2018 (10) TMI 1600

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....lution Panel ('DRP') dated 13.11.2014. 2. Brief facts of the case are that M/s New York Life Insurance Company General Funds is an US based company and is primarily engaged in the business of life insurance. For the Asstt. Year 2010-11, the assessee filed their return of income on 22.9.2010 declaring the taxable income of Rs. 63,34,93,811/- and subsequently, revised the same on 28.3.2012 by declaring the total income at Rs. 57,43,37,091/-. During the assessment proceedings, learned Assessing Officer (Ld. AO) observed that in the year under consideration, the assessee-company licensed its completely owned trademark "New York Life" to an Indian company named as "Max New York Life Insurance Company Ltd. (for short "MNYL") through an agreeme....

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....hile complying with the directions of the learned DRP, learned AO, after hearing the assessee again held that the entire amount of Rs. 63,34,93,811/- is liable to tax. Assessee is, therefore, before us in Appeal No.2125/Del/2015 whereas challenging the directions of the learned DRP, the revenue preferred ITA No.1400/Del/2015. 7. At the outset, it could be seen that though the learned DRP directed the learned AO in specific terms that the Royalty income in the hands of the assessee at Rs. 57,43,37,091/- exclusive of the service tax element of Rs. 5,91,56,720/- alone had to be brought to tax, subsequently , while giving effect to such an order, learned AO passed the assessment order bringing the entire amount of Rs. 63,34,93,811/- to tax. ....

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.... AO in respect of their receiving only Rs. 50,74,59,146/- out of the sum of Rs. 57,43,37,091/- after deducting the tax of Rs. 6,68,77,942/- and the said fact was confirmed by MNYL in their letter dated 22.1.2014, the confusion in this matter had arisen because of the difference in the figures furnished by MNYL in their two letters, namely, 22.1.2014 and 30.1.2014 respectively. The figures mentioned in the letter dated 22.1.2014 are in conformity with the case of the assessee. However, in the subsequent letter MNYL stated that an amount of Rs. 617,857,313/- has been debited in its books of accounts as Royalty paid to the assessee. On this, the learned AO entertained a doubt and because of the discrepancy occurred in the figures, as stated ab....

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....57,313/- and Rs. 57,43,37,091/- is the amount of Rs. 4,35,20,223/- which was debited in the accounts of MNYL towards pre paid expenses charged during the year. The confirmation from the MNYL establishes the same. Even at this stage, in all fairness, learned AO should have made enquiries into the figure of Rs. 4,35,20,223/- instead of blindly saying that this new fact that has emerged at that stage was not before the revenue at the scrutiny stage, as such, the fresh reconciliation filed by MNYL u/s 133(6) of the Income-tax Act, 1961 does not prove the contention of the assessee that MNYL paid or credited only the amount of Rs. 57,43,37,091/- excluding the amount of service tax to the assessee as per MNYL books of accounts for the relevant pe....