TaxTMI 
TaxTMI 
2016 (6) TMI 1282
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.... other domestic corporate issues. For the sake of ready reference, grounds of appeal raised in appeal are reproduced hereunder: Direct Tax Grounds: 1.1 Based on facts and circumstances of the case, the Additional Commissioner of Income-tax, Range 1(3), Mumbai (hereinafter referred to as the AO) while passing the order dated 10th October, 2011 under section 143(3) r.w.s. 144C pursuant to the directions dated 28th September, 2011 of the Dispute Resolution Panel -II (hereinafter referred to as the DRP) erred in reducing 'Other Income' as shown below:- Particulars TMX Unit (Rs.) Multipurpose Formulation Unit (Rs.) Total (Rs) Interest on Employee loans 9,494 39,029 48,523 Other interest income 4,573 - 4,673 Miscellaneous income (Misc interest, service charges, lease rent) - 19,98,499 19,98,499 Total 14,167 20,37,528 20,51,695 from the amount of profit eligible for deduction under Section 80IB. 1.2 Without prejudice to the above, the AO erred in not excluding net amount of "Other Income' while computing the profits eligible for deduction under section 80IB. 2.1 The AO erred in setting off t....
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....details of the above expenses is allowable under section 37(1). 4.3 The AO while giving effect to the directions of the DRP, erred in, not considering the submissions made by the appellants during the course of hearing and overlooking the facts in the matter. 5.1 The AO erred in disallowing an amount of Rs. 11,55,931/- on account of provision for maintenance charges to building and an amount of Rs. 33,18,027 on account of provision for miscellaneous repair to plant and machinery under section 37(1) of the Act. 5.2 The AO erred in holding that the provisions represent mere estimates for repairs and maintenance of building and plant & machinery. 5.3 The AO while giving effect to the directions of the DRP, erred in, not considering the submissions made by the appellants during the course of hearing and overlooking the facts in the matter. The appellants pray that the AO be directed suitably in the matter. 6. The AO erred is not following the directions of the DRP, thereby not granting depreciation on software expenses of Rs. 1,75,000 disallowed in the assessment year 2006-07 as being capital in nature. 7. The AO erred in charging i....
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.... 'Crop Protection segment' is further divided into 'Licensed Manufacturing' and 'Contract Manufacturing'. Under the 'License Manufacturing' segment the assessee operates as a fullfledged manufacturer of chemicals for crop protection. It also imports pesticides and formulations which are repacked and sold in the Indian markets. Under the 'Contract manufacturing' segment assessee is manufacturing active ingredient Thiamethoxam ("TMX") and its derivative products. This involves imports of raw materials from its AE, Syngenta Asia Pacific Pte. Ltd.("SAPL") and sale of finished goods to them. It has a manufacturing unit at Goa where it manufactures such active ingredients. Under the seeds segment as a whole, the assessee imports foundation/breeder seeds from its AE and then seeds procured are further developed at facilities located at Pune and Aurangabad. Post development of the seeds, the same are multiplied with the help of the farmers and sold locally. The transactions undertaken with the AE under the 'Crop Protection Segment' for the assessment year 2007-08 were as under:- PAYMENTS:- S No. Description of the transaction Amount (In rupees) AY 2007-08 Method Selected ....
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....2% comprising of 7 comparables as the financial data of one comparable for the current year was not available. The list of such comparables companies along with the average profit mean was as under: Sr.No. Name of company OP/Sales % 1 Asia Arch Timber Protection Ltd 9.68 2 Bhagiradha Chemicals & Industries Ltd 14.84 3 Dhanuka Pesticides Ltd. 8.93 4 Ficom Organics Ltd - 5 Kilpest India Ltd 6.38 6 Nagarjuna Agrichem Ltd. 10.83 7 Phytochem (India) Ltd. 5.93 8 Sudarshan Chemicals Industries Ltd. (Segment) -12.37 Average mean 6.32% 5. The Ld. TPO after carrying out the detail analysis of the documentation and replies filed by the assessee, agreed with the most of the comparables, except for M/s. Sudarshan Chemicals Industries Ltd., which was sought to be excluded by the TPO on the ground that, firstly, it was a loss making comparable segment; secondly, there was under-utilization of the capacity of the relevant segment; and lastly, proportionate pigment export was more vis-àvis its Agro Chemical pigment export. The TPO further noted from the assessee's reply before him that t....
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.... Operating profit 21,00,04,674 OP/Sales 4.74% ALP OP/Sales A 9.43% Net Sales B 4,42,59,49,105 Arm's length operating profit C=AxB 41,73,67,001 Total Operating cost D=B-C 4,00,85,82,104 Less: non-AE purchase E 1,85,12,28,319 Less: non-AE other expenses F 55,58,21,927 Arm's length value of AE purchases G=D-E-F 1,601,531,858 105% of ALP H= Gx105% 1,600,984,238 Adjustment (1,808,894,185 - 1,601,531,858) 207,362,327 7. The DRP too confirmed the action of the TPO after observing and holding as under:- • "Comparability of a company in TNMM is guided by three factors, viz function, asset, risk. If a company is functionally dissimilar TPO would be correct in rejecting such comparable. Under utilization of capacity reflects upon asset profile and function profile of a company. Similarly, a consistent loss making company has different asset profile than a normal company. Such companies are therefore correctly rejected by the TPO on FAR analysis basis. The assessee has not made....
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....ction 92C(4) states that the total income of the assessee may be computed by TPO "having regard to" the arms length price so determined. We find no reason to hold that the TPO has used the phrase loosely. • Under entity level TNMM, it is the operating margin of an assessee which is compared with average operating margin of the industry. Computation of operating margin excludes non operating, non business reasons behind fluctuations in profits. Operating profit therefore reflects performance of a industry player under market conditions. Operating profit is different from PBT/PAT. Since market factors are uniform to all the players of the industry and it is only the operating margin which is compared, TPO is correct in not allowing separate adjustment towards market factors. • The assessee has not pointed out as to how the TPO has disregarded the provisions of Rule 10B(2) and (3) read with Rule 10C. A mere statement without substantiation cannot be considered. • Transfer of profit under TP provisions generally holds that if there is sub optimal profit in transactions then Arms length pricing needs to be established vis a vis AEs. In this backgro....
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....ls. He also gave the following details to show the various capacity utilization of the comparables selected and accepted in this year:- Name of the comparable Capacity utilization (%) Bhagiradha Chemicals & Inds Ltd. 64% Dhanuka Pesticides Ltd. 47% Kilpest India Ltd. 40% Nagarjuna Agrichem Ltd 63% Phyto Chem (India) Ltd. 49% SudarshanChemical-Segment agro-chemicals 53% Thus, all the comparables were in the capacity utilization range of approximately 40% to 60%, therefore, Sudarshan Chemicals which had operated at 53% of the total capacity cannot be rejected on this ground. 10. On the issue of the proportion of pigment exports being more than Agro Chemical Division segment of Sudarshan Chemicals, Mr. Bhutani submitted that the pigment segment is entirely different from the agro chemical segment of the Sudarshan Chemicals. The total exports of Sudarshan Chemicals were 35% of the total turnover, of which pigment segment contributed 95% and agro chemical segment contributed the balance 5%. The segmental profitability of the pigment and agro chemical segments have been separately reported in the financial accounts which is evident from Sch....
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....ccount then, it can be seen that, assessee has made huge margins in license manufacturing segment. The comparative details of the margins of the assessee and comparables as stated before us are reproduced hereunder: AY Arm's length operating profit margin of comparable companies Appellants' operating margin of licensed manufacturing segment 2003-04 5.34% 11.30% 2004-05 6.39% 10.43% 2005-06 6.07% 15.41% 2006-07 6.41% 12.17% 2007-08 5.84% 4.21% 2008-09 7.02% 12.53% 2009-10 4.96% 14.30% Thus, it was submitted that it was only in AY 2007-08, the operating margin was dropped to 4.21%. 12. Mr. Bhutani submitted that another very important reason for decline in operating margin in the case of the assessee was that, the sale price of its key product, namely "Topik" which was a premium product of the assessee and contributed approximately 15 to 20% of the total sales of this segment and also approximately 35% of the gross margin had sharply declined. Until AY 2006-07, the assessee was sole seller of this product in the country and it accordingly charged premium price, thus, resulting into high profitability in thi....
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.... correct arm's length result. Otherwise, if comparability is being done under TNMM, then similar factors of market conditions and bad weather would have affected across all the industries that is, in the case of comparables also, therefore, it cannot be the factor for making the adjustment. The average arithmetic mean of profit margin of various comparables takes care of all such factors, therefore, no adjustment should be made. Regarding rejection on the ground that the said comparable was a loss making entity and had a under-utilization of the capacity, he strongly relied upon the order of the DRP and submitted that, comparison has to be seen with the assessee and not the comparables, therefore, considering all the factors Sudarshan Chemicals has rightly been excluded by the TPO as well as by the DRP. 14. We have heard the rival submissions, perused the relevant finding given in the impugned orders as well as material relied upon before us. So far as transfer pricing adjustment of Rs. 20,73,62,327/- in the segment of "Crop Protection- License Manufacturing", the entire controversy revolves around inclusion/ exclusion of one comparable namely, Sudarshan Chemical Industries Ltd.....
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....his segment and contributes almost 35% of the gross profit margin of this segment. Until AY 2006-07, the assessee was the sole seller of this product in the country and, therefore, it was able to charge premium price, however, in the assessment year 2007- 08, due to generic substitute of the product which had entered into market, un-anticipated competition had arisen which forced the assessee to reduce the price or else assessee would have been out of the market. In order to sustain its market share, the assessee was forced to reduce the selling price of its product. If the saleprice would not have been reduced then assessee would have firstly, lost its market share significantly; secondly¸ would have been saddled with significantly high inventory which would have carried huge cost; thirdly, would have blocked huge amount of working capital; and lastly, may have led down to write down the net realizable value of huge inventory. The comparative average sale price of 'Topic' in the earlier years and in this year had already been incorporated above. From the said comparative details, it has been pointed out that, the average sale-price of 'Topic' per metric ton, which was Rs. 2,....
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.... material so as to effect price or profit in the open market and if there is one such thing, then such a material difference needs to be eliminated through adjustments. The factors governing the price or profit in a transaction may depend upon business strategies, market conditions, competitions, market penetration schemes, geographical locations, climatic conditions, etc. Guidelines issued by OECD also recognized the business strategies adopted by the companies which have a bearing on profitability levels. Para 1.60 and 1.62 of OECD guidelines for the sake of ready reference are reproduced hereunder: "Para 1.60 of the Guidelines states as under: "Business strategies also could include market penetrate schemes. A taxpayer seeking to penetrate a market or to increase its market share might temporarily charge a price for its product that is lower than the price charged for otherwise comparable products in the same market. Furthermore, a taxpayer seeking to enter a new market or expand (or defend) its market share might temporarily incur higher costs (e.g. due to start-up costs or increased marketing efforts) and hence achieve lower profit levels than other taxpayers operating i....
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....s not get eliminated from the market completion, it has sold the product at lower price. Definitely this business strategy had a huge impact on the profit margin of the assessee which is evident from the comparative pricing and the profitability on account of this product (i.e. "Topik") as incorporated above. Ld. Counsel had tried to demonstrate before us that, if the "Topik" would have been sold at a price commanded by the assessee earlier then the operating profit on the sale would have been 9.72% which would otherwise have fallen within the arm's length range vis-a-vis the comparables. This factor has majorly affected the profit margin, because 35% of the gross profit margin was on account of the sale of this agro product alone. Once the price of such a product has been reduced substantially by 45% then definitely it has a huge impact on profit margin as discussed above. On these facts, we are of the considered opinion that a reasonable and accurate adjustment should be made to the profit margin because of huge price reduction of a premium product which constituted 35% of its gross profit margin. If such an adjustment is carried out, the net profit margin would be much higher. W....
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....on. As pointed out by the Ld. Counsel, the Special Bench in case of DCIT v Quarks Systems P Ltd. (supra) it has been held that merely because comparable company is loss making it cannot be rejected from the list of comparables for the purpose of computation of ALP. Similar view has been echoed by other decisions as already cited above. OECD guidelines of extreme results and comparability consideration have given following guidelines:- "3.64 An independent enterprise would not continue lossgenerating activities unless it had reasonable expectations of future profits. See paragraphs 1.70 to 1.72. Simple or low risk functions in particular are not expected to generate losses for a long period of time. This does not mean however that lossmaking transactions can never be comparable. In general, all relevant information should be used and there should not be any overriding rule on the inclusion or exclusion of lossmaking comparables. Indeed, it is the facts and circumstances surrounding the company in question that should determine its status as a comparable, not its financial result. 3.65 Generally speaking, a loss-making uncontrolled transaction should trigger further investigati....
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....f the company's turnover. We agree with the contention of the Ld. Counsel and thus, this objection too does not support the case of the TPO. 20. The last objection raised by the TPO which has been stressed by the Ld. DR also is that, in the immediately preceding assessment year, that is AY 2006-07, the assessee itself has rejected the said comparable from comparability analysis and, therefore, assessee in this year on same facts cannot plead for inclusion. This contention of the revenue has not been rebutted before us by the Ld. Counsel on material facts rather the case of the Ld. Counsel before us is that, in subsequent three assessment years, that is, 2008-09, 2009-10 and 2010-11, the assessee has included it as a comparable in its Transfer Pricing Study report which has been accepted by the TPO. Thus, it has been pleaded that in view of the principle of consistency, this comparable should be included in the AY 2007-08 also. In absence of any cogent reasons as to why in AY 2006-07 the Sudarshan Chemicals was excluded by the assessee itself, we find it very difficult to accept the theory of consistency as pleaded by the assessee before us. Whether this company was rejected by t....
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....") for the use of proprietary rights, proprietary information, valuable technical know-how and trademarks owned by its AE, SSAG; to produce, promote and commercialize corn and sunflower seeds in the domestic market. In terms of said agreement, the assessee paid SSAG, royalty @ 5% on local sales and 8% on export sales. The details of royalty payment given by the assessee were as under:- S.No. Name of product Sale(Rs.) Rate Royalty(Rs.) 1 Com(Local) 24,65,52,184 5.00 1.23.28,609 2 Com(Export) 4,09,95,285 8.00 32,79,625 3 Sunflower(Local) 41,03,44,329 5.00 2,05,17,216 4 Sunflower(Export) 2,52,76,928 8.00 20,22,154 In response to the show cause notice, the assessee vide letter dated 3rd September, 2010 explained the entire manufacturing process including benefits of technical knowhow received from the AE. Technical collaboration agreement including 'specific approvals' received from the RBI was also furnished. The TPO noted that the technical know-how received is in the form of training to the breeders, production employees, marketing personnel and growers of sunflower and corn seeds. The training includes pr....
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.... the farmers and thereby increase in sales and market share of the assessee in the seeds segment. The technical royalty was being paid for a host of rights/licenses in respect of corn and sunflower seeds. The relevant extracts of Article 2-Object of the technical collaboration agreement for sunflower and corn seeds between SCPAG and the assessee was given as under: "Article 2 - Object 2.1 SSAG hereby grants to SIL, who accepts, according to the terms and conditions of the present Agreement, a non-exclusive, non-transferable, royaltybearing license to use or utilize any and all of the PROPRIETORY RIGHTS, PROPRIETARY INFORMATION and TRADEMARKS in order to produce, promote and commercialise SEED within the TERRITORY ("the license") 2.2 The license does not include the right to grant sub-licenses 2.3 The license includes the rights to multiply the lines and varieties and produce the BASIC SEED as per SIL's requirement. The License also includes the right to have SEED produced by sub-contractors within the TERRITORY on behalf of SIL provided that subcontractors shall be bound with SIL by provisions as severe as in the present Agreement and especially shall accept, by writ....
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....he appropriate ALP and the same cannot be determined as nil or a randomly assigned percentage. He also referred to many decisions that the revenue authorities cannot question the commercial wisdom of the assessee. Further benefit test is not the criteria and is not the method prescribed under the Transfer Pricing provision. Thus, Arm's Length Price of technical services has to be determined on the basis of one of the prescribed methods and it cannot be taken at "Nil". 26. For the CUP argument, that is, similar royalty payment made a third party in pursuance to agreement dated 30th August, 1995, he submitted that the reasons for the TPO for rejecting the same that it was entered in the year 1995 and has no relevance to the payment made in 2006, cannot be upheld, because, the said agreement of 1995 was still in force and will remain so unless it is terminated by either of the parties. Hence, it cannot be the ground, because this agreement has not been terminated. Further, ITAT Mumbai Bench in the assessee's own case for the assessment year 2002-03 to 2004-05 held that royalty paid in respect of licensed manufacturing segment should be benchmarked, using CUP method (in ITA nos. 297....
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....lty bearing license. As per agreement, the said license includes the rights to multiply the lines and varieties and produce the basic seed as per the assessee's requirement. In the TP Study report, the assessee has highlighted the benefits from such a technical knowhow agreement and how it has helped the assessee to develop the capability of seeds that cater to the tropical climate of the region. The significant R&D required for this purpose has not been undertaken by the assessee. If all these technical know-how given by AE have been used including trademark and information for the business carried out by assessee in India, then the payment made for usage and utilization of such rights, information and trademarks has to be reckoned as "royalty" only. Here it is not the case that payment has been made in this year for the first time albeit is a recurring payment from the earlier years and also in the subsequent years and no such adjustment or disallowance has been made in the seeds segment. It has been categorically stated before the authorities below and before us, which has not been rebutted by the revenue that, the payment of royalty in the seed segment had passed the test of fu....
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....We find that the Tribunal in respect of 'license manufacturing segment' has restored back the matter to the file of the TPO for benchmarking the same by using CUP method. On the same principle, we are also in agreement that CUP method should be applied for benchmarking this transaction. Accordingly, we restore this issue to the file of the TPO/AO to examine the terms and conditions of the agreements with the third party and whether such terms are still relevant for the year under consideration and also the terms and conditions entered into by the assessee with its AE. 31. Further, we also find great strength in the alternate argument taken by the Ld. Counsel before us that, under the segment of seed business, the operating profit margin is 23.70% which is far more and higher than the comparable companies which have been arrived at 10.80%. In such case, no adjustment in respect of the said international transaction is required. However, this aspect of the matter has not been dealt upon either by the AO or by the DRP, therefore, only for the purpose of verification and examination of this contention, the matter is being restored to the file of the TPO to see whether the assessee's....
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....ction 80IB. As regards the 'sale of scrap', the Ld. Counsel before us has filed the details of miscellaneous income which is on account of sale of scraps. Since these evidences were not filed before the authorities below, therefore, same needs to be verified by the AO and accordingly, we are setting aside this issue for examining the same. We also find that the Tribunal in the assessment year 2002-03 to 2004-05 vide order dated 31.07.2013 has decided this issue in favour of the assessee. Accordingly, the AO after examining the details will decide this issue in line with the decision of the Tribunal. Thus, ground no.1.1 and 1.2 are treated as partly allowed for statistical purposes. 36. In ground No. 2.1 to 2.5, the assessee has mainly challenged the set off of losses of 80IB units against the profits of non 80IB units for working out the eligible profits under section 80IB. 37. Brief facts are that, the assessee company in its Audit report in Form No.10 had made a claim for deduction under section 80IB with regard to its 4 unit namely: i) Multipurpose Formulation Unit; ii) Thiamethoxam Unit; iii) Topik Unit; and iv) Profenofos Unit. The AO required the assessee as to why dedu....
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....4 In similar and circumstances and accounting treatments, it has been held that losses in two units and profit in one unit should be set off before computing deduction - CIT vs. Sundravel Match Industries Pvt Ltd. (MAD) 245 ITR 605 and CIT vs Macmilan Co. of India Ltd. (MAD) 243 ITR 403. Further, it has been held in CIT vs RPG Telecom Ltd. (Kar) 292 ITR 355 that "set off loss in other u nits against the income from eligible units and compute deduction only on the net income". and accordingly, computed the deduction under section 80IB in the following manner: Name of Unit Profit Loss Net Amount 1) Multipurpose Formulation Unit 20,00,51,614 20,00,51,614 2) Thiamethoxam Unit 2,19,69,406 2,19,59,406 3) Topik Units -- 2,31,03,440 2,31,03,440 4) Profenofos Unit -- 49,83,380 49,83,380 Total 22,20,21,020 2,80,86,820 19,39,34,200 The DRP also confirmed the said disallowance of deduction. 38. Before us the Ld. Counsel submitted that, for the purpose of computing the deduction under section 80IB, each unit has to be considered as a separate and independent unit. In su....
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.... Hon'ble Delhi High Court after relying upon the decision of Supreme Court in the case of Synco Industries Ltd, 299 ITR 44 reads as under:- "8. It is further clear from a plain reading of the aforesaid provisions that the deduction under S. 80-I is to be made in case the gross total income includes any profits and gains derived from an industrial undertaking, etc., in case such profits and gains are included in the gross total income of the assessee. The deduction in the case of a company, in view of the proviso to s. 80-1(1), is to be given to the extent of 25 per cent of such profits and gains of such an industrial undertaking. It is also clear that in view of s. 80-1(6), which begins with a non obstante clause, the quantum of deduction is to be computed as if the industrial undertaking were the only source of income of the assessee during the relevant years. In other words, each industrial undertaking or unit is to be treated separately and independently. It is only those industrial undertakings, which have a profit or gain, which would be considered for computing the deduction. The loss making industrial undertaking would not come into the picture at all. The plain reading o....
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....ld arise, but not otherwise. While doing so, the Supreme Court further made it clear that the gross total income must be determined by setting off business losses of earlier years before allowing deduction under Chapter VI-A and that if the resultant income is 'nil', then the assessee cannot claim any deduction under Chapter VI-A. While coming to the aforesaid conclusion, the Supreme Court was also confronted with an argument which had been raised on the basis of the provisions of s. 80-1(6) that the profits of one industrial undertaking cannot be set off against the losses suffered by the other industrial undertaking. The Supreme Court was of the view that the provisions of s. 80-1(6) were only for the purposes of computing the quantum of deduction, whereas the gross total income was to be computed in terms of the Act as provided in s. 80B(5). It is apparent that the Supreme Court distinguished the provisions of s. 80-1(6) which was for the purposes of computing the quantum of deduction from the provisions of s. 80-I (1) and s. 80-13(5) which deal with the manner in which the gross total income is to be considered. The Supreme Court observed as under:- "13.While c....
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....ss total income of the assessee is "nil" the assessee would not be entitled to deductions under Chapter VI-A of the Act." 11. From the above extract, it is apparent that the Supreme Court did not at all hold that while computing the deduction under s. 80-1(6), the loss of one eligible industrial undertaking is to be set off against the profit of another eligible industrial undertaking. All that the Supreme Court said was that in computing the gross total income of the assessee, the same has to be determined after adjusting the losses and that, if the gross total income of the assessee so determined turns out to be 'nil', then the assessee would not be entitled to deduction under Chapter VI-A of the said Act. 12. We agree with the submissions made by the learned counsel for the assessee that there is nothing in the decision in the case of Synco Industries Ltd. (supra) which would enable us to detract from the position indicated by this Court in Dewan Kraft System (P) Ltd. (supra) and, as indicated by us above. In fact, the Supreme Court clearly held that while computing the quantum of deduction under s. 80-1(6), the AO, no doubt, has to treat the profits derived from a....
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....rchases was not accepted. In appeal CIT(A) agreed with AO that this being the first year of change, the method of accounting u/s 145A was bound to have impact on the profit. He, therefore, confirmed the addition made by AO, aggrieved by which the assessee is in appeal before Tribunal. 2.3.1. Before us the learned AR for the assessee submitted that the assessee was following the exclusive method of accounting in which duty was not routed through the profit loss account. It was also submitted that adjustment u/s 145A will have to be made at all stages including opening stock and purchases and if this was done this would not result in any addition to the total income. Reliance was placed on the judgment of Hon'ble High Court of Bombay in case of Mahalaxmi Glass Works Pvt. Ltd (318 ITR 116) and on the judgment of Hon7ble Supreme Court in case of CIT Vs. Dynavision Ltd. (348 ITR 380). The learned DR on the other hand supported the orders of authorities below and placed reliance on the finding given in the respective orders. 2.3.2 We have perused the records and considered the matter carefully. The dispute is regarding addition on account of duty to the closing stock value. Und....
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....2008-09, vide which following grounds have been raised:- 1(a) Based on facts and circumstances of the case, the Additional Commissioner of Income-tax, Range 1(3), Mumbai (hereinafter referred to as the AO) while passing the order dated 10th October, 2011 under section 143(3) r.w.s. 144C pursuant to the directions dated 28th September, 2011 of the Dispute Resolution Panel -II (hereinafter referred to as the DRP) erred in reducing the following Óther Income' from the amount of profit eligible for deduction under Section 80 IB of the Act:- Particulars Multipurpose Formulation Unit (Rs.) Topik Unit (Rs) TMX Unit (Rs) Profenos Unit (Rs.) Total (Rs.) Interest Income - - 11,989 33,753 45,742 Rental Income 79,975 - - - 79,975 Other External Income 14,46,431 28,12,878 - - 42,59,309 Commission Income from Group company 4,95,215 9,90, 873 - - 14,86,088 Total 20,21,621 38,03,751 11,989 33,753 58,71,114 2.(a) Based on facts and circumstances of the case and in law, the learned AO in order passed under section 143(3) r.w.s. 144C of the Act pursuant to the directions of the DRP....
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.... and circumstances of the case, the AO erred both on facts and in law in adding Rs. 3,53,30,934/- to the income of the Appellant by disallowing the payment of royalty on corn and sunflower seeds to its Associated Enterprise. (b) The Appellant prays that the above adjustment be deleted. 8. Based on the facts and circumstances of the case and in law, the learned AO erred in non-granting of correct credit of taxes paid during the year. 9. Based on the facts and circumstances of the case and in law, the learned AO erred in charging interest under section 234B of Rs. 4,50,28,500. 10. Based on the facts and circumstances of the case and in law, the learned AO erred in charging interest under section 234C of Rs. 1,31,22,379 as against Rs. 1,12,28,787 chargeable per the return of income". 50. It has been admitted by both the parties that, ground No.1 is similar to the ground raised in assessee's appeal for assessment year 2007-08 which has been decided above. So far as interest on employee loan is concerned, same have been decided against the assessee by the Tribunal in earlier years, therefore, this issue is decided against the assessee. 51. As regards the other income, ....