TMI Blog2021 (2) TMI 1318X X X X Extracts X X X X X X X X Extracts X X X X ..... ies Ltd. Therefore, in our considered view, such price adopted for applying CUP is invalid. That being the case, when no comparable price for sale of the product in the domestic market is available in terms of the directions of the Tribuanl in assessee s own case for Assessment Years 2009-10 and 2010-11 [ 2016 (3) TMI 1105 - ITAT MUMBAI ], there is no other course left open, but to accept the benchmarking of the assessee under TNMM. In view of the above, we delete the addition of Rs.95,48,976/-. This ground is allowed. Disallowance of 70% out of the expenditure incurred towards distribution of samples - HELD THAT:- While deciding identical issue in assessee s own case for Assessment Year 2003-04 [ 2013 (9) TMI 306 - ITAT MUMBAI ] the Tribunal has restored the issue to the Assessing Officer for fresh examination after verifying the details of names and addresses of doctors. Keeping in view the aforesaid directions of the Tribunal in assessee s own case, we restore the issue to the Assessing Officer for fresh examination after due opportunity of being heard to the assessee. While doing so, the Assessing Officer may also examine the decision of the co-ordinate bench in case of Jo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xamination keeping in view the directions of the Tribunal in Assessment Year 2003-04 that adjustment, if any, must be made to opening stock, purchases, sales and closing stock. This ground is allowed for statistical purpose. Disallowance of club expenditure holding it to be of capital nature - HELD THAT:- We have noticed that while deciding identical issue in assessee s own case for Assessment Year 2007-08 [ 2013 (9) TMI 163 - ITAT MUMBAI ] the Tribunal has allowed the claim of the assessee. Facts being identical, respectfully following the aforesaid decision of the Tribunal, we delete the disallowance made by the Assessing Officer. This ground is allowed. Disallowance u/s 43B(f) - HELD THAT:- We find that in case of UOI Vs. Excide Industries Ltd. [ 2020 (4) TMI 792 - SUPREME COURT ] while reversing the judgment of the Hon ble Calcutta High Court, has held hat this type of expenditure has to be disallowed under section 43B(f) of the Act if they were not actually paid during the year. Following the decision of the Hon ble Supreme Court noted above, we dismiss the ground of the assessee. - I.T.A. No.2916/Mum/2015 - - - Dated:- 4-2-2021 - SHRI PRAMOD KUMAR (VICE PRESIDEN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied by the TPO is invalid as M/s Unichem Laboratories Ltd has exported the product outside India and to European markets. She submitted, while deciding identical issue involving purchase of very same API, the Tribunal in assessee s own case for assessment year 2009-10 an 2010-11, though, has accepted applicability of CUP as most appropriate method, however, the Tribunal has observed that while applying CUP, the price at which the product is available in the domestic market should be applied for determining the arm s length price. Though, of course, the Tribunal also observed that only those domestic transactions which are more than 20 kgs should be considered. The learned Counsel submitted, in view of the aforesaid observation of the Tribunal, the export sale price of Unichem Laboratories Ltd cannot be applied as CUP. However, she submitted, one more reason for inapplicability of the export sale price of Unichem Laboratories Ltd is because, out of the four parties to whom exports were made, three are related parties. In this context, she drew our attention to the information received from Unichem Laboratories Ltd as reproduced in the show cause notice. The learned Counsel submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31-03-2016, there is no other course left open, but to accept the benchmarking of the assessee under TNMM. In view of the above, we delete the addition of Rs.95,48,976/-. This ground is allowed. 7. Ground No.2.1 being general, we dismiss the same. 8. In ground 2.2., the assessee has challenged the disallowance of 70% out of the expenditure incurred towards distribution of samples. 9. Briefly the facts are, in course of assessment proceedings, the Assessing Officer noticed that the assessee has debited an amount of Rs.4,84,43,325 towards distribution of free samples and stock. Noticing this, he called upon the assessee to furnish various details including confirmations of the persons to whom such free samples were distributed. As alleged by the Assessing Officer, the assessee was unable to provide the requisite details. Alleging that the assessee failed to substantiate the expenses and taking note of the fact that in the previous year similar expenditure claimed by the assessee was disallowed to the extent of 70%, the Assessing Officer followed the same and allowed 30% of the expenditure claimed. Though, the assessee contested the aforesaid disallowance before the first ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, we direct the Assessing Officer to verify the claim of the assessee and exclude the investments capable of yielding taxable income from the average value of investment for computing the disallowance under rule 8D(iii). Needless to mention, the Assessing Officer must afford reasonable opportunity of being heard to the assessee before deciding the issue. 14. In ground no. 2.4, the assessee has challenged disallowance of Rs.1,36,67,817 by invoking section 145A of the Act. 15. In course of assessment proceedings, the Assessing Officer, while examining the details of loans and advances furnished by the assessee, noticed that the assessee had receivables on account of CENVAT credit and other taxes. Taking note of the fact that in preceding assessment year similar disallowance was made under section 145A of the Act, followed the same and added back an amount of Rs.1,36,67,817/- to the income of the assessee. 16. The learned Counsel for the assessee submitted, while deciding identical issue in assessee s own case for Assessment Year 2003-04, the Tribunal has directed the Assessing Officer to examine the issue keeping in mind that adjustment must be made to opening sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leave salary payable to employees on retirement. Since the aforesaid expenditure was claimed on accrual basis and was not actually paid during the year, the Assessing Officer disallowed the same under section 43B(f) of the Act. Learned Commissioner (Appeals) also upheld the disallowance. 22. At the time of hearing before us, the learned Counsel for the assessee fairly accepted that the issue has to be decided against the assessee in view of the recent judgment of the Hon ble Supreme Court. 23. Having considered rival submissions, we find that in case of UOI Vs. Excide Industries Ltd, the Hon ble Supreme Court in judgment dated 24-04-2020 delivered in Civil Appeal No.3545 of 2009, while reversing the judgment of the Hon ble Calcutta High Court, has held hat this type of expenditure has to be disallowed under section 43B(f) of the Act if they were not actually paid during the year. Following the decision of the Hon ble Supreme Court noted above, we dismiss the ground of the assessee. 24. Grounds 2.7 to 2.9 are consequential in nature, hence, dismissed. 25. Grounds 3 4 are general in nature; hence dismissed. 26. In the result, appeal is partly allowed. Order pronou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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