9911796707
TMI Blog2023 (11) TMI 751X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. As per the facts and circumstance of the case and as per the provisions of law, the Dispute Resolution Panel has erred in its directions, and the assessing officer/ transfer pricing officer has erred in making an adjustment of Rs. 5,63,07,963/- on account of excess profit claimed in unit V under section 80IC, the same being harsh, unjust and illogical be deleted. 3. As per facts and circumstances and as per provisions of law, the assessing officer has erred considering the addition as deemed income under Section 115BBE and calculating tax on the same amounting to Rs. 36,91,008. The provisions not being applicable the same be deleted. 4. The assessee craves permission to add or amend the above grounds at the time of hearing." 3. At the outset, it is noted that there is a delay of one day in filing the appeal as pointed out by the Registry. After taking into consideration the condonation application as well as affidavit of the Managing Director of the assessee company, the delay is hereby condoned and the appeal of the assessee is admitted for adjudication. Firstly, the Ground No. 3 was not pressed by the Ld AR on behalf of the assessee during the course of hearing, henc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether the assessee has claimed deduction u/s 80-IC for the present year or not. 16. Thus, an adjustment of Rs. 5,63,07,9438/- is hereby made u/s 92CA(3)/80IA(10)/80IC of the I.T. Act, 1961 in respect of profit of Unit V for the purpose of claim of deduction u/s 80-IC of the Act. i.e., the profit of the assessee for the purpose of deduction u/s 88-IC of the I.T. Act, 1961 shall be reduced by Rs. 5,63,07,943/- and deduction u/s 80-IC is to be allowed on the reduce amount subject to compliance of necessary conditions. Further, if the assessee is allowed carried forward of loss by Unit V by the assessing officer, the said loss should be increased by Rs. 5,63,07,943/- for the purpose of deduction u/s 80-IC for this Unit. The assessing officer may examined the issue of initiation of penalty u/s 270 A of the Act. The assessee was allowed reasonable opportunity of being heard which included personal hearing." 4.3 It was submitted that the assessee thereafter carried the matter in appeal before the DRP against the draft assessment order passed under section 143(3) r.w.s 144C of the Act proposing the adjustment so done by the TPO and the DRP upheld the order of the TPO and the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat only an amount of Rs. 1,83,750/- was claimed on account of certain donation made by the assessee, however, it is crystal clear on the face of the return of income that there is no deduction which has been claimed under section 80IC of the Act. It was accordingly submitted that even where the adjustment so proposed by the TPO is upheld by the DRP which the assessee wishes to contest separately, in absence of any deduction claimed u/s 80IC, AO has wrongly added the amount of Rs. 5,63,07,943/- to the returned income of the assessee. 4.6 It was submitted that subsequently, the assessee also moved a rectification application before the AO who has disposed off the rectification application vide order dt. 06/06/2023 wherein he has refused to carry out the necessary rectification and the relevant findings of the AO reads as under: "6. The assessee vide his rectification application dated 19.12.2022 has requested that the addition of Rs. 5,63,07,943/- has wrongly been made as the assessee has not claimed any deduction u/s 80IC of the Act and the same may be deleted. In this context, it is stated that the assessee company has also claimed before the Ld. TPO that it has not claimed any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the deduction u/s 80IC of the Act is irrelevant for benchmarking of inter-unit transactions. 9. In view of the above, it is clarified that there is not any mistake apparent from the records which needs to be rectified and does not comes under the purview of section 154 of the Income Tax Act, 1961. Therefore, rectification application becomes in-fructuous and the same is disposed off as above without any action." 4.7 It was accordingly submitted that where there is no such claim of deduction made by the assessee under section 80IC of the Act, there is no basis for making addition on account of the adjustment as proposed by the TPO and confirmed by the DRP. 5. The Ld. CIT/DR was heard who has relied on the order of the lower authorities. It was submitted that whether assessee has made any claim under section 80IC or not, the benchmark analysis has to be done by the assessee in respect of inter-unit transactions and the same needs to be determined whether the same was at arms length or not. 6. We have heard the rival contentions and perused the material available on record. The TPO has returned a finding that Unit V is eligible for deduction u/s 80IC as per claim of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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