Tribunal remits international transaction issue for speaking order, upholds interest disallowance, approves royalty payment addition. Ground referred back for partial appeal allowance.

The Tribunal remitted the issue of upward adjustment on international transactions back to the CIT(A) for adjudication, emphasizing the need for a speaking order. The disallowance of interest expenses under section 36(1)(iii) was upheld based on consistency with a previous decision. The addition on account of royalty payment was approved as similar relief had been granted previously. The non-adjudication of a specific ground was referred back to the CIT(A) for consideration, resulting in a partial allowance of the appeal for statistical purposes.

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Issues Involved:
1. Dispute over upward adjustment of Rs 1,83,53,946 on international transactions.
2. Disallowance of Rs 1,90,05,000 on account of interest expenses under section 36(1)(iii) of the Act.
3. Addition of Rs 56,35,500 on account of royalty payment for the use of landmark.
4. Non-adjudication on ground no. 2(d) before the CIT(A).

Issue 1 - Upward Adjustment on International Transactions:
The Assessing Officer disputed the deletion of an upward adjustment of Rs 1,83,53,946 on international transactions. The assessee argued that the reference to the Transfer Pricing Officer was not required as the value of transactions did not exceed Rs 15 crores. The Tribunal noted the absence of a document indicating the threshold limit of Rs 15 crores at the relevant time. Citing a relevant case law, the Tribunal remitted the matter to the CIT(A) for adjudication on this point, emphasizing the need for a speaking order.

Issue 2 - Disallowance of Interest Expenses:
The Assessing Officer disallowed Rs 1,90,05,000 as interest expenses under section 36(1)(iii) of the Act, relating to investments in subsidiaries. The CIT(A) had deleted this disallowance, which was upheld by a coordinate bench for the assessment year 2009-10. As no material differences were found in the facts, the Tribunal approved the CIT(A)'s decision and declined to interfere in the matter.

Issue 3 - Addition on Account of Royalty Payment:
Regarding the addition of Rs 56,35,500 on account of royalty payment for the use of a landmark, the Assessing Officer treated the expenditure as capital expenditure but allowed depreciation at 25%. The Tribunal found no reason to interfere as the facts were similar to a previous assessment year where the relief was confirmed by a coordinate bench. Consequently, the Tribunal approved the CIT(A)'s decision and dismissed the appeal.

Issue 4 - Non-Adjudication on Ground No. 2(d):
The Tribunal observed a factual lapse in the non-adjudication of ground no. 2(d) before the CIT(A). This issue was remitted to the CIT(A) for adjudication on merits in accordance with the law. Ground nos. 3, 4, 5, and 6 were deemed premature for consideration pending the adjudication on the reference to the TPO. Ground no. 7 was dismissed as it was not pressed. The assessee's appeal was partly allowed for statistical purposes based on the above considerations.

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