TMI Blog2021 (4) TMI 1361X X X X Extracts X X X X X X X X Extracts X X X X ..... ent years, we also remand this issue back to the Ld.AO with similar direction. Not allowing set off of brought forward depreciation loss - HELD THAT:- We note that, as the OGE to the orders passed by this Tribunal in the preceding assessment years are pending with Ld.AO, the relief granted by this Tribunal was not available with the Ld.AO while passing the impugned order for year under consideration. It is noted that the ld. AO does not dispute regarding availability of set off of brought forward loss to assessee if any in the preceding year while computing income for the year under consideration. Therefore, set off of brought forward losses is to be granted, if there is loss for assessment years 2008-09, 2009-10 and 2013-14, after passing the OGE to the orders of this Tribunal for assessment years 2008-09, 2009-10 and 2013-14. Direct the Ld.AO to pass the order giving effect to all the previous years from assessment year 2008-09 to assessment year 2014-15 and thereafter to provide the set off of brought forward losses. TP addition - specified domestic transaction within the ambit of section 92B - re-characterisation of payment made towards administration and suppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions as indicated hereinabove. In the event the expenses are subsumed under TNMM we do not find any necessity for a separate benchmarking. - IT(TP)A No. 2614/Bang/2019 - - - Dated:- 8-4-2021 - Shri Chandra Poojari, Accountant Member And Smt. Beena Pillai, Judicial Member For the Appellant : Shri Rajan Vora, CA. For the Respondent : Shri Pradeep Kumar, CIT(DR)(ITAT), Bengaluru. ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal has been filed by assessee against order dated 28/10/2019 passed by Ld.AO under section 143 (3) for assessment year 2015-16 on following grounds of appeal:- Brief facts of the case are as under: 2. The assessee is a private limited company incorporated under the provisions of Companies Act 1956, and registered as a non-banking financial company with the RBI of India. Assessee is responsible for providing end to end financial solutions to the customers of Cisco in India by variety of financing options. Primarily, operations of assessee comprises of providing finance to third-party customers by way of operating lease agreements, finance lease agreements and loans to purchase networking equipment from Cisco S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the Ld. TPO are as under:- Sl. No. Name of the comparable exhibitions Average % 1 Asian Business Conferences Ltd. - 48.11 2 Goldmine Advertising Ltd. 4.89 3 Concept Public Relations India Ltd. 7 4 Pressman Advertising Ltd. 13.42 5 Scarecrow Communications Ltd. 23.53 6 Killick Agencies and Marketing Ltd. 24.17 35th Percentile 7% 50th Percentile 10.21% 65th Percentile 13.42% 2.4. The Ld. TPO thus proposed an adjustment of Rs.13,88,20,763/- by considering the ALP of assessee at 10.21% in relation to the Administrative Support Service. 2.5. Upon receipt of the Transfer Pricing order passed by the Ld.TPO, the Ld.AO passed the draft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n considered as operating in nature while analyzing the leasing activity transaction and accordingly the same is to be considered to be at arm's length, the DRP held that the Appellant is not prejudiced by the same as the leasing transaction has already been found to be at Arm's Length. 2.9. On receipt of the DRP directions, the Ld.AO passed final assessment order by making addition of Rs.1,85,02,38,966/-. Aggrieved by the order passed by the Ld.AO, assessee preferred appeal before this Tribunal. 3 . Ground No.1- 2 is raised challenging disallowance of depreciation on assets given under finance lease. 3.1. The Ld.AR at the outset submitted that coordinate bench of this Tribunal in assessee s own case for assessment year 2011-12 and 2013-14 in IT(TP)A No.219/B/2018 and 688/B/2016 dated 07/06/2019 considered similar issue by following decision of Hon ble Supreme Court in case of ICDS vs CIT in Civil Appeal No.3282 of 2008. Subsequently, for assessment year 2014-15 in IT(TP)A No.149/Bang/2019 by order dated 29/05/2020 and for assessment year 2012-13 in ITA (TP) A No. 180/Bang/2017 by order dated 09/10/2020, this Tribunal had remanded the issue back to ld. AO fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -14, after passing the OGE to the orders of this Tribunal for assessment years 2008-09, 2009-10 and 2013-14. 4.5. We accordingly direct the Ld.AO to pass the order giving effect to all the previous years from assessment year 2008-09 to assessment year 2014-15 and thereafter to provide the set off of brought forward losses. Accordingly, this ground raised by assessee stands allowed for statistical purposes. 5. Ground No. 4 is against the transfer pricing addition made on account of re-characterisation of payment made towards administration and support services by assessee to Cisco India. 5.1. Primarily, the Ld.AR of assessee objected for considering the specified domestic transaction within the ambit of section 92B of the Act. It has been submitted that clause (i) of 92BA stands admitted by virtue of amendment in Finance Act, 2017, with effect from the 01/04/2017, and accordingly, the transaction under consideration would fall out of the ambit of applicability of transfer pricing provisions. 5.2. The Ld.AR gave brief background of the transaction as under: It has been submitted that, assessee is in the business of financing the purchase of networking equipm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the day-to-day affairs of business of assessee. And that the said services enable functioning of the business of assessee smoothly. It was submitted that, for such services rendered by Cisco India, assessee paid sum of Rs.12,59,60,224/- based on cost plus arrangement and the same was disclosed as a specified domestic transaction in Form 3CEB. 5.5. It has been submitted that, it is neither an international transaction, nor could be deemed to be an international transaction. He submitted that it is a transaction between two domestic entities. 5.6. It has been submitted by the Ld.AR that, section 92B of the Act covers the transaction which actually exists between two associated enterprises and that the provision that does not deal with an hypothetical transaction and therefore the authorities below cannot presuppose an international transaction between assessee and its associated enterprises. In support of, the Ld.AR placed reliance on decision of Hon ble Delhi High Court in case of Maruti Suzuki India Anr. vs CIT Anr. reported in (2015) 129 TTR 25. The ratio laid down in this decision has been followed in the decision of Hon ble Pune Tribunal in case of Dover India Pvt. Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DR relied on orders passed by authorities below. 5.12. We have perused submissions advanced by both sides in light of records placed before us. The Ld.AR had raised a preliminary issue regarding the concerned transaction not falling within the ambit of transfer pricing provisions. In this context, reference was made to coordinate bench of this Tribunal in case of M/s Texport Overseas Pvt. Ltd vs DCIT in IT(TP)A No. 2213/B/2018 by order dated 12/09/2018 wherein, this Tribunal only referred to the omission of clause (i) to section 92BA by virtue of Finance Act 2017. The said clause was omitted w.e.f. 01/04/2017. Coordinate bench of this Tribunal relied on the decision of Hon ble Supreme Court in case of Kolhapur Canesugar Works Ltd. and General Finance Co. vs ACIT. 5.13. Hon ble Supreme Court in these cases examined the status of pending proceedings, where, a provision in the rule has been omitted. Hon ble Supreme Court categorically laid down that, if there is a provision by way of a saving clause considering situation of pending proceedings, then, such pending proceedings shall continue and be disposed of under the old Rule, as if, such Rule has not been deleted or omitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing services on its own. The query being raised by the bench, the Ld.AR submitted that, assessee sought administrative assistance and marketing and sales support assistance from Cisco India for ease of business. As Cisco India already had its own manpower which could be utilised for carrying out day-to-day activities of assessee. 6.3. In our view, being a full-fledged entrepreneur, there was no need for assessee to seek assistance from Cisco India and could have employed its own employees to carry out all such administrative and marketing and sales support functions. In the Transfer Pricing documents, nothing is placed on record to establish the need of such assistance as assessee had its own infrastructure facilities. 6.4. The Ld.AR submitted that there are bundled transactions inextricably linked with leasing activities. The Ld.AR submitted that, the expenses incurred by assessee by way of payment made to Cisco India is subsumed in the operating expenses considered for computing arm s length price of international transaction between assessee and its associated enterprise, wherein Cisco equipments were purchased by assessee from AE for leasing. The Ld.AR submitted by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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