TaxTMI 
TaxTMI 
2014 (1) TMI 921
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....os. 2.2 to 2.5 relate to the issue of royalty payment. 4. Briefly the facts are the assessee formerly known as Saint- Gobain Vetrotex India Ltd. was a wholly owned subsidiary of Saint-Gobain Vetrotex International S.A., France (SGVI) and part of Saint Gobain Group. The assessee is engaged in the business of manufacturing and trading of glass fibre products and related articles. For the AY under dispute, the assessee filed its return of income on 29/10/2007 by declaring total income at Nil under the normal provisions after setting off of brought forward losses and book profit of Rs. 5,54,63,007/- u/s 115JB of the Act. The assessee's return was initially processed u/s 143(1) of the Act. Subsequently, however, the assessee's case was selected....
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....ting royalty payment of Rs. 4,27,37,655/-, which was not accepted by the TPO and treated as adjustment to be made u/s 92CA of the Act. As a consequence of the order passed by the TPO, the AO passed a draft assessment order proposing additions of Rs. 4,27,37,655/- as per the order of the TPO. The AO also disallowed the claim of depreciation on non- competing fees and marketing net work charges. The assessee filed objection against the draft assessment order before the DRP. 5. The DRP rejected the objections of the assessee and confirmed the draft assessment order. 6. Being aggrieved of the aforesaid order of the DRP, the assessee is in appeal before us. 7. The learned AR specifically referring to ground No. 2.2 contended before us that th....
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....on of learned AR that the DRP while rendering its decision has not considered all the documentary evidences submitted by the assessee. 9. We have heard the submissions of the parties and perused the material on record. The limited grievance of the assessee in this ground is that the DRP has not at all considered either submissions of the assessee or documentary evidences produced before it while rejecting the assessee's claim of royalty payment to its AE. On perusal of the order of the DRP, prima-facie, it gives an impression that they have not considered the submissions of the assessee or the documentary evidences while rejecting the claim of the assessee. The order has been passed in a rather mechanical manner on more than one issues by ....
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....of being heard in the matter. These grounds of the assessee are thus allowed for statistical purposes. 10. Ground No. 2.6 is with regard to computation of operating margin by the assessee at 3.59% without considering the adjustment towards cost of repairs and plant & machinery and adjustment towards incremental depreciation by the assessee. 11. The learned AR submitted before us that the assessee in case of its furnace assets (included in Plant & Machinery) has adopted higher rate of depreciation based on the estimated useful life in comparison to the rates as prescribed in Schedule XIV of the Companies Act. However, the comparables selected by the TPO claimed depreciation as per Schedule XIV of the Companies Act. Therefore, the assessee ....
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....ns of the parties, we remit the issue back to the DRP, who shall consider this issue afresh after taking into account all the facts and materials on record and pass a reasoned order after affording reasonable opportunity of being heard to the assessee. 15. In ground No. 3, the assessee has challenged the disallowance of depreciation of non-compete fees and marketing net work rights. 16. We have heard the submissions of the parties and perused the material on record. The claim of depreciation on non-compete fees and marketing net work rights have been disallowed by the AO and confirmed by the DRP on the ground that they do not come within the definition of intangible assets u/s 32(1)(ii) of the Act. The contention of the learned AR is that....