AI Drafter 
TaxTMI 
TaxTMI 
2017 (9) TMI 1149
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....er of Income Tax, Circle 3(2), New Delhi ("Ld. AO") which is bad in law, contrary to the facts and must be quashed. 2. Disallowance of interest expense on External Commercial Borrowings C'ECBs') 2.1 On the facts in the circumstances of the case and in law, the Ld. AO/ Hon'ble DRP erred in making a disallowance of Rs. 38,53,481 towards interest expenditure incurred in relation to the ECBs availed by the Appellant for acquisition of fixed assets for continuation of its existing business, by invoking the proviso to section 36(i) (iii) of the Act. 2.2 Without prejudice, on the facts in the circumstances of the case and in law, the Ld. AO erred in not allowing depreciation under section 32 of the Act on the disallowed interest amount. 2.3 Without prejudice, on the facts in the circumstances of the case and in law, the Ld. AO erred in not allowing depreciation under section 32 of the Act on the interest expenditure already disallowed in the preceding assessment years. 3. Disallowance of circuit accruals 3.1 On the facts in the circumstances of the case and in law, the Ld. AO/ Hon'ble DRP have erred in making a disallow....
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.... 6.1 The Ld. Transfer Pricing Officer (TPO')/ AO/ DRP erred in making an addition of Rs. 21,57,89,704 under section 92CA of the Act to the total income of the Appellant on account of adjustment in Arm's Length Price ('ALP') of the international transactions pertaining to availing of intra-group services. 6.2 The Ld. AO/ TPO/ DRP erred, on facts in the circumstances of the case and in law, in rejecting the combined transaction approach of benchmarking adopted by the Appellant in its TP documentation and proceeding to determine the arm's length price of international transactions pertaining to availing of intra-group services from its AEs on a standalone basis by rejecting Transactional Net Margin Method ('TNMM') as the most appropriate method. 6.3 The Ld. AO/ TPO/ DRP erred in disregarding the elaborate documentary evidence submitted as part of assessment proceedings to erroneously assume that 'no benefit' has been conferred upon the Appellant from the international transactions pertaining to availing of intra-group services and thereafter re-determining the ALP of the said transaction as 'NIL'. 6.4 Withou....
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....nt order 3. The assessee company filed its return of income on 30.11.2011 declaring income of Rs. 85,32,56,895/-. Subsequently, the return was picked up for the scrutiny and notice u/s 143(2) was issued on 19.09.2012. During the course of assessment proceedings reference u/s 92CA of the Act was also made by the ld. AO to the ld Transfer Pricing Officer to determine the arm‟s length price of international transactions entered into by the assessee with its Associate Enterprises. The Transfer Pricing Officer passed order u/s 92CA(3) of the act on 09.10.2014 making adjustment of Rs. 21,57,89,704/- The Assessing Officer incorporating the above adjustment on account of transfer pricing adjustments passed a draft of proposed assessment order u/s 144C read with section 143(3) of the Income Tax Act on 27.03.2015 assessing the total income at Rs. 1,48,21,29,756/-The assessee filed its objection before the Dispute Resolution Panel which was disposed of by the ld Dispute Resolution Panel vide directions dated 17.11.2015. Consequently, the Assessing Officer passed order u/s 144C(13) of the Income Tax Act on 31.12.2015 determining the total income of the assessee at Rs. 1,22,62,04,402/-....
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....cts in this year from the facts in preceding years, accordingly, we direct the ld AO to delete the disallowance of interest. Hence, ground no 2 of appeal is allowed. 9. Ground No. 3 of the appeal is with respect of Disallowance of circuit accruals. During the Financial Year 2010-11, the appellant company incurred circuit charges aggregating to Rs. 175.03 crores (out of which Rs. 83.56 crores was towards infrastructure cost and balance Rs. 91.47 crores was towards last mile charges for services provided by other telecom operators). This amount of Rs. 175.03 crores included the payments amounting to Rs. 156.02 crores made during the year as well as the year end circuit accruals of Rs. 19.01 crores in respect of which bills/ invoices could not be received before March 31, 2011. Out of the accruals of Rs. 19.01 crores, invoices of Rs. 17.98 crores were furnished to the AO, and the balance accruals for which no bills/evidences for reversals could be submitted amounted to Rs. 1.03 crores. Thus, the Ld. AO disallowed the circuit charges amounting to Rs. 1.03 crores. 10. Parties before us submitted that this issue is identical to ground in appeal of the assessee for AY 2009-10 & 2010....
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....see is allowed. 17. Ground No. 5 of the appeal of Disallowance of Support Service expenditure. The appellant has incurred support service expenditure of Rs. 13,42,85,216 paid to its group company i.e. AT&T Communication Services India Private Limited („ACSI‟) for support services rendered by it. The AO disallowed the expenditure on the basis that in AY 2008-09, on the same issue, department has filed appeal before the Hon‟ble ITAT and the decision on the issue is awaited as on date of this order. Therefore, to maintain consistency in the stand of the department on this issue, addition is made on account of this expenditure. 18. Parties before us submitted that this issue is identical to ground in appeal of the assessee for AY 2009-10. Parties also reiterated the same arguments. 19. We have gone through the relevant facts of the case and arguments and submissions advanced by both the parties in connection with the disallowance towards support service expenditure. This ground of appeal has already been decided in AY 2009-10, I.T.A. No. 2518/2014 and AY 2010-11 ITA No. 1778/2015 for even date and since there is no change in facts in this year from the facts ....