TaxTMI 
TaxTMI 
2019 (4) TMI 1761
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....lowance u/s. 14A of the Income-tax Act, 1961 was called for and the stand taken by the Assessing Officer/the Dispute Resolution Panel in this connection is misconceived, incorrect, erroneous and illegal. 1:3 The Appel lant submi ts that the Assessing Of f icer be di rec ted to delete the disal lowance u/s. 14A made by him and to re-compute i ts total income and tax thereon accordingly. 1:4 Without prejudice to the foregoing and in the alternative, the Appellant submi ts that in case it be held that a disallowance u/s. 14A is warranted then the disallowance should be restricted to Rs. 1,22,050/- suo-moto made by the Appellant. 2:0 Re.: Computation of deduction u/s. 10AA of the Income-tax Act, 1961: 2:1 The Assessing Of f icer/the Dispute Resolut ion Panel has er red in comput ing the deduction u/s. 10AA by setting off the losses of STP/ non-STP units by erroneously relying upon the CBDT Circular dated 16 July 2013. 2:2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject it is entitled to a deduction u/s. 10AA for each of its qualifying undertakings as claimed in its return of income and the stand taken b....
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....s of its case and the law prevail ing on the subject no disallowance u/s. 14A of the Income-tax Act, 1961 was cal led for and the stand taken by the Assessing Of f icer/the Dispute Resolution Panel in this connection is misconceived, incorrect, erroneous and illegal. 5:3 The Appel lant submi ts that the Assessing Of f icer be di rec ted to delete the disallowance u/s. 14A made to the 'Book Prof its' and to re-compute its total income and tax thereon accordingly. C. Re.: Transfer Pricing Grounds: 6:0 Re.: General Ground: 6:1 On the facts and circumstances of the case, the learned Transfer Pricing Of f icer ('TPO') and the learned Assessing Officer ('AO') under the directions of the Hon'ble Dispute Resolution Panel ('DRP') erred in levying adjustment of Rs. 5,34,18,750/- on account of Guarantee Commission to the Appel lant's total income based on the provisions of Chapter X of the Income-tax Act, 1961 ('the Act'). 6:2 The learned TPO/AO have erred in fact and in law in not providing any reasons to show that the conditions mentioned in clauses (a) to (d) of Section 92C(3) of the Act were satisfied before making an adjustment to the i....
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....ged by the Appellant as against the 1.25% show- caused by him in the order sheet noting dated 25 January 2016. 7:8 On facts and circumstances of the case and in law, the learned TPO/AO erred and the Hon'ble DRP further erred in conf irming the adjustment without considering the economic and commercial benefit accruing to the Indian entity for determination of arm's length price. 7:9 On the facts and circumstances of the case and in law, the learned TPO/AO erred and the Hon'ble DRP further erred in disregarding the fact that the provision of guarantee is a shareholders activity by the Appellant with a view to protect the interest of the parent company. Despite this fact the Appellant has charged commission at the rate of 0.50% and therefore the same should be considered to be at Arm's length from Indian transfer pricing perspective. 8:0 Re.: Penalty Proceedings under section 271(1)(c) of the Act: 8:1 On the facts and in the circumstances of the case, the AO has legal ly erred in initiating penalty proceedings under section 271(1)(c) of the Act. 9:0 Re.: General: 9:1 The Appellant craves leave to add, alter, amend, substitute and/or modify in any man....
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..... A.R relied on the recent orders of the Hon‟ble Supreme Court in the case of CIT (Central)-1 Vs. Chettinad Logistics (P) Ltd. (2018) 257 taxman 2 (SC) and PCIT-18 Vs. M/s Oil Industry Development Board. [SLP (Civil) Diary No. 2755/2019] (arising out of impugned final judgment and order dated 16.02.2018 in ITA No. 197/2018 passed by the High Court of Delhi), dated 08.02.2019. The ld. A.R drawing support from the aforesaid judicial pronouncements submitted that it has been held by the Hon‟ble Apex Court that Sec.14A cannot be invoked where no exempt income was earned by the assessee in the relevant assessment year. It was submitted by the ld. A.R that as the assessee had not earned any exempt income during the year under consideration viz. A.Y. 2012-13, thus no disallowance under Sec.14A was called for in its hands. Insofar the part disallowance of deduction under Sec. 10AA by the A.O was concerned, it was averred by the ld. A.R that the issue was squarely covered by the judgment of the Hon‟ble Supreme Court in the case of CIT vs. Yokogama India Ltd. (2017) 391 ITR 274 (SC). It was submitted by him that in the said order it was held by the Hon‟ble Apex Court ....
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....return of income filed pursuant to signing of the APA, hence the ground of appeal No. 6 would be rendered as infructuous. 5. Per contra, the ld. Departmental Representative (for short "D.R‟) relied on the orders of the lower authorities. 6. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material as well as judgments placed on our record. We find that the A.O had worked the disallowance under Sec.14A r.w. Rule 8D at Rs. 21,73,951/-, as against the disallowance of Rs. 1,22,050/- that was suo motto offered by the assessee in its return of income. Resultantly, the A.O had made an addition of Rs. 20,51,901/- under Sec.14A r.w. Rule 8D to the returned income of the assessee. Admittedly, the assessee during the year under consideration had not earned any exempt income. The said fact is discernible from the submission that was filed by the assessee vide its letter dated 11.03.2016 with the A.O during the course of the assessment proceedings, which we find has not been controverted by the revenue. We find substantial force in the contention advanced by the ld. A.R that in case no exempt income is earned by the....
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....e Short Term Capital Gain (for short "STCG‟) of Rs. 9,42,03,318/-, while for the balance loss of Rs. 6,19,82,738/- was carried forward to the subsequent assessment year. The A.O after deliberating on the claim of deduction raised by the assessee under Sec.10AA held a conviction that the same was to be allowed after aggregating the income and loss of various units, irrespective of the fact as to whether the same were eligible or not for the deduction under the other heads. As a result thereof, the A.O backed by his aforesaid conviction quantified the assesses entitlement towards deduction under Sec.10AA, as under: Business income before deduction U/s 10AA (as per computation) Rs. 32,52,00,938/- Short term capital gain Rs. 9,42,03,318/- Total income considered for Sec.10AA Rs. 41,94,04,256/- Deduction u/s. 10AA out of total claim of Rs. 48,13,86,995/- which is allowed to the extent of income available. Rs. 41,94,04,256/- In the result, the excess disallowance claimed by the assessee under Sec.10AA amounting to Rs. 6,19,82,739/- [Rs. 48,13,86,995/- (-) Rs. 41,94,04,256/-] was disallowed by the A.O and added back to the total income of the assessee. 8. ....
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....the assesses claim of deduction under Sec.10AA by wrongly aggregating the income and loss of various units while quantifying its entitlement towards deduction under Sec.10AA of the I.T Act. In terms of our aforesaid observations, we vacate the disallowance under Sec.10AA of Rs. 6,19,82,739/- made by the A.O. The Ground of appeal No. 2 is allowed. 9. Insofar the claim of the assessee that the A.O had erred in not granting the full credit of tax deducted at source as was claimed by the assessee in its return of income is concerned, we find that the assessee is stated to have also filed a rectification application dated 14.02.2017 with the A.O, requesting him to rectify the error apparent on record as regards allowing of short credit of TDS. We are of the considered view that the said claim of the assessee as regards the failure on the part of the A.O to allow credit of TDS of Rs. 21,13,229/- would require verification on facts. Be that as it may, in all fairness we direct the A.O to look into the said claim of the assessee, and in case if the same is found to be in order, then allow the credit for the deficit amount TDS. We thus in terms of our aforesaid observations restore the is....