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TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 861
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....n the relevant financial year undertaking contract R&D activities, GIS services and IPO services for the Whirlpool group. For the assessment year 2015-16 they have filed their return of income on 26/11/2015 declaring a total income of Rs. 2,60,80,35,500/-under the normal provisions of the Act and an income of Rs. 3,02,57,76, 948/-under section 115 JB of the Act. 3. During the assessment proceedings, learned Assessing Officer noticed that during the financial year 2014-15 the assessee had entered into international transaction with its Associated Enterprises ("AEs") and the value of such transactions exceed more than 15 crores. Learned Assessing Officer, therefore, referred the determination of the arm'slength price of the international transaction to the Ld. Transfer Pricing Officer (Ld. TPO) under section 92CA of the Income Tax Act, 1961 (for short "the Act"). Ld. TPO, by order dated 31/10/2018 observed that the Assessing Officer shall enhance the income of the assessee by Rs. 1,17,99,480/-on substantive basis, and the protective adjustment of Rs. 67,81,91,285/-was put on hold awaiting judgement of the Hon'ble Supreme Court.Learned Assessing Officer, accordingly, passed the draft....
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.... 381 ITR 154, Hon'ble High Court held that there does not exist any arrangement or undertaking between the assessee and the associated enterprises in connection with incurring of the AMP expenses. He further submitted that such addition of the Hon'ble High Court is followed by the Tribunal in assessee's own case for the assessment years 2009-10 to 2014-15 and facts being similar the issue remains covered by these decisions. 8. Ld. DR does not controvert any of the submissions made on behalf of the assessee nor does he bring to our notice any change of facts and circumstances of the case to say that this consistent view taken by the Hon'ble High Court and the Tribunal is not applicable to the facts of the present year. In view of this settled view taken in assessee's own case right from 2008-09 to 2014-15, facts being identical, while respectfully following the same we hold that the transfer pricing adjustment cannot be sustained and has to be deleted we accordingly allow grounds No. 3 to 3.21. 9. Coming to ground No. 4 to 4.4, it relates to the alternative disallowance on account of expenses incurred for AMP to the tune of Rs. 67,81,91,285/-. Case of the assessee is that for prom....
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....ee incurred R&D expenses to the tune of Rs. 23,75,20,985/- and claimed 200% deduction amounting to Rs. 47,50,41,970/-under section 35(2AB) of the Act. Expenses to the tune of Rs. 8,21,000/-was not approved by the Department of Science And Industrial Research (DSIR) and therefore the Assessing Officer disallowed Rs. 16,42,000/-which constitutes 200% of the disapproved expenses of Rs. 8,21,000/-. According to the assessee, even if the R&D expenditure under section 35(2AB) of the Act at 200% is not accepted, still the same is allowable under section 37(1) of the Act to the tune of actual expenditure of Rs. 8,21, 000/-. 15. He further submitted that for the assessment year 2014-15, while adjudicating upon similar issue, Ld. DRP directed the Assessing Officer to allow the R&D expenditure not eligible for weighted deduction under section 35(2AB) of the Act, as deduction under section 37 of the Act. We do not find anything illegal or irregular in such a course adopted by the Ld. DRP for the assessment year 2014-15 and we deem it just and proper to extend a similar treatment to the case of the assessee for this year also. We therefore direct the Assessing Officer to allow the deduction of....
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....ted by the Ld. DR. We therefore, taking a similar view set aside the issue to the file of thelearned Assessing Officer with a direction to the assessee to produce the relevant information/documents before the Assessing Officer and the Assessing Officer to verify the same and decide the issue afresh. Ground No. 7 is, accordingly, allowed for statistical purpose. 19. In respect of ground No. 8, it is the submission of the Ld. AR that basing on the information contained in the AIR report, learned Assessing Officer made the addition of Rs. 18,640/-holding that the assessee was not able to provide the supporting documents to establish the genuineness of the transaction. Before us the assessee filed an application for admission of additional evidence under rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963 alongwith certain documents in support of their claim stating that there was an error in uploading the data relating to the premium paid by the assessee and instead of the actual premium paid to the tune of Rs. 4, 61, 865/-an amount of Rs. 18,640/- was uploaded in the website of the Income Tax Department as the amount of premium paid by the assessee and now that they have obta....
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....at under section 37(1) of the Act, deduction is admissible for expenditure incurred wholly and exclusively for the purpose of business and such expenditure is justified by business consideration and incurred out of commercial expediency is allowable deduction. He drew our attention to details of this expenditure incorporated at page Nos. 485 to 490 of the paperbook in respect of the beneficiaries of this expense. 23. Insofar as the alliance of this expense in the earlier years is concerned, it is the submission of the Ld. DR that no such material is available with him right now and he further submitted that, be that as it may, the details furnished by the assessee are to be verified with reference to the expenditure so incurred by the assessee in the earlier assessment years. He therefore prays that the matter may be remitted to the file of the learned Assessing Officer for verification of all these details. 24. Considering the request of the Revenue we deem it just and necessary that the allowance of this expenditure in the earlier years needs verification vis a vis the details furnished by the assessee. We therefore set aside the issue to the file of the learned Assessing Offic....