Assessee's appeal allowed, issues remanded for verification, credit for TDS granted, ESOP deduction allowed.

The Tribunal allowed the appeal by the assessee, remanding several issues to the DRP for verification and fresh consideration. The Tribunal directed the AO to grant credit for TDS and Self-Assessment Tax, and allowed the deduction for ESOP expenses. The decision was pronounced on February 14, 2022.

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Issues Involved:
1. Assessment order bad in law.
2. Reliance on the Draft Assessment Order (DAO) of AY 2009-10 for making adjustments for AY 2015-16.
3. Denial of relief under section 10AA of the Act.
4. Disallowance under section 40(a) of the Act in respect of payments to non-resident Associated Enterprises (AEs) and Non-AEs.
5. Disallowance of claim made under section 40(a) of the Act pertaining to AY 2014-15.
6. Disallowance of amounts under section 37(1) which have been disallowed suo moto by the Appellant under section 40(a) of the Act.
7. Disallowance of Employee Stock Option Plan (ESOP) expenses.
8. Assessment and reference to the Assistant Commissioner of Income-tax - Transfer Pricing.
9. Determination of arm's length price in respect of purported Advertisement, Marketing and Promotional (AMP) function.
10. Selection of functionally dissimilar companies while determining the arm's length price for the alleged AMP function.
11. Non-exclusion of warranty expenses from the total AMP expenses.
12. Non-grant of credit for entire Tax Deducted at Source (TDS).
13. Short grant of Foreign Tax Credit (FTC).
14. Non-grant of credit for Self-Assessment Tax paid.
15. Initiation of Penalty Proceedings.
16. Levy of interest under section 234B of the Act.
17. Other consequential reliefs.

Detailed Analysis:

1. Assessment Order Bad in Law:
The assessee argued that the assessment order dated April 30, 2021, was invalid as it was passed in undue haste without affording the opportunity to furnish additional submissions and documents. The Tribunal noted that this issue was general in nature and did not require adjudication.

2. Reliance on the Draft Assessment Order (DAO) of AY 2009-10:
The Tribunal observed that the reliance on the DAO of AY 2009-10 was previously rejected in the assessee's own case for AY 2013-14. The Tribunal dismissed this ground, stating that the issue was already covered by the earlier decision.

3. Denial of Relief under Section 10AA of the Act:
The Tribunal noted that the relief under section 10AA was examined in the assessee's case for AY 2013-14, where it was held in favor of the assessee subject to the proceeds being brought into India in convertible foreign exchange. The Tribunal remanded the issue to the DRP to verify whether the sale proceeds were brought into India in convertible foreign exchange.

4. Disallowance under Section 40(a) of the Act:
The Tribunal observed that this issue related to disallowance of payments to IBM Singapore for shrink-wrapped software was considered in the assessee's case for AY 2013-14. The Tribunal remanded the issue to the DRP to verify the details and apply the principles laid down by the Supreme Court in the case of Engineering Analysis Centre of Excellence (P.) Ltd.

5. Disallowance of Claim Made under Section 40(a) of the Act Pertaining to AY 2014-15:
The Tribunal noted that this issue was covered in the assessee's case for AY 2013-14 and remanded the issue to the DRP for fresh consideration and verification of details.

6. Disallowance of Amounts under Section 37(1):
The Tribunal observed that this issue was considered in the assessee's case for AY 2013-14 and remanded the issue to the DRP for verification of details and consideration of the alternate submission.

7. Disallowance of Employee Stock Option Plan (ESOP) Expenses:
The Tribunal noted that the issue of deductibility of ESOP expenses was covered by various judicial precedents, including the Special Bench decision in the case of Biocon Ltd. The Tribunal directed to grant deduction to the assessee on ESOP expenses in accordance with the law.

8. Assessment and Reference to the Assistant Commissioner of Income-tax - Transfer Pricing:
The Tribunal did not specifically address this issue separately, indicating that it was covered under the broader discussion of the other grounds.

9. Determination of Arm's Length Price in Respect of AMP Function:
The Tribunal referred to the decision of the Delhi High Court in the case of Sony Ericsson Mobile Communications India P. Ltd. and noted that AMP expenses do not constitute an international transaction. The Tribunal remanded the issue to the AO/TPO to verify the aspect based on the documents submitted by the assessee.

10. Selection of Functionally Dissimilar Companies:
The Tribunal did not specifically address this issue separately, indicating that it was covered under the broader discussion of the AMP function.

11. Non-Exclusion of Warranty Expenses from the Total AMP Expenses:
The Tribunal directed the AO to exclude warranty expenses from the total AMP expenses as per the directions of the DRP.

12. Non-Grant of Credit for Entire TDS:
The Tribunal directed the AO to grant credit for the TDS deducted on verification in accordance with the law.

13. Short Grant of Foreign Tax Credit (FTC):
The Tribunal did not specifically address this issue separately, indicating that it was covered under the broader discussion of the other grounds.

14. Non-Grant of Credit for Self-Assessment Tax Paid:
The Tribunal directed the AO to grant credit for the Self-Assessment Tax on verification in accordance with the law.

15. Initiation of Penalty Proceedings:
The Tribunal did not specifically address this issue separately, indicating that it was consequential in nature.

16. Levy of Interest under Section 234B of the Act:
The Tribunal did not specifically address this issue separately, indicating that it was consequential in nature.

17. Other Consequential Reliefs:
The Tribunal noted that these grounds were consequential in nature and did not require separate adjudication.

Conclusion:
The Tribunal allowed the appeal by the assessee as indicated in the detailed analysis, remanding several issues to the DRP for verification and fresh consideration in accordance with the law. The Tribunal directed the AO to grant credit for TDS and Self-Assessment Tax on verification and allowed the deduction for ESOP expenses. The Tribunal's decision was pronounced in the open court on February 14, 2022.

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