TaxTMI 
TaxTMI 
2015 (11) TMI 580
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....he Dispute Resolution Panel, Mumbai (in short 'the DRP') in order dated 14.11.2014. 2. In this appeal, assessee has raised the following Grounds of appeal:- "1) The learned Dispute Resolution Panel (DRP) erred in confirming the action of the Assessing Officer in adding back Rs. 8,66,364/- to the Total Income of the Appellant being the loss on sale of machinery by the Appellant to its Associated Enterprise. Having regards to the facts and circumstances of the case, and the provisions of the law, the said addition is unjustified and the Appellant submits that the Assessing Officer be directed to delete the same . 2) Without prejudice to Ground No.1 above, the learned DRP erred in confirming the action of the Assessing Officer in hold....
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....as assessed at Rs. 13,45,01,430/-. One of the additions made to the returned income, and which is the subject matter of dispute before us by way of Ground of appeal no. 1, relates to an amount of Rs. 8,66,364/-, which has been added to the returned income in conformity with the order passed by the Transfer Pricing Officer (in short 'the TPO') dated 31.10.2013 u/s 92CA(3) of the Act. During the year under consideration, assessee had sold few old machineries to its associated enterprise abroad, which constituted an 'international transaction' within the meaning of section 92B of the Act. The Assessing Officer made a reference u/s 92CA(1) of the Act to the TPO for computation of arm's length price in relation to the international transactions ....
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....id adjustment proposed by the Assessing Officer in the draft assessment order. The DRP rejected the objections, and the Assessing Officer has passed the final assessment order, wherein, the aforesaid amount has been added to the returned income. 4. Before us, the Ld. Representative for the assessee has pointed out that the sale value of the machineries sold to the associated enterprise was determined on the basis of the valuation report which has been accepted by the Indian Customs authorities and, therefore, there was no justification for disregarding the stated consideration for the purposes of arriving at the arm's length sale price of the machineries sold to the associated enterprise. 5. On the other hand, the Ld. CIT(DR) has defe....
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....es. Out of the eight transactions of such sales, the CUP data relied upon by the assessee has also been accepted by the TPO in five cases inasmuch as the sale price stated in the invoices have been accepted. It is only in three sale transactions that such CUP data has not been accepted and the TPO considered the written down value of the machineries as the arm's length sale price. Notably, in such three transactions, assessee had suffered a loss because sale values, based on the valuer's report, was lower than the WDV of such machineries. Quite clearly, the approach of the TPO is inconsistent. The CUP data which has been found to be acceptable in considering five transactions of sales as being in consonance with the arm's length price, cann....
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....ssing Officer holding it to be a 'capital expenditure'. 9. Before us, it was a common point between the parties that similar issue had come up before the Tribunal in assessee's own case for assessment year 2009-10, wherein, vide ITA No. 2188/Mum/2014, Dated 21.04.2015, such expenditure has been held to be a revenue expenditure. Following discussion in the order of the Tribunal dated 21.04.2015 (supra), is worthy of notice:- "6. We heard the rival contentions and perused the record. The department is placing reliance fully on the decision rendered in the case of Southern switchgear Ltd (supra). However, a perusal of the said order would show that the assessee therein was entitled to use the technology even after the termination of the ....
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....e option to extend the agreement or renew the same. During the currency of the agreement the foreign collaborator had undertaken not to surrender its patents without the consent of the assessee and to make available to the assessee any improvements, modifications and additions to designs. The assessee was not to disclose to third parties any of the documents made available to the assessee without having received a written authorization from the foreign collaborator. The Tribunal held that the amount paid by the assessee under the agreement constituted revenue expenditure. The High Court concluded that the features of agreement clearly established that what was obtained by the assessee was only a licence and what was paid by the assessee to ....