TaxTMI 
TaxTMI 
2018 (7) TMI 1955
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.... price of the international transactions 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 5....
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....ble DRP for AY 2009-10 and AY 2010-11 4.1 The learned AO / DRP / TPO erred in completely disregarding the directions issued 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....
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....,314 by considering depreciation rate of 15% on the Panna-Mukta Well Cost as per section 32, instead of allowing 100% of the cost under section 42. Ground No. 14: Disallowance of depreciation on global IT & T expenditure 14.1 The learned AO / 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 b....
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.... were benchmarked by the assessee applying Transactional Net Margin Method ('TNMM') as the transaction of receipt of intra group services were closely linked to the main business activity of the assessee of exploration and production of oil and gas. Since the operating margin of the assessee at 32.12% was higher than those of the comparable companies at 25.94%, international 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,....
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....ld. The judicial precedents cited before us also supports the view that the needed test, the benefit test are also required to be viewed from the perspective of a businessperson and not from the perspective of the revenue. Further, no evidences have been led before us by revenue stating that these services are duplicative in nature and also serves only the interest of the shareholder. According to the information supplied 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 N....
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....d to a fixed rate of 6.18% (being Libor USD Swap rate +350 bps) for succeeding five years. The said loan from the AE was an unsecured loan, since the financial position of the assessee did not permit obtaining secured loan on favourable rate of interest from unrelated party, financial institutions or banker. 18. The interest rate was amended in October 2009, when the assessee availed of an additional tranche (under the same loan 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....
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.... 31st of May 2005 between BG. Asia Pacific Plc Ltd and Assessee for unsecured loan facility of US dollar 500 million. According to the terms and conditions of that agreement interest rate was fixed as one month, US $ LIBOR +2% for an and apportioned on an actual 360 basis. The termination date of the agreement was 31st of May 2020. Subsequently on 21/10/2009 There is an amendment made it to the existing loan facility under agreement dated 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 ag....
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.... reasons he proposed an adjustment of Rs. 42,72,64,082/- on account of interest payments. We disagree with this finding of the Ld. Transfer Pricing Officer that there was no reason for the Assessee to increase the interest rate for 2.33% to 6.18%. The Assessee has given detailed rational behind its own decision for shifting from floating rate of interest regime to fixed rate of interest. In a way, it reduces the risk of changes in the interest rates. It is a well settled 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 th....
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....the year, whereas the loan was granted in 2005. For benchmarking the interest transaction it is necessary to consider the factors such as :- i) Prevailing economic situation ii) Time Schedule of drawing down the debt iii) repayment schedule, iv) options of prepayment of the loan, v) term / tenure of loan, vi) tenure and periodicity of interest payments, vii) withholding taxes burden on interest viii) Security offered ix) Credit rating of the group , 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 t....
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....hen decide the issue of adjustment, if any, on merits. Needless to say that Assessee may be given proper opportunity of hearing to demonstrate that payment of interest made by the Assessee to its associated enterprise is at arm's length according to one of the methods supporting it with necessary and credible evidences . In the result ground No. 2 of the appeal of the Assessee is allowed with above direction." 24. Following the decision of the Tribunal in assessee's own case, we deem it proper to restore the issue to the file of the 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 prod....
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....ative. Referring to provisions of section 37, he submitted that the said section provides for deduction of expenditure not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee laid out or expended wholly and exclusively for the purposes of the business. Thus, for expenditure to be allowable u/s 37, the following conditions need to be satisfied :- (i) Expense should be incurred wholly and exclusively for the purposes of the business. (ii) 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....
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.... the time of credit thereof to the account of the payee, whichever is earlier. As per the said section 195, tax is required to be withheld in respect of payments made to a non-resident only if such payment is chargeable to tax in India. In terms of section 90(2) of the Act, provisions of the Act are overridden by the provisions of the DTAA to the extent more beneficial to the non-resident assessee. In the present case, Furgo and Geo are non-residents and entitled to claim benefit under the India-Swiss and India-UK Tax Treaties respectively. In terms of paragraph 1 of Article 7 of the aforesaid treaties, business 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 ....
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....eceding assessment year. It is the submission of the ld. DR that when the assessee was given permission to open branch office for exploration of crude oil/gas as per RBI Guidelines and as per PSC, the assessee cannot conduct any business beyond permission by the RBI especially when the assessee is not a normally resident assessee. 35. We find identical issue had come up before the Tribunal in assessee's own case and the Tribunal at para 55 and 56 has decided the issue in favour of the assessee by observing as under :- "55. From the above chart it is apparent that out of the total expenditure incurred of Rs. 931819021/- 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 op....
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....o not the case of the revenue that details of those expenditure are not available before them or Assessee has furnished incomplete information for its allowability. Further, no judicial precedent was cited before us by revenue, which says that such expenditure are not allowable to the Assessee. Therefore according to us the expenses incurred by the Assessee with respect to i) KG-OS- 02004/1 of Rs. 7 163 8553 ii) MN - DWN - 2002/2 of Rs. 1 0524 1649 iii) KG-DWN-98/4 of Rs. 6 245 0283/- cannot be disallowed. In view of this we direct the Ld. Assessing Officer to delete the disallowance made with respect to about 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 admi....
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....CIT [1992] 196 ITR 845 held that where the setting up does not amount to starting of new business but expansion or extension of the business already being carried on by the Assessee, expenses in connection with such expansion or extension of the business must be held to be deductible as revenue expenses. One has to consider purpose of the expenditure and its object and effect. Accordingly, it was held that expenses pertaining to exploring feasibility of expansion or extension of business are revenue expenditure and not capital expenditure. The expenditure so incurred by the Assessee in the normal course of business of exploration and production 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 ....
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....ound no.10 is concerned, the same relates to disallowance of expenditure of Rs. 39,18,72,912/- incurred on non-producing PSC. 39. Facts of the case, in brief, are that the assessee being a non-resident entity has interest in Panna/Mukta oil and gas fields, Mid and South Tapti oil and gas fields, KG-OSN-2004/1, MN-DWN-2002/2, KG-DWN-1998/4 and KG-DWN2009/1 fields. During the year under consideration, Panna/Mukta and Mid and South Tapti oil and gas fields were producing gas fields. The production in KGOSN-204/1, MN-DWN-2002/2, KG-DWN-1998/4 and KG-DWN-2009/1 oil and gas fields had not commenced during the year under consideration. The assessee claimed exploration 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 dis....
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....e by both the sides and perused the material available on record. We find, following the decision of the Tribunal in assessee's own case in assessment year 2009-10, the Tribunal vide ITA No.6791/Del/2017 order dated 17.07.2018 [to which of us (AM) is a party] has decided the issue in favour of the assessee by observing as under :- "21. AO/DRP have disallowed the expenditure of Rs. 1,96,49,04,712/- incurred by the taxpayer on non-producing block on the ground that the expenditure incurred by the taxpayer in other PSCs prior to commercial production shall be aggregated and claimed only from the year of commercial production. So, the expenses incurred by the taxpayer concerning oil 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....
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....5,233 460,313,788 931,819,021 Remarks Cost pertaining to those shared with JV partners Non-JV cost (primarily time-writing costs and development expenses) 55. From the above chart it is apparent that out of the total expenditure incurred of Rs. 931819021/- 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 expens....
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....he Assessee with respect to i) KG-OS- 02004/1 of Rs.71638553 ii) MN - DWN - 2002/2 of Rs.105241649 iii) KG-DWN-98/4 of Rs.62450283 cannot be disallowed. In view of this we direct the Ld. Assessing Officer to delete the disallowance made with respect to about 3 items." 25. Keeping in view the facts and circumstances of the case wherein the taxpayer has brought on record the complete details of the expenditure incurred and there is no dispute between the parties to the appeal that all the expenses have been incurred for furtherance of its business, though incurred in support to the PSC contracts executed by the taxpayer, the same cannot be disallowed merely on the ground that it is not shared by others, particularly, when it is not disputed 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 ....
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....an expenditure u/s 37, the following conditions need to be satisfied i.e. (i) Expense should be incurred wholly and exclusively for the purpose of the business and (ii) the expense should be revenue in nature. 50. Referring to the decision of the Delhi Bench of the Tribunal in the case of ONGC Videsh Ltd. (supra), he submitted that the assessee 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. 51. Referring to the decision of the Ahmedabad Bench of the Tribunal in the case of ACIT vs. Niko Resources 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 n....
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.... Officer, however, held that the expenditure incurred by BGIL for the activities of the assessee in India were in nature of head office expenditure within the meaning of section 44C and that part of the expenditure which was not approved by the Operator Board of the PSC was outside the purview of section 42(1) of the I.T. Act. Therefore, such expenses incurred by the assessee are held to be in the nature of head office expenditure allowable only to the extent of 5% of the adjusted total income of the assessee. The Assessing Officer, however, did not make any addition since the said expenses had already been disallowed by the TPO. The DRP did not interfere with the action of the Assessing Officer. 56. Aggrieved with such order of the Assessing Officer/TPO/DRP, the assessee is in appeal before 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 ....
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....f Explanation (iv) to section 44C of the Act, HO expenditure is defined as an expenditure incurred by the appellant outside India. The provisions of section 44C of the Act are applicable only in respect of head office expenditure and not expenditure incurred by the affiliate company. Since in the instant case, the aforesaid payment is made to an affiliate company, i.e., BGIL and not to the head office of the appellant situated in Cayman Islands, the provisions of section 44C of the Act would not be applicable. Even otherwise provisions of section 44C of the Act are not applicable since (i) BGIL provides services to various entities of BG Group since the past many years; BGIL's income is assessed to tax in India by the same Assessing Officer who is assessing income of BGEPIL; All information 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....
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.... noted that it is a bit different from the chart annexed by the assessee with its computation of income. He, therefore, asked the assessee to reconcile the above charts. Since the assessee refurnished the same chart that was annexed with the computation of income, the Assessing Officer asked the assessee to reconcile the above two charts and explain the difference. From the reconciliation chart furnished by the assessee, the Assessing Officer noted that there was difference of Rs. 31,26,42,722/-. He observed that in the depreciation chart furnished by the Auditor in 3CD report, the above addition to fixed assets were shown in the head "Panna Mukta PD & PE Gas Lift surface facility" which was eligible for depreciation @ 15%. Where as in the chart annexed by the assessee with its computation of income, 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....
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....r the business purposes. He, however, did not make any addition since the said expenses had already been disallowed by the TPO and the DRP did not interfere with the findings of the Assessing Officer. 69. Ld. counsel for the assessee submitted that identical issue had come before the Tribunal in assessee's own case in the immediately preceding assessment year and the Tribunal has allowed the depreciation. Further, although the assets may not be registered in the name of the assessee, the assessee is entitled to and has been using the same in the capacity of an owner having made due payment to its group company and thus akin to a part owner to the extent payment made by it. The global IT & T projects are being used by the assessee in its day to day business operations and the same are essential for conducting 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, ....
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....ear that the asset is not owned by the assessee either wholly or partly neither any document was submitted to prove that these assets were put to use for the business of the assessee company. Therefore, the depreciation claimed by the assessee on IT infrastructure and software amounting to Rs. 26,79,33,582/- is not allowable. However, since the above amount has already been adjusted by the TPO on the determination of ALP of the above transactions, no separate addition is made on this account to avoid double taxation of the same amount. However, if any alteration or modification takes place in the determination of arm's length price of the above transactions, the above addition on account of excess depreciation would hold good to that extent." 73. It is also an admitted fact that the order of the Tribunal was not 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 issu....
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....822/- was claimed in the profit & loss account and balance was capitalized. Later the assessee furnished detail showing interest accrued during the year - Rs. 170,78,82,718/-. Interest capitalized - Rs. 197,459,895/- balance Rs. 151,04,22,822/- was claimed as deduction. The A.O. has observed that "However, in computation of income, assessee has reduced this capitalization amount to Rs. 4,74,61,411/- without any note from Auditor or without any basis or without submitting any evidence regarding the same". During the DRP proceedings the assessee submitted that out of Rs. 197,459,895/- Rs. 43,529,545/- pertain to loan utilized towards capital work in progress not yet capitalized as on 31.03.2012 and Rs. 93,931,566/- pertain to the assets capitalized during the year. The assessee claimed that the assessee follows an assumption for tax 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 o....
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....he statistical purposes. 81. Ground no.18 relates to short credit of TDS amounting to Rs. 87,48,486/-. 82. After hearing both the sides, we restore the issue to the file of the Assessing Officer with a direction to verify the same and allow the TDS credit as per law. 83. In ground no.19, the assessee has challenged the interest charged u/s 234B of the I.T. Act. 84. Ld. counsel for the assessee submitted that the revenues receivable by the assessee non-resident company are subject to deduction of tax at source. Therefore, the question of payment of advance tax and consequent levy of interest u/s 234B for shortfall in payment of advance tax does not arise. Referring to the decision of the Tribunal in assessee's own case for assessment year 2009-10 in ITA No.2227/Del/2014 and for assessment year 2010-11 in ITA No.1170/Del/2015, he submitted 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 s....