AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (4) TMI 276
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....45(2) of the Act, the appellant was required to make provision for all liabilities/expenses for the subject financial year. 1.3. On the facts, in the circumstances of the case and in law, the Ld. AO/DRP erred in not appreciating that the appellant produced evidences to the extent of more than 99% for utilization/ reversal made in subsequent years and no adverse finding has been given by Ld.AO/DRP on the same. 1.4. On the facts, in circumstances of the case and in law, the aforesaid disallowance on account of year end accruals is grossly incorrect as the same is squarely covered in favour of the appellant by the order of Hon'ble ITAT in its own case for AY 2010 -11. 1.5. On the facts, in the circumstances of the case and in law, the Ld. AO/DRP erred in not allowing deduction of year-end accruals of INR 6,76,11,402/- disallowed in the preceding assessment year (i.e. AY 2013-14). 1.6. Without prejudice, on the facts, in the circumstances of the case and in law, the Ld. AO/DRP erred in not observing that, disallowance made in respect of the aforesaid accruals for the subject year, should be allowed as deduction in the subsequent year in which such accruals are reversed ....
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....lant company to AWPS are in the nature of pure reimbursement on cost to cost basis and thus, there is no sum chargeable to tax in India. 3.5. Without prejudice to the above, on the facts, in the circumstances of the case and in law, the Ld. AO/DRP erred in not appreciating that since the appellant has recouped the entire amount remitted to AWPS alongwith markup thereon, which has been offered to tax in India, no addition is warranted. 4. Short credit for Tax Deducted at Source 4.1. On the facts, in the circumstances of the case and in law, the Ld. AO erred in not granting appropriate credit of taxes deducted at source as allowable to the Appellant for the year under consideration. 5. Levy of interest u/s 234B and 234C of the Act. 5.1. On the facts, in the circumstances of the case and in law, the Ld. AO erred in incorrectly charging interest u/s 234B and 234C of the Act. 6. Initiation of penalty proceedings. 6.1. On the facts, in the circumstances of the case and in law, the Ld. AO erred in initiating penalty proceedings u/s 271(1)(c) of the Act against the Appellant on account of the above adjustments made in the final assessment order." 3. AT&T Communicatio....
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....ces relatable to the aforesaid year end accruals, were received/paid by the assessee in the subsequent years, the aforesaid year end accruals were reversed and the actual expense was charged as an expense and debited to the profit and loss account. The Ld. AR submitted that the matter is squarely covered by the order of the Tribunal in assessee's own case for Assessment Year 2010-11 being ITA No. 1016/Del/2015 order dated 15.02.2018 and Assessment Year 2011-12 being ITA No. 1653/Del/2016, order dated 31/10/2018. 6. The Ld. DR relied upon the order of the Assessing Officer and the order of the CIT (A). 7. We have heard both the parties and perused the material available on record. The issue in the present appeal is squarely covered in favour of the assessee by the Tribunal in assessee's own case for Assessment Year 2010-11 and 2011-12. The Tribunal held in A.Y. 2010-11 as under: "17. AO disallowed an amount of Rs. 56,15,035/- and added back the same to the income of the taxpayer on the ground that the taxpayer does not have the basis of recording year end accrual. The ld. DRP approved the proposed addition on this account. ........ 24. Hon'ble Supreme Court in case cited a....
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....he AO in the calculation nor it is the case of the AO that the taxpayer had not paid certain bills and the taxpayer is following mercantile system of accounting and the expenses are having element of estimation as well as scientific basis, keeping in view the past trend, the expenses are required to be allowed in the year of creation itself, particularly, when the Revenue authorities has allowed the entire claim of expenditure in the subsequent years. 26. So, following the law laid down by the Hon'ble Apex Court in Rotork Controls India (P) Ltd. (supra) and the decision rendered by the coordinate Bench of the Tribunal in AGNSI in ITA No. 1059/Del/2015 for AY 2010-11, we are of the considered view that when the taxpayer has worked out the liability by using a substantial degree of estimation by proving 95% of the invoices on the basis of historical trend, no disallowance can be made. So, we order to delete this addition." In the present Assessment Year as well the Assessing Officer has not pointed out any mistake in the calculation nor there was case by the Revenue that assessee has not paid certain bills. In fact during the financial year relevant to the said assessment year,....
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....herwise, both ACSI and appellant are profit making entities and hence, there was no tax incentive for the parties to deflate the revenues earned by appellant. The decision was totally based on commercial considerations. By transferring the cost from ACSI to appellant no added tax advantage is being availed by appellant. We are also of the view that commercial expediency of a particular expenditure incurred by businessman should be examined from the perspective of the business person and no third part, including the tax authorities, is entitled to question the commercial reasoning/ justification of the expenditure so incurred. Reliance in this regard is placed on the following judicial precedents furnished by the assessee: i. CIT v. Panipat Woollen & General Mills Co Ltd (103 ITR 66) (Supreme Court) ii. CIT v. Sales Magnesite (P) Ltd [1995) 214 ITR 1 iii. Binodiram Balchand vs. Commissioner of Income Tax (48 ITR 548) iv. Calcutta Landing and Shipping Co Ltd vs. CIT (65 ITR 10 (Cal High Court) v. CIT vs B Dalmia Cement Ltd (254 ITR 377) 76. Respectfully following the principles laid down in the aforesaid judicial precedents, we find that where the appellant has actu....
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....e material available on record. The Tribunal in A.Y. 2011-12 held as under: "31. It can be seen from the above that so long as a payment to non-resident entity is in the nature of payment consisting of income chargeable under the head 'Salaries', the assessee does not have any tax withholding applications u/s 195 of the Act. In our considered view, the nature of income embedded in related payments is relevant for deciding whether or not section 195 will come into play. We have also gone through the agreements exhibited at pages 525-530 of the paper book and have also considered Form 16 which are placed on record on page 605 of the paper book. Considering the facts on record, it can be reasonably concluded that the employees seconded to the assessee company are working as the employees of the assessee company, their salary is subject to TDS u/s 192 of the Act and, therefore, provisions of section 195 are not applicable on the facts of the case in hand. 32. In our considered view, the reliance on the decision of the Hon'ble High Court of Delhi in the case of Centrica (supra) by the Assessing Officer is misplaced inasmuch as the seconded employees of AWPS were not taking forward ....