TaxTMI 
TaxTMI 
TaxTMI 
2018 (7) TMI 1955
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....entered into by the assessee with its AE. The TPO vide order dated 29.01.2016 proposed an upward adjustment of Rs. 291,72,84,667/- in respect of the international transactions undertaken by the assessee, the details of which are as under :- S. No. Nature of international transaction TP adjustment u/s 92CA (INR) 1. Intra Group Services 183,94,39,318 2. Interest Payment 107,78,45,349 Total 291,72,84,667 3. The Assessing Officer accordingly in the draft assessment order passed on 28.03.2016 made the above adjustment on account of payment of interest and on account of intra group services. In the said draft assessment order, the Assessing Officer also made the following additions/disallowances :- 1. Disallowance of branch office expenses 51,42,39,383/- 2. Disallowance of non-producing PSCs 39,18,72,912/- 3. Disallowance of exploration expenses written off 68,39,51,972/- 5. Disallowance of excess depreciation/depletion claimed 26,57,46,314/- 6. Disallowance of interest expenses of capital nature 14,99,98,785/- 7. Disallowances of Club expenses 56,12,044/- 4. The Assessing Officer accordingly determined the total inco....
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.... by the Hon'ble DRP in the case of the Appellant for the prior year's i.e. AY 2009-10 and AY 2010-11 even though the facts and circumstances of its case and the business model of the Appellant has continued to remain the same. Ground No.5: Erroneously questioning of commercial expediency of the Appellant 5.1 The learned AO / DRP / TPO erred in law and on facts by questioning the commercial expediency of the Appellant in availing the intra-group services from its associated enterprise ("AE") and in changing from floating interest rate to fixed interest rate on the External Commercial Borrowing taken from its AE. Ground No.6: Erroneous application of CUP for determining arm's length interest rate 6.1 The learned AO / DRP / TPO erred in making an upward adjustment of Rs. 1,07,78,45,349 to the total income of the Appellant by erroneously applying CUP Method for determination of arm's length interest rate on the external commercial borrowing ("ECB") taken from its AE. Ground No.7: Erroneous disallowance of payment made towards intra-group services by Appellant to its AE 7.1 The learned AO / DRP / TPO grossly erred in law and on facts by making an upward tr....
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....DRP erred in law and in facts in disallowing depreciation of Rs. 26,79,33,582 on global IT & T expenditure. 14.2 Without prejudice, the learned DRP erred in not treating the global IT & T expenditure as revenue expenditure allowable under section 37(1) of the Act. Ground No. 15: Disallowance of interest 15.1 The learned AO / DRP erred in law and in facts in disallowing interest of Rs. 14,99,98,785 claimed by the Appellant. Ground No. 16: Non-grant of additional depreciation 16.1 The learned AO / DRP erred in not granting additional depreciation of Rs. 4,32,25,478 under section 32(1)(iia) of the Act on the new plant and machinery of Rs. 21,05,13,315 purchased and put to use by the Appellant during the year. Ground No.17: Violation of principles of natural justice 17.1 The learned AO / DRP erred in law and in facts, in ignoring the submissions and the information furnished by the Appellant during the assessment proceedings. Ground No. 18: Short credit for Tax deducted at source 18.1 The learned AO erred in not granting credit of tax deducted at source to the extent of Rs. 87,48,486. Ground No. 19: Levy of interest under sections 234B and 234C of the Act ....
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....ternational transaction of receipt of intra-group services was considered to be at arm's length. The TPO, however, determined the arm's length price of international transaction of receipt of services at 782,898,800 applying the CUP method holding that the expenditure incurred by the assessee and allowed by the JV partners/Operator board shall be considered as Comparable Uncontrolled Price. The TPO accordingly made an adjustment on account of international transaction of receipt of intra group services to the extent of amount not shared by JV partners Accordingly, the TPO made an adjustment amounting to Rs. 183,94,39,318/- as under :- S.No. Description of intra group service Value of International Transaction Amount shared by Join Venture (JV) Total Adjustment I Payroll expenses 255,563,180 107,381,829 148,181,351 II Management Service Unit Charges 1,014,795,742 0 1,015,132,296 III IM Recharge and Time writing charges 74,397,367 7,086,287 67,310,540 IV Joint acquisition development of IT Infrastructure and software 804,936,227 0 267,933,582 (amount claimed as depreciation corresponding to 804,936,227) V Reimbursement of expe....
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....lied by the assessee and examined by the Ld. dispute resolution panel does not give any such indication. Further regarding nonsharing of the cost by the joint-venture partners we have given our findings while deciding the appeal of the assessee that such an action of the joint-venture partners cannot be the reason to determine the arm's length price of the services which is been received by the assessee at nil. In view of this we uphold the finding of the Ld. dispute resolution panel holding that transactions of intragroup services are interlinked, therefore, they should be benchmarked together by adopting TNMM as the most appropriate method, hence, directing the Ld. transfer pricing officer to delete the adjustment proposed of Rs. 3 329766244/-. In the result ground No. 1 to 3 of the appeal of the revenue are dismissed." 14. We find, following the above decision the Tribunal vide ITA No.6791/Del/2017 order dated 17.07.2018 has restored the issue to the file of the DRP with a direction to decide the issue afresh by observing as under :- "14. So, following the decision rendered by the coordinate Bench of the Tribunal in taxpayer's own case for AY 2010-11 (supra), we deem it nec....
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....oan agreement) from its AE to meet its working capital requirement. As there were significant variations in the global interest rates sine 2005 (i.e. when the loan was initially extended and the original agreement was signed) through 2009, the AE and the assessee agreed for an interest rate revision in 2009 from LIBOR +200 bps to LIBOR + 350 bps based on Barclay banks quotation after assessing appellant's risks and market conditions prevailing at that time. Further, as the appellant expected volatile interest rates in future and hence believed that there should be stability in the interest rate to be paid at least for the next five year period. 19. Accordingly, the assessee decided to migrate from a floating interest rate to fixed rate of interest for the next five years. Therefore the LIBOR + 350 bps was converted to a fixed rate of interest @ 6.18% (being USD Libor swap rate + 350 bps). Therefore, for the relevant year under consideration i.e. FY 2010-11, the Appellant paid an effective interest of 6.18 percent for the year. It was further submitted that the interest rate paid by the appellant was in line with the rates quoted, by independent enterprises (Citi Bank, HSBC Ba....
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....31/05/2005, according to which, the parties have agreed to amend the interest rate terms applicable to the existing loan facility at the fixed rate of 6.18% for 5 years from the date of execution of this agreement (i.e. from 21/10/2009), it would be once again at available rate of 6 months USD LIBOR +350 unless the parties agree otherwise. On conjoint readings of this 2 agreements it is apparent that during the year there is a change in the interest rate of the above loan, which was earlier at US dollar LIBOR +2% to 6.18%. For part of the year i.e. from 01/04/2009 2 21/10/2009, the rate of interest on the above loan was 2.33% and from 22/10/2009 to 31/03/2010 the rate of interest of the same loan without any change in the terms and condition of agreement except interest was @ 6.18%. Further, Vide letter dated 21/10/2009 the AE has agreed to offer an additional unsecured loan of US dollars 300 million until 2020 to the appellant wherein terms of clause 1 and 3 of the terms and conditions are as under:- "1 Definition :- " interest" means the interest or advance at the fixed rate of 6.18% (being the 5 years, US Libor swept rate +350 ) for a period of 1st 5 years from the date of....
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....ed proposition of law that The Ld. Transfer Pricing Officer is not supposed to question the business decision of the Assessee. The Assessee has given ample reasons for its business decision even stating that most of the reported loans in that particular period were having a clause of fixed rate of interest. Therefore, the decision of the appellant to shift from floating rate to fixed rate of interest was based on commercial consideration and to protect the business operation of the appellant from any adverse movement in floating interest rates and that only businessmen can decide. It may sound illogical to the Ld. Transfer Pricing Officer, but it is beyond his authority to question the wisdom of Assessee. It is not the prerogative of revenue to direct Assessee to conduct its business in a particular manner. It is also not proper to ask and Assessee to conduct its business in a manner which is understood by the revenue , despite heavy business risk, and further in a manner that will lead to higher revenue to the coffers of the tax gatherers. Various decisions relied upon by the Ld. Authorised Representative also support the above view expressed by us. According to the provisions of ....
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....up , AE and Payer entity x) risk of currency xi) Possibility and terms and condition of convertibility of Debt to equity. The Ld. Transfer Pricing Officer must have looked the agreement dated 31st of May 2005. According to clause No. 7, the interest is required to be paid on the interest payment date, which is 31st May each year, , the taxes on interest, shall be on the account of the borrower according to clause 9 of the agreement. Further, according to clause 5 of the agreement the cancellation of the facility is at the sole discretion of the lender, therefore there was no right of prepayment with the Assessee. With respect to the 2nd transaction of loan of US dollar 300 million there are also the clauses of repayment and prepayment in clause No. 4, there is also an agreement vide clause No. 3 of rewriting the interest rate for a period of 5 years, the amount of repayment on prepayment shall be of at least 100000 US$ , there is no reference of the currency in which the amount is required to be repaid. On the reading of agreement dated 21st of October 2009 and 31st of May 2005, it is apparent that there are certain different terms and conditions in both the agreemen....
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....e Assessing Officer/TPO to decide the issue afresh in the light of the direction of the Tribunal in assessee's own case in the immediately preceding assessment year. The grounds no.2 to 8 raised by the assessee on this issue are accordingly allowed for statistical purposes. 25. So far as ground no.9 is concerned, the same relates to disallowance of branch office expenditure of Rs. 51,42,39,383/- by treating the same as preoperative expenditure. 26. Facts of the case, in brief, are that the assessee has established a branch office in India to undertake other functions necessary for sustenance of its business of prospecting for exploration and production of crude oil and natural gas in India such as identifying opportunities for exploration, acquiring seismic data and undertaking feasibility studies, based thereon determining the contracts/opportunities for which bids should be made, participating in bids, etc. and other corporate functions such as HR, legal, accounts and finance, IT, etc. During the year under consideration, the assessee had incurred exploration and business development cost of Rs. 514,239,383/-. The Assessing Officer proposed to disallow the said expenses by al....
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....i) The expense should be revenue in nature. 28. Referring to the decision in the case of ONGC Videsh Ltd. vs. DCIT reported in 37 SOT 97, he submitted that the assessee in that case was engaged in business of exploration and production of hydrocarbons incurred expenditure on purchase and evaluation of seismic data of foreign blocks. It was held that expenditure so incurred was for furtherance of activities undertaken by it in normal course of business and, therefore, same was to be allowed as business expenditure. 29. He also relied on the following decisions :- (i) CIT vs. Vardhman Spinning and General Mills, 176 Taxm 157 (P&H). (ii) Indo Rama Synthetics Ltd., 333 ITR 18 (Del.). (iii) Jay Engineering Works Ltd., [2008] 166 taxman 115 (Del.). (iv) CIT vs. Priya Village Roadshows Ltd., 332 ITR 594 (Del.). (v) CIT vs. Euro India Ltd., [2014] 223 Taxman 97 (Del.). (vi) Hindustan Aluminium Corporation Ltd. vs. CIT, 159 ITR 673 (Cal.). (vii) Asiatic Oxygen Ltd. vs. CIT (Cal.). (viii) CIT vs. Graphite India Ltd., 221 ITR 420 (Cal.). (ix) Binani Cement Ltd. vs. CIT, 227 CTR 49 (Cal.). (x) DCIT vs. Gujarat Narmada Valley Fertilizers Co. Ltd., 57 taxmann.co....
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.... profits arising to a non-resident enterprise shall be taxable in India, only if such enterprise has a PE in India. In other words, in absence of PE in India, no part of the business profits arising to such enterprise would be taxable in India. In the instant case, since Fugro and Geo do not have any PE in India, therefore business profits earned by the said companies from sale of seismic data to the assessee would not be liable to tax in India in terms of Article 7 read with Article 5 of the respective DTAA and hence the assessee was not required to deduct tax at source on the payments to be made to the said parties. He accordingly submitted that the addition made by the Assessing Officer should be deleted. 32. Ld. DR on the other hand heavily relied on the order of the Assessing Officer/TPO/DRP. He submitted that the assessee was given permission to open branch office for exploration of crude oil and gas as per RBI Guidelines and as per PSC. The assessee cannot conduct any business beyond permission granted by the RBI since the assessee is not a normal resident assessee. Therefore, the decision of the ITAT in assessee's own case is not applicable to the facts of the present cas....
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....1819021/- the Ld. Assessing Officer has allowed the expenditure of Rs. 471505233/- which is the cost of respective PSC and shared with JV partners. The balance cost which is not shared by the JV partners amounting to Rs. 460313788/- was disallowed for the reason that these cost have not been shared by the JV partners and therefore it is not incurred for the purposes of the business of the Assessee and hence disallowable. Further sum of Rs. 220983295/- included in the disallowance of Rs. 460313788/- was pertaining to the purchase of seismic data for exploring new opportunities in the business of the company under the pretext that these are with respect to the future businesses which has not yet commenced. Therefore, primary the disallowances of Rs. 460313788/- includes a sum of Rs. 22098 3295/- for purchase of seismic data and balance amount primarily with respect to time writing cost and development expenses. The time writing charges as it is explained by the Assessee are for the purpose of drilling and subsurface inputs, analysis and administrative expenses with respect to executive, finance, human resources, legal, commercial, etc the detailed breakup of these time writing charge....
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....out 3 items. 56. Now coming to the claim of the deduction of expenditure of Rs. 22098 3295/- on account of purchase of seismic data and general and administrative expenses in connection with the proposed NELP VIII, It is submitted by the Assessee that these were the expenses incurred by the Assessee with respect to the offers which were invited for the 8th offer of blocks for national exploration licensing policy for which the Assessee has to purchase the data for the bidding purposes. The other expenses which are the necessary general and administrative expenses were incurred for project management, consultancy services, etc and also staff cost and project management expenses were incurred. These expenses were disallowed by Ld. Assessing Officer holding that these are expenses for the future projects of the Assessee for which even the PSC is not executed. The Ld. Authorised Representative has submitted that this issue of allowability of this expenditure is covered in its favour by the decision of ONGC Videsh Ltd versus DCIT [37 SOT 97] wherein it has been held as under:- "15. With regard to disallowing claim of expenses of Rs. 43.85 lakhs incurred for purchase and evaluation....
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....of oil, being revenue in nature, is liable to be allowed as a deduction. Similar claim was also made by the Assessee in the earlier year. We, therefore, direct the Assessing Officer to allow the same as revenue expenditure. As we have allowed ground Nos. 3 to 3.2, the alternate ground No. 3.3 as taken by the Assessee become infructuous." [Extracted Taxmann.com][underline supplied by us] Neither the Ld. Assessing Officer nor the Ld. Departmental Representative could press any other judicial precedent which shows that amount spent by the assessing is not allowable as revenue expenditure under section 37 (1) of the act. It is also not the argument of the revenue that such expenditure incurred by the Assessee is capital in nature. Furthermore, the Ld. AR has also pressed into several decisions which say that that expenses incurred towards extension of business which was subsequently abandon or did not fructify, are allowable. Therefore in view of the above decisions wherein it is been held that the expenses for purchase of this kind of data is unnecessary revenue expenditure required to be incurred by the Assessee for the purpose of its business and hence is allowable as revenue e....
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....on expenditure incurred on non-producing block of Rs. 39,18,72,912/- in terms of section 42(1) read with Production Sharing Contract of Panna/ Mukta and Mid and South Tapti gas fields. The break-up of the expenditure incurred on non-producing blocks are as under :- Block Amount (Rs.) KG-DWN-2009/1 4,157,641 KG-DWN-98/4 18,499,277 KG-OSN-2004/1 322,917,779 MN-DWN-2002/2 46,298,214 Total 391,872,912 40. During the course of the assessment proceedings, the Assessing Officer proposed to disallow the aforesaid expense of Rs. 39,18,72,912/- by alleging that as per clause 17.2.3 and 17.2.4 of PSC in respect of Block KG-DWN-2009/1, the expenditure incurred by BGEPIL in other PSCs prior to commercial production shall be aggregated and claimed only from the year of commercial production. Therefore, expenses incurred by the assessee in respect of those oil blocks where commercial production has not yet commenced has to be amortized and carried over and can be set off only when revenue is earned from such oil blocks after commencement of commercial production. 41. The Assessing Officer further held that section 42 is a complete code in itself which allows the assessee....
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.... blocks where commercial productions has not yet started has to be amortized and carried over and can be set off only when revenue is earned from such oil blocks after commencement of commercial production. The AO also invoked section 42 of the Act to disallow the expenses. 22. The taxpayer has come up with detail of expenditure incurred on nonproducing blocks which is as under :- Block Amount (Rs.) KG-OSN - 2004/1 1,08,03,21,692 MN-DWN-2002/2 58,53,00,833 Total 1,66,56,22,525 23. The ld. AR for the taxpayer contended that section 42 is not applicable as it allows benefit/deduction to the eligible taxpayer in addition to the allowance permissible under the Act and as such, these deductions are allowable u/s 37(1) of the Act and relied upon decision rendered by the coordinate Bench of the Tribunal in a case cited as ONGC Videsh Ltd. vs. DCIT - 37 SOT 97. 24. The ld. AR for the taxpayer has also contended that this issue has also been decided in favour of the taxpayer in its own case for AY 2010-11. For ready perusal, operative part of the order is extracted as under :- "54. Section 42(1) makes it clear that for the purpose of computing the profits and gai....
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....e of Rs. 460313788/- was pertaining to the purchase of seismic data for exploring new opportunities in the business of the company under the pretext that these are with respect to the future businesses which has not yet commenced. Therefore, primary the disallowances of Rs. 460313788/- includes a sum of Rs. 22098 3295/- for purchase of seismic data and balance amount primarily with respect to time writing cost and development expenses. The time writing charges as it is explained by the Assessee are for the purpose of drilling and subsurface inputs, analysis and administrative expenses with respect to executive, finance, human resources, legal, commercial, etc the detailed breakup of these time writing charges for each of the PSC contract were explained by the Assessee by giving breakup of their cost as well as nature of those expenditure. Assessee explained that as it needs to safeguard its interest in the blocks it has employed technical experts for which time writing charges are incurred. Further, for the support functions. It also hires several other persons and necessarily has to incur other expenditure with respect to its finance and accounting activities, its human resource a....
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....that these expenses have been incurred wholly and exclusively for the purpose of business of taxpayer. 26. Moreover, the AO has not disputed the incurrence of expenses for the purpose of business. Even otherwise, the expenses incurred by the taxpayer for furtherance of its business cannot be disallowed merely on the ground that the other party in the joint venture has not agreed to share the particular cost incurred by one party to the joint venture. So, following the decision rendered by the coordinate Bench of the Tribunal in taxpayer's own case for AY 2010-11 (supra), the disallowance made by the AO/DRP is not sustainable in the eyes of law, hence disallowance is ordered to be deleted and ground no.12 is determined in favour of the taxpayer." 45.1 Respectfully following the same, the grounds raised by the assessee on this issue are allowed. 46. In ground no.11, the assessee has challenged the order of the ld. CIT(A) in sustaining the disallowance of exploration expenses written off amounting to Rs. 68,39,51,972/-. 47. Facts of the case, in brief, are that the assessee in its audited Profit & Loss Account had claimed an amount of Rs. 71,72,23,583/- as exploration expense....
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.... Ltd. reported in 123 TTJ 310, he submitted that the Tribunal in the said case after disallowing deduction claimed by the assessee for certain expenses u/s 42 allowed the same under the regular provisions of the I.T. Act. He further submitted that identical issue had come up before the Tribunal in assessee's own case in the immediately preceding assessment year which is similar to ground of appeal no.9 and 10. He accordingly submitted that the disallowance of exploration expenses written off amounting to Rs. 68,39,51,972/- made by the Assessing Officer being bad in law is liable to be deleted. 52. The ld. DR on the other hand heavily relied on the order of the Assessing Officer/DRP. Reiterating his arguments as made while arguing ground appeal no.9 he submitted that since the expenditure has been incurred beyond the RBI permission, therefore, it is not an allowable expenditure u/s 37 of the I.T. Act. 53. After hearing both the sides, we find the issue involved in the above grounds are identical to the issue as per ground of appeal no.9. We have already decided the issue and the ground has been allowed in the preceding paragraph. Following similar reasoning, this ground by the a....
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....re the Tribunal. 57. Ld. counsel for the assessee at the outside submitted that identical issue had come before the Tribunal in assessee's own case in the immediately preceding assessment year wherein the Tribunal held that the cost of services availed by the assessee from its group company cannot be disallowed in the hands of the assessee merely because the said expenses has not been borne by the JV partners. He accordingly submitted that since the expenditure have been incurred by the assessee wholly and exclusively for the purpose of its business of prospecting for, exploration and production of crude oil and natural gas, therefore, the disallowance made by the Assessing Officer being bad in law is liable to be deleted. 58. Without prejudice to the above, the ld. counsel for the assessee drew the attention of the Bench to the provisions of section 44C and Circular No.202 dated 05th July, 1976 issued by the CBDT and various other decisions, he submitted that the assessee in the instant case is incorporated in Cayman Islands and is operating in India through Project office established with the prior approval of RBI for the purpose of conducting its business activities. In othe....
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.... pertaining to the transactions of BGIL in India is available with the Revenue authorities and hence there is no difficulty in scrutinizing and verifying the claims of the appellant; (ii) The payment to BGIL is on cost to cost basis and no profit element is involved therein. In other words, the same is mere reimbursement of expenses incurred by BGIL and (iii) the expenditure has been incurred by the appellant for availing specialized services for carrying out its technical business operations in relation to prospecting, exploring and production of oil-and gas and the expenses, (iv) payment made for specific services for- which necessary manpower/experience is not available with the appellant; and are not in nature of executive and general administration expenses. 59. The ld. DR on the other hand strongly supported the order of the Assessing Officer/DRP. He submitted that the provisions of section 44C does not spell out what construed head office expenses, therefore, specific services will include head office expenses. Reiterating his arguments as made while arguing in ground no.9, he submitted that the order of the Assessing Officer/DRP should be upheld. 60. We have considered ....
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....e, the same has been shown as addition to fixed assets in the head "Panna Well Cost" which is eligible for 100% depreciation. Thus, the assessee has claimed 85% more depreciation/depletion on the above amount in the computation of income. Since no documentary evidence was produced by the assessee in shape of bills, vouchers, invoices etc., the Assessing Officer made disallowance of Rs. 26,57,46,314/-. While doing so, he further alleged that the assessee could not find fault with the finding of the Auditors and make its own claim regarding the proper head of expenditure. 63. The DRP remitted the issue to the Assessing Officer directing him to verify the claim of the assessee after scrutinizing the bills, vouchers, invoices, etc. However, the Assessing Officer in the order passed on 23.02.2017 upheld the disallowance of Rs. 26,57,46,314/- proposed in the draft assessment order. 64. Ld. counsel for the assessee at the outset submitted that pursuant to the directions issued by the DRP, the Assessing Officer while passing the final assessment order dated 23.02.2017 did not grant an opportunity to the assessee to furnish the invoices, bills, etc. and passed the impugned order in gros....
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....ucting the business operations. The same results in operations being undertaken in an efficient manner. Considering the large scale at which the assessee operates, the global IT & T projects play a vital role in updating the operations and saving both time and energy of the employees. Hence, there could be no doubt as to whether these have been put to use by the assessee. Further, ownership need not only be denoted by physical control but also includes intangible rights in the asset. Further, it is not possible to document every record of benefits derived from the use of IT assets. The qualitative aspects and benefits of the IT infrastructure procured are very high and carry a significant element of being non-figurative. However, the global IT & T cost had been incurred centrally and infrastructure implemented after due deliberations and discussions with the appellant. Further, the cost has been allocated to the appellant based on a detailed cost allocation methodology. Hence, the disallowance in respect of deduction should be deleted. 70. Without prejudice to the above, if it is considered that the appellant is not eligible to deduction on account of not being the registered own....
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.... available before the Assessing Officer/DRP. Since the assessee in the instant case has not filed the documentary evidences before the Assessing Officer substantiating that the assets were put to use for the business of the assessee, therefore, we in the interest of justice deem it proper to restore the issue to the file of the Assessing Officer/TPO to adjudicate the issue afresh after giving due opportunity of being heard to the assessee. While doing so, the Assessing Officer/TPO shall keep in mind the order of the Tribunal in assessee's own case in the immediately preceding assessment year. The ground raised by the assessee on this issue is allowed for statistical purposes. 74. In ground no.15, the assessee has challenged the disallowance of interest expenses of Rs. 14,99,98,785/- as capital in nature. 75. Facts of the case, in brief, are that the Assessing Officer during the course of assessment proceedings observed that the assessee has claimed an amount of Rs. 151,11,93,163/- as payment of interest to BG Asia pacific Pte Ltd., a group entity of the assessee. This amount has been added back in the computation of income and an amount of Rs. 166,04,21,607/- has been claimed a....
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....x purposes which are different from accounting. The assessee has been following this method of accenting regularly. The A.O. did not give it an opportunity to explain the accounting method. In view of this the A.O. is directed to go through the submissions of the assessee and to allow the interest as per the law." 77. Aggrieved with such order of the Assessing Officer/DRP, the assessee is in appeal before the Tribunal. 78. After hearing both the sides and in view of the agreement made by both the sides, we are of the opinion that this issue should be restored to the file of the Assessing Officer for proper verification. We therefore restore the issue to the file of the Assessing Officer/TPO with a direction to verify the details and adjudicate the issue afresh after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground raised by the assessee is accordingly allowed for statistical purposes. 79. In ground no.16, the assessee has challenged the order of the Assessing Officer in not granting additional depreciation of Rs. 4,32,25,478/- u/s 32(1)(iia) on the new plant and machinery of Rs. 21,05,13,315/- purchased and put to use during....
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....mitted that the Tribunal in the said decision has directed the Assessing Officer not to charge interest u/s 234B on the income of the assessee which is liable to tax deduction at source. He accordingly submitted that the ground raised by the assessee should be allowed. 85. Ld. DR on the other hand supported the order of the ld. CIT(A) and submitted that section 234B is mandatory and consequential in nature. 86. After hearing both the sides, we find identical issue had come up before the Tribunal in the immediately preceding assessment year. We find the Tribunal at para 61 and 62 of the order has observed as under :- "61. We have carefully considered the rival contentions and also perused the relevant judicial precedents cited before us. In the decision cited by the Ld. Authorised Representative in case of CIT versus GE packaged power incorporation (373 ITR 65) in Para No. 19, the Hon'ble high court has considered the decision cited by the Ld. Departmental Representative as under:- xxxxx 62. We are aware that Hon'ble Supreme Court has granted SLP against High Court's ruling that where Assessee was non-resident company, entire tax was to be deducted at source o....