TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 1065
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....h and Chemicals Division (NSC) - NSC division is into Natural Polymers Group ('NPG') and Specialty Polymer Group ('SPG'). It is engaged in the business of surfactants, synthetic specialty polymers and natural polymers, agro chemicals, chemicals used in customer care products, fabric and cleaning. 2.1. With respect to its manufacturing operations in both PBD and NPG & SPG division, assessee bears all associated risks such as market risk, product liability risk, credit risk, contract risk etc. on its own account. Therefore, the assessee operates as a normal manufacturer with all normal risks associated with carrying out such business. 3. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:- 4. We first take up the assessee's appeal in I.T.A. No. 315/Kol/2016. 5. Ground No. 1, is general in nature. 6. Ground No. 2 & 3, are on the issue of Transfer Pricing (TP) adjustments, made towards advertising, marketing and promotion expenses (AMP Expenses). The Transfer Pricing Officer (TPO) held that by incurr....
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..... Respectfully following the same we dismiss the ground of appeal filed by the Revenue. 6.2. The Kolkata 'C' Bench of the Tribunal in the case of Organon India Pvt. Ltd. vs. DCIT in ITA Nos. 633 & 2459/Kol/2017, order dt. 24/10/2018, applied the ratio of decision in the case of Philips India Ltd vs ACIT in ITA No. 2489/Kol/2017 dated 4.4.2018 for Asst Year 2013-14, and came to a conclusion that the AMP expenditure is not an international transaction. 6.3. The argument of the ld. D/R that on facts the assessee is a distributor, is not emanating from the records. The assessee is engaged in manufacturing and supply activities. Thus, the argument of the ld. D/R is rejected on facts. The facts of the assessee's case and the facts in the case of Philips India Ltd. (supra) and Organon India Pvt. Ltd. (supra) are same as all these companies are engaged in manufacturing and sale. 7. In view of the above discussion, AMP Expenses cannot be regarded as an international transaction as per Section 92B of the Act, in the case of the assessee so as to invoke provisions of Section 92 of the Act. As we have held that the that the AMP expenditure in question is not an international transactio....
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....es that, on facts the assessee has not carried out any R&T activities. The expenditure in question is incurred only for its manufacturing operations and local environmental compliance from HSE perspective. The assessee submitted that ICT also does not carry out any research and development activities for development of any new project/technology. It is primarily a captive support centre for the local India operation of the assessee. Thus, we are of the considered opinion that the expenditure on research and training does not constitute any international transactions on facts. We also find that the TPO/AO has not considered this expenditure incurred in the earlier years towards R&T expenses, as international transactions. Thus, in view of the above discussion, we hold that the expenditure incurred on R&T is not an international transaction as per Section 92B of the Act, so as to enable invocation of provision of Section 92 of the Act. Thus, we delete the TP Adjustment made in this regard and allow this ground of the assessee. 9. Ground No. 5, is against the TP Adjustment made with regard to the International Transaction pertaining to "Intra Group Services". This issue has been con....
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....sputes the directions of the DRP to allow this provision as an ascertained liability. The ld. DRP on the ground that the provision was made based on data of past activities and on the ground that the provision was made in a systematic and scientific manner directed the Assessing Officer to allow the same by applying the propositions of law laid down by the Hon'ble Supreme Court in the case of Rotork Controls India (P.) Ltd. v. Commissioner of Income-tax, Chennai [2009] 314 ITR 62 (SC). 16.1. After hearing rival contentions, we find that the DRP has set aside the issue to the Assessing Officer with a direction to delete the additions after verifying the facts submitted by the assessee. The assessee had submitted that it had suo moto disallowed provisions for UP Sales Tax and provision for National Starch and that all the remaining items are prior period items. We do not find any reason for the Assessing Officer to have a grievance against such directions of the DRP, which are in accordance with law. Thus, Ground Nos. 1 & 2 of the revenue are dismissed. 16.1.1. The ld. D/R submitted that the issue that is in dispute is regarding the computation of book profits u/s 115JB of the ....
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....c) to Explanation 1 to Section 115JB. In the result, all the tax appeals are dismissed. 16.3. In any event, we are dealing on facts with prior period items. Hence this argument of the ld. D/R is dismissed as devoid of merit. 17. Ground No. 3, raised by the revenue disputes the deletion of disallowance by the DRP, of normal depreciation of Rs. 1,52,84,916/- and additional depreciation of Rs. 38,21,229/- pertaining to Colour Soluble Machine. 17.1. The company had claimed normal and additional depreciation on colour soluble machines, which were installed at their respective dealer's premises under the category plant and machinery. The Assessing Officer was of the view that the colour soluble machines, do not aid in the process of manufacturing and does not produce any item falling within the definition of the term 'manufacture' as defined in Section 2(29BA) of the Act. He was of the opinion that these machines only work like a mixture machine to change the shade, by way of mixing two finished products i.e., colour and paints. He held that this would not result in change in chemicals and in creating any new item. The Assessing Officer noted that, the colour solution machines....