Tribunal grants deductions, remands issues for further verification.

The Tribunal allowed the deduction under section 10AA for the assessee, directing the Assessing Officer to compute the relief based on verified details. The Tribunal also held that ESOP expenses are allowable, disallowing the disallowance made by the AO. Additionally, the Tribunal remanded issues regarding disallowance of payments to AEs and third parties without TDS, rejection of claim for refund of excess DDT, and transfer pricing adjustment back for further verification and consideration. Other issues such as non-grant of credit for TDS and TCS, deduction under section 80G, and foreign tax credit were also restored to the AO for appropriate action.

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Issues Involved:
1. Assessment order bad in law
2. Reliance on Draft assessment order of AY 2009-10 for making adjustments
3. Denial of relief u/s.10AA
4. Disallowance of payments to AEs and third parties u/s.40(a)
5. Disallowance of ESOP expenses
6. Rejection of claim for refund of excess DDT
7. Transfer Pricing adjustment
8. Variance in total income as computed in final assessment order
9. Non-grant of credit for entire TDS
10. Non-grant of credit for entire TCS
11. Non-grant of deduction u/s.80G
12. Short grant of Foreign Tax Credit (without prejudice)
13. Initiation of Penalty proceedings
14. Interest u/s.234B & 234C
15. Consequential Relief

Issue-wise Detailed Analysis:

1. Assessment order bad in law:
The ground was general and not specifically addressed.

2. Reliance on Draft assessment order of AY 2009-10 for making adjustments:
The assessee did not press this ground during the hearing, and it was dismissed as not pressed.

3. Denial of relief u/s.10AA:
The Assessing Officer (AO) denied the relief u/s.10AA due to various discrepancies and non-compliance with conditions prescribed under the section. The Dispute Resolution Panel (DRP) upheld the AO's decision but directed the AO to verify certain documents and compute the relief accordingly. The Tribunal noted that the AO had selectively considered issues and failed to re-compute the relief despite verifying the details. The Tribunal allowed the deduction u/s.10AA for the assessee and directed the AO to compute the relief based on verified details.

4. Disallowance of payments to AEs and third parties u/s.40(a):
The AO disallowed payments made to AEs and third parties without TDS. The DRP directed the AO to verify the nature of these payments. The AO partially allowed the claims but retained significant disallowances. The Tribunal remanded the issue back to the DRP for further verification, especially considering the nature of reimbursements and secondment costs.

5. Disallowance of ESOP expenses:
The AO disallowed ESOP expenses, which were cross-charged by IBM US to IBM India. The Tribunal noted that the coordinate bench in the assessee's own case for AY 2015-16 had allowed such expenses. Following judicial precedents, the Tribunal held that ESOP expenses are allowable and deleted the disallowance.

6. Rejection of claim for refund of excess DDT:
The assessee claimed that dividends declared to its US parent company should be taxed at a lower rate as per the India-US DTAA. The Tribunal noted conflicting views on this issue and referred it back to the AO for fresh consideration in light of the law and the outcome of a pending decision by a larger bench.

7. Transfer Pricing adjustment:
The AO made adjustments for AMP expenses, considering them as non-routine and attributing them to the development of intangibles owned by the AE. The Tribunal, following the coordinate bench's decision in the assessee's own case for AY 2015-16, remanded the issue back to the AO/TPO for verification based on submitted documents and directed that no separate adjustment is needed if the expenditure is factored in net cost for computing margin.

8. Variance in total income as computed in final assessment order:
This issue was restored to the AO for examination.

9. Non-grant of credit for entire TDS:
The Tribunal restored this issue to the AO for verification and granting of TDS credit in accordance with the law.

10. Non-grant of credit for entire TCS:
This issue was also restored to the AO for examination and appropriate action.

11. Non-grant of deduction u/s.80G:
The Tribunal restored this issue to the AO for verification and granting of the deduction as per the law.

12. Short grant of Foreign Tax Credit (without prejudice):
This issue was restored to the AO for examination.

13. Initiation of Penalty proceedings:
These grounds were general or consequential and did not require specific adjudication.

14. Interest u/s.234B & 234C:
These grounds were general or consequential and did not require specific adjudication.

15. Consequential Relief:
These grounds were general or consequential and did not require specific adjudication.

Separate Judgments:
There were no separate judgments delivered by different judges in this case. The order was pronounced by the Tribunal as a common order for all the appeals.

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