TaxTMI 
TaxTMI 
2016 (8) TMI 811
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....dopted CUP method. Grounds No.5 to 12 are against the various adjustments to be made for determination of the Arm's Length Price. 4. The learned counsel for the assessee submitted that these adjustments have been denied to the assessee by the TPO, and such denial has been confirmed by the Dispute Resolution Panel. He submitted that similar issue had arisen in assessee's own case for the assessment year 2009-10 and this Tribunal in ITA No.471 /Hyd/2014, vide order dated 17.4.2015, has considered the issue at length and had remanded the issue of determination of the Arm's Length Price to the Transfer Pricing Officer with certain directions. He submitted that following the same, for this year also, assessment needs to be remanded to the file of the Transfer Pricing Officer with similar directions. 5. The Learned Departmental Representative also confirmed that similar issues had arisen in assessee's own case for the earlier assessment year, but to keep the issue alive, he supported the orders of the lower authorities. 6. Having regard to the rival contentions and the material on record, we find that on similar issue, this Tribunal has considered the merits of the issue and has....
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....efore, rejecting the entire payment without there being any analysis on the CUP method cannot be accepted. In the guise of analyzing the transactions in the CUP method, the TPO has not brought any evidence on record to reject the 1% payment made to Italcementi Group. Moreover, while determining the price at NIL on the issue, the TPO surprisingly holds that a ssessee has transferred its 'Zuari Brand' to 'Italcementi Group'. We are unable to understand this logic. Italcementi Group never obtained, acquired or used Zuari Brand anywhere in the world, so that this cannot be considered for Transfer Pricing analysis. It is the Italcementi Group brand which is used by assesseecompany. The TPO's analysis of AMP expenses are also not correct. Even though Italcementi Group was being used from earlier years, AMP expenses of current year also included in this, which is not correct. Moreover, Italcementi Group itself is a 50% shareholder in the assesseecompany from the beginning. Therefore, it cannot be stated that 'Zuari Cements' is exclusive brand owner of the Birla Group in exclusion of Italcementi Group. The entire approach by the TPO is biased and cannot be justi....
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....AO being contested by assessee in this appeal, whereas other disallowances made by AO are not objected. Among them, the first one is disallowance of Community Development Expenses of Rs. 76,36,096/- being contested in Ground No.13. 4.1 Assessee-company had incurred expenses of the above amount towards special activities like medical camps, installing water bores and bore-wells and carrying out infrastructure development in villages etc. AO disallowed the entire expenditure on the reason that: a) The expenditures were not supported by any concrete evidence; b) The business necessity was also not proved beyond doubt; c) Identity of payee was not established. 4.2 It was submitted that above expenditure has been incurred for the welfare of the employees and people in nearby villages and these are part of 'corporate social responsibility' expenditure of the company. It was submitted that assessee employs employees from nearby villages and these expenditures are necessary to retain such employees and motivate them to work with the company for a longer term by providing necessary amenities in the villages. These expenditures are essenti....
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....xpenditure was spent for the purpose of 'corporate social responsibility' of assessee-company which was allowed as a business expenditure u/s.37(1) by the DRP itself. The ground is considered allowed for statistical purposes. Giveaways: 5. The next item of disallowance is 'giveaways' to the tune of Rs. 14,06,559/-. Under this head, AO disallowed an amount of Rs. 14,06,559/- stating that this expenditure was not warranted and had no nexus with the business and not supported by concrete evidence and also no identity of receivers. We are unable to understand the above four reasons given by AO. If we pursue the orders, it is very clear that expenditure was incurred for purchase of gifts to advocates marriages, purchase of coolers gifted to Joint Director (Mines), purchase of gifts to M.V.Mysoora Reddy's son's marriage function, purchase of silver plate gifted to Inspector of Factories, purchase of gifts to Railway employees, purchase of gift for ESI official daughter's marriage, purchase of gifts to other Govt. employees etc. Except the purchase of gold coins from Corporation Bank, Bangalore on 16-02- 2008 for Rs. 3,85,166/- vide Invoice No.120 for ....
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...., after considering the judicial precedents on the issue and also the judgment of the Hon'ble Supreme Court in the case of Smif Securities Ltd. (348 ITR 302) has directed the Assessing Officer to arrive at the correct value of goodwill in the light of the judgment of the Tribunal at Mumbai in the case of DCIT Vs. Toyo Engineering India Ltd. in ITA No.3279/Mum/2008, if the fair value of assets of the 'SVCL' is less than the consideration of amalgamation, the difference between the two should be considered as the amount incurred for 'goodwill', and accordingly, the correct amount of depreciation will be calculated. We find that the assessee company amalgamated with Sri Vishnu Cements Ltd.(SVCL), a company whose principal business is to produce and manufacture all kinds of Portland Cement, including pozzolana cement. Both the companies are merged with effect from 1.1.2007 pursuant to the scheme of amalgamation sanctioned by the Hon'ble High Court of Andhra Pradesh on 29th June, 2007. The goodwill amounting to Rs. 17975.03 lakhs arose as a result of merger and subsequently, the amount was increased by Rs. 16.95 lakhs as additional purchase consideration was paid. The assessee h....
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....ntal Representative has opposed the admission of the additional ground of appeal on this issue, on the ground that the facts are not on record and it is not a legal issue, we find that the relief is being claimed by the assessee because of the provision introduced by the Finance Bill of 2015 and the facts with regard to the clam of depreciation on the plant and machinery are on record. What the assessee is now claiming is additional depreciation not allowed in the year of acquisition and installation. Therefore, we see no reason for denying the admission of the ground. We, therefore, admit the additional ground and remit the same to the file of the Assessing Officer with a direction to verify the facts as to the percentage of depreciation allowed in the year of acquisition and installation and if the assessee is eligible for the additional depreciation of 50% by virtue of the Finance Bill of 2015, the same may be allowed. This ground is accordingly treated as allowed for statistical purposes. 15. As for ground no.21 for the claim of provision for site restoration fund amounting to Rs. 88,30,000, it is stated by the assessee that this fund was inadvertently added back by the asse....
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....llowance of depreciation of Rs. 11,404,26,479 and observed that the assessee has claimed additional depreciation at the rate of 20% on the assets acquired during the year less than180 days and out of the additions made, the assessee acquired assets worth Rs. 527,71,05,271 on 30th and 31st March, 2010. He observed that the additional depreciation is available only on new machinery, also, only when it is put to use. He observed that the machinery itself was purchased on 30th and 31st of March, and it cannot be put to use immediately, as it requires time for installation. Therefore, following the decision of the Chennai Bench of the Tribunal in the case of Brakes India Ltd. (144 ITD 0403), Assessing Officer disallowed additional depreciation claimed by the assessee at 50% of 20% on the ground that the assets were not put to use even for less than 180 days since they were acquired only on 30th and 31st of March. 19. Learned counsel for the assessee submitted that the Assessing Officer has allowed regular depreciation on the same assets, while disallowing additional depreciation holding that the assets were purchased only on 30th and 31st of Mach of the relevant financial year, and t....