TaxTMI 
TaxTMI 
2015 (6) TMI 673
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....e Appellant. 2) Without prejudice to Ground No.1, the learned DRP erred in confirming that interest expenditure on borrowings utilized for the purpose of business activities of the Appellant was not allowable under Section 36(1)(iii) of the Act and in confirming the disallowance of interest expenditure aggregating to Rs. 2,48,648/- towards the earning of exempt dividend income under sub-clause (ii) of Clause 2 of Rule 8D. 3) Without prejudice to the Appellant's contention that no interest is allocable to the earning of exempt dividend income and in any event, the Appellant submits that the disallowance computed at Rs. 2,48,648/- is arbitrary and grossly excessive and the same requires to be reduced substantially. 4) The learned DRP erred in confirming the disallowance of administrative and other expenditure aggregating to Rs. 8,28,725/- towards the earning of exempt dividend income under sub-clause (iii) of Clause 2 of Rule 8D. 5) Without prejudice to above ground and in any event, the Appellant submits that the disallowance computed at Rs. 8,28,725/- is arbitrary and grossly excessive and the same requires to be reduced substantially. 6) The learned DRP erred in confirmin....
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....investment a sum of Rs. 21.36 crore has been in the shares of foreign subsidiaries of the assessee and the dividend income from the foreign subsidiaries is taxable, therefore, no disallowance can be made u/s 14A in respect of the investment made in the foreign subsidiaries. The assessee has also contended that the investment has been made from the assessee's own fund, therefore, no disallowance is called for on account of interest expenditure u/s 14A. The DRP has directed the Assessing Officer to exclude the investment made in the foreign companies for the purpose of disallowance u/s 14A. As regards the remaining investment, the DRP has confirmed the proposed disallowance made by the Assessing Officer on account of interest expenditure as well as administrative expenditure. Before us, the Ld. Authorized Representative of the assessee has submitted that the entire investment has been made by the assessee in its wholly owned subsidiaries/companies. He has pointed out that during the year under consideration, two fresh investment were made by the assessee and both were in the foreign subsidiaries of the assessee, therefore, no disallowance is called for on account of interest expendit....
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....allowance. The issue before us is limited to the extent of disallowance in respect of the investment in the wholly owned Indian subsidiaries. The assessee has raised two contentions in this respect that the investment in question is out of the assessee's own fund and that too in subsidiaries. It is pertinent to note that the fund flow statement filed by the assessee is only regarding the fresh investment made by the assessee during the year which is otherwise excluded for the purpose of disallowance u/s 14A being the investment in foreign companies. It is not clear from the record whether any disallowance was made on account of interest expenditure in the earlier assessment years. Since the investment was made in the earlier assessment years, therefore, the disallowance on account of interest expenditure has to be as per the funds available with the assessee and the finding on the issue of disallowance u/s 14A for the earlier years is relevant for the purpose of deciding this issue for the year under consideration. Similarly, the issue of disallowance on account of administrative expenses has to be decided keeping in view the finding of the earlier assessment years on this account.....
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....ated 22.11.2013 in ITA No. 7369 in para 8 and 9 as under:- "8. We have considered the rival submissions and also perused the relevant material available on record. It is observed that out of the total overheads of Rs. 154.63 crores incurred by the assessee during the year under consideration, overheads to the extent of Rs. 141.91 crores were directly allocated by the assessee to the eligible units being directly attributable to the said segment. The balance amount of overheads to the extent of Rs. 12.72 crores representing the indirect expenses were allocated by the assessee between the eligible business and non-eligible business in the ratio of turnover and this basis adopted by the assessee was accepted by the A.O. except in the case of advertisement & publicity expenses amounting to Rs. 4.23 crores, schemes and promotions expenses amounting to Rs. 0.83 crores, miscellaneous expenses amounting to Rs. 0.72 crores, conveyance and traveling expenses amounting to Rs. 0.47 crores and rent, rate & taxes amounting to Rs. 0.48 crores. As explained by the ld. counsel for the assessee before us, the expenditure on advertisement & publicity and schemes and promotions was incurred mainly to....
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....sonable basis. In the case of Consolidated Coffee Ltd. v. State of Karnataka (supra) cited by the ld. counsel for the assessee, it was held by the Hon'ble supreme Court that when a bifurcation of expenses is not possible, some reasonable test will have to be adopted and that adoption of the method of apportioning on the basis of gross receipts could not be said to be a perverse method to apply. Keeping in view the decision of Hon'ble Supreme Court in the case of Consolidated Coffee Ltd. v. State of Karnataka (supra) and having regard to the facts of the case, we are of the view that the allocation of expenses made by the assessee between eligible business and non-eligible business for the purpose of computing deduction u/s 80IB/80IC of the Act was reasonable and there was no justifiable reason for the A.O. to disturb the same and make reallocation on adhoc basis. We, therefore, delete the addition made by the A.O. by restricting the claim of the assessee for deduction u/s 80IB/80IC of the Act by reallocating the common indirect expenses and allow ground No. 1 & 2 of the assessee's appeal." 13. We further note that for the A.Y. 2005-06, the Tribunal has again decided this issue by ....
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....n, i.e., 60 per cent. 3.2 The Income-tax Appellate Tribunal, Delhi "F" Bench in the case of Expeditors International (India) (P.) Ltd. v. CIT [2008] 118 TTJ 652 (Delhi) has held that peripherals such as printer, scanners, NT Server, etc., form integral part of the computer and the same, therefore, are eligible for depreciation at the rate of 60 per cent. as applicable to a computer. 4. Respectfully following the aforesaid decisions of the co-ordinate Bench, we uphold the order of the learned Commissioner of Income-tax (Appeals) in allowing the depreciation at 60 per cent. on computer peripherals and accessories, and, thus, the ground raised by the Revenue is rejected. 5. In the result, the appeal filed by the Revenue is dismissed." 6. We are in agreement with the view of the Tribunal that computer accessories and peripherals such as, printers, scanners and server, etc., form an integral part of the computer system. In fact, the computer accessories and peripherals cannot be used without the computer. Consequently, as they are the part of the computer system, they are entitled to depreciation at the higher rate of 60 per cent." 19. We further note that an identical issue has be....
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....nd insect repellent hit-line chalks. All these products are basically household insecticides and are used as insect repellents and are covered under the general category of Insecticides. All these products are exported by the assessee Company to its associated enterprises globally depending on the market preferences and requirements of each country. The transfer pricing adjustments as explained above, have been made in respect of sales to four countries namely Sri Lanka, Bangladesh, Malaysia and Kenya. In cases of the vaporizers and insect liquid repellants, the assessee Company has suffered a loss on the vaporizer and the liquid repellant combination pack which is sold by way of the initial product offering to the customer and the refills which are repetitive transactions, are then sold at a much higher price hereby the assessee Company makes a profit if the transactions are viewed together, thereby benefitting the company on an overall basis. This marketing strategy of aggregating similar products has been adopted by the assessee Company in Sri Lanka and Bangladesh. Similarly, when determining the sale price of the heaters and mats, which is the initial product offering by the as....
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.... Taj Sats Air Catering Ltd. Vs. Additional CIT dated 20.08.2013 in ITA No. 8790/Mum/2011. 24. On the other hand, the Ld. DR has relied upon the order of authorities below and submitted that each product sold by the assessee to the AE is a separate product and, therefore, as per the provisions of Transfer Pricing, each transaction has to be compared with the uncontrolled transactions without clubbing together. 25. We have considered the rival submissions as well as relevant material on record. The assessee bench marked its selling price using comparable uncontrolled price (CUP ) method. The TPO found that the assessee has aggregated all the exports made to a particular country for the purpose of bench marking against the comparable transactions with unrelated parties in those countries. The TPO held that such bench marking is required to be done for each transaction and for each particular product. Accordingly, the TPO has made the addition of Rs. 14,61,781/- on this account. There is no dispute regarding the most appropriate method applied by the assessee as internal CUP. The only controversy before us is whether the various insecticides products sold by the assessee to its AEs i....
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....ricing guidelines. In order to examine whether the number of transactions are closely linked or continuous so as to aggregate for the purpose of evaluation it is to be considered that one transaction is follow-on of the earlier transaction and then the subsequent transaction is carried out and dependent wholly or substantially on the earlier transaction. It can be viceversa when the earlier transaction has been entered into between parties by keeping in mind that a continuous transaction of similar nature will be entered into between the parties thereafter. Therefore, when the transactions are influenced by each other and particularly in determining the price and profit involved in the transactions then those transactions can safely be regarded as closely linked transactions. The OECD guidelines has referred a portfolio approach as business strategy consisting of tax payers bundling certain transaction for the purpose of earning an appropriate return across portfolio rather than single product. For instance some products may be marketed by the tax payer with a low profit or even at loss because they create a demand for other products or related services of the same tax payer that a....