2017 (8) TMI 414

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.... on u/s.143(3) of the Act, on 16/12/2011, determining the income of the assessee at Rs. 3.32 crores.During the course of hearing before us, the Authorised Representative (AR)stated that the assessee was not interested in pursuing Ground no.6, therefore,same stands dismissed as not pressed. 2.Though the assessee has raised five other grounds of appeal.But all of them deal with the same issue-non reconciliation of various items of income.First effective ground of appeal (GOA.1&2)is about difference between cumulative income for the period FY. 2005-06 to FY.2008-09 as per TDS certificate and cumulative income offered to tax.During the assessment proceedings,the AO found that there was difference between cumulative income for the period FY.200....

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....rtaining to AY. 2009-10,that the disputed amount could be taxed in that AY.,that shortfall pertaining to other assessment years could not be brought to tax in AY.2009-10 unless it was shown that income accrued/ received during the year,that it was not the case of the AO that income for FY.2005-06,2006-07, 2007-08 pertained to AY.2009-10.Alternatively,it was argued that under section 199 r.w. Rule 37 BA(3) of the Rules pro rata TDS credit pertaining to shortfall in income for the year relating to HL Infinet should be allowed.However,the AO,after considering the submissions of the assessee, held that the assessee had not shown the income accrued to it for the year under consideration, while filing the return of income. Finally, he made an add....

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....und of appeal(GOA- 2&3)is decided in favour of the assessee,in part. 3.Addition on account of credit notes issued to Reach Global Services Ltd (RGSL),an Associated Enterprise (AE) of the assessee is the subject matter of the second ground of appeal.During the assessment proceedings,the AO found that the assessee has entered into an agreement with RGSL whereby it was to provide network support services to RGSL,that as per the TP arrangement,the amount receivable from RGSL for services was to be determined as per a formulae viz. (Return on costs + Return on assets)-(External customer revenue + ISP revenue + other income),that during the year under appeal the assessee had raised invoices of Rs. 15.76 crores on AE on provisional basis, that on....

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....service tax,that there was no justification for making any addition.The DR stated that matter could be decided on merits. 3.3.We find that the assessee had filed copy of ledger accounts of RGSL considering credit note and final invoice vide letter dtd. 07/12/2011,copy of invoices,copy of credit note dtd. 6/04/2009 issued for Rs. 2,49,73,220/- and confirmation of accounts from RGSL for year under appeal.From the statement (Pg. 207 of the PB),it is clear that RGSL had included the credit note of USD $5,53,232 in its books of account and working of final fees receivable from RGSL (Rs.13, 45, 69,123/-).We find that all the above facts were not analysed properly by the AO/ FAA during the assessment/appellate proceedings.Therefore,in the interes....