perused the relevant material on record. It is seen that for the assessment year 2013-14 the Tribunal vide its order dated 18-12-2020 (ITA No. 772/PUN/2018) has overturned the view of the ld. CIT(A) and held that the re-characterization of transaction of issue of debentures/CCDs to issue of equity capital was not correct and accordingly directed the AO/TPO to re-work out the ALP of the transaction of interest payment. In that view of the matter, the direction given by the ld. CIT(A) for the A.Y. 2013-14 sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 44/PUN/2021 for the assessment year 2014-15 dated 17.08.2021. The Tribunal on this issue of 'Education cess' and 'Secondary and Higher Education Cess' held as follows: "6. The assessee has also raised an additional ground stating that Education Cess and Secondary and Higher Secondary Cess amounting to Rs. 26,66,359/- may be allowed as a deduction while computing the total income of the assessee company. 7. The Hon'ble Supreme Court in National Thermal Power Company Ltd. Vs. CIT (1998) 229 ITR 383 (SC) has observed that "the purpose of the assessment proceedings before the taxing authorities is to assess correctly the tax liability of an assessee in accordance with law. If for example, as a result of a judicial decision given while the appeal is pending before the Tribunal, it is found that a non-taxable item is taxed or a permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the tribunal for the first time, so long as the relevant facts are on record in respect of that item". Answering the question posed before it in affirmative, their Lordships held that on the facts found by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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