AI Drafter 
TaxTMI 
TaxTMI 
2020 (3) TMI 388
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....epresentative for the assessee. Thus, with the consent of both sides, this appeal of the assessee for assessment year 2008-09 is taken up for adjudication. 3. The ld. Authorized Representative for the assessee explaining the facts of the case submitted, that the assessee company is engaged in the business of installation, assembling and maintenance of Lifts and Escalators. The assessee entered into international transaction with its AEs during the period relevant to the assessment year under appeal. The assessee applied Transaction Net Margin Method(TNMM) as the most appropriate method to benchmark its international transactions, which is not disputed by the Revenue. The assessee selected OP/Sales as its PLI and has computed the same at 7.10%. The assessee selected four companies as its comparables i.e.:- S.No. Company Name Operating Profit Margin (OP/Sales) 1 High Quality Steel Ltd. 3.06% 2 S S S Electrical (India) Ltd. 3.47% 3 Voltas Ltd. 8.45% 4 Alfa Laval (India) Ltd. - Process Technology 21.52% Mean 9.63% The TPO accepted three comparables out of four. The TPO rejected S.S.S. Electricals (India) Ltd. on the gro....
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....the impugned assessment year, the onus was on the Department to prove that assessee had business transaction with the said entities during the impugned assessment year. The assessee cannot be burdened to prove negative. In support of his contentions, the ld. Authorized Representative for the assessee placed reliance on the following decisions:- ( 1) A.F.Ferguson & Co. Vs. JCIT, ITA No.5037/Mum/2012(Mum-Trib) (2) Shri S.Ganesh vs. ACIT, ITA No.527/Mum/2010(Mum-Trib) (3) Arati Raman vs. DCIT, ITA No.245/Bang/2012(Bang-Trib) 3.3 In respect of ground No.3 to ground No.5 of the appeal, the ld. Authorized Representative for the assessee submitted that the authorities below have failed to allow deduction in respect of provision for bad and doubtful debts amount Rs. 1,40,22,384/- while computing book profit under section 115JB of the Act. The ld. Authorized Representative for the assessee submitted that the assessee in the P&L Account has debited the provision for doubtful debts aggregating to Rs. 1,40,22,384/- and has added back the same in sundry debtors. The assessee has given accounting treatment to the provisions for bad and doubtful debts in accordance w....
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....irly admitted that the claim was made for the first time before the Assessing Officer during assessment proceedings. The Assessing Officer may not have jurisdiction to entertain fresh claim i.e. claim not made in the return of income, however, the appellate authorities are not precluded to entertain the claim made by the assessee during the assessment proceedings. The assessee's claim was considered by the DRP, however, the same was rejected on merits. 6. We have heard the submissions made by rival sides and have perused the orders of authorities below. In ground No.1 of the appeal, the assessee has assailed adjustment of Rs. 7,35,65,122/- made on international transaction for import of stores and spares, Lifts and Escalators from the AEs. The assessee is engaged in installation, assembling and maintenance of Lifts and Escalators. The Assessing Officer has not disputed TNMM as the most appropriate method and the filters applied by the assessee for selecting comparables to benchmark international transactions. The assessee selected four comparables to benchmark its transactions of purchase of stores and spares of Lift and Escalators from its AEs. The list of the comparables selec....
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.... 7. The Ground No.2 of appeal is against the addition of Rs. 64,28,945/- on account of unaccounted income reflected in Form 26AS. A perusal of the documents on record show that AIR information is based on TDS statement. In total 616 entries were subject matter of reconciliation. The assessee could reconcile 602 entries. As regards remaining 14 entries, the assessee categorically denied to have any business transactions with those entities in the impugned assessment year . The DRP restored this issue to the Assessing Officer to give opportunity of hearing to the assessee for reconciliation. The Assessing Officer confirmed the addition in the final assessment order without complying with the directions of DRP.. The assessee has categorically denied to have claimed the benefit of TDS or receipt of any income from unreconciled entries. We are of considered view that merely on AIR information based on TDS statement addition cannot be made in the hands of the assessee. The assessee has successfully reconciled 602 entries from the total 616 entries in question. For the remaining entries the assessee has denied to have transactions with the parties during the impugned assessment year. S....
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....), Banglaore-I denying the correctness of the AIR in so far as addition of Rs. 21 lakhs sustained by the CIT(Appeals) is concerned. The department has not acted on this letter. In the light of the above discussion and on the facts and circumstances of the present case, we are of the view that the addition of Rs. 7 lakhs sustained by the ld. CIT(Appeals) deserves to be deleted." Similar view has been taken by Mumbai Bench of Tribunal in the case of A.F Ferguson& Co vs. JCIT (supra). Thus, in view of the facts and the decisions discussed above, we find merit in the contentions of the assessee. Since the Revenue has failed to lead positive evidence, the addition of Rs. 64,28,945/- is deleted and ground No.2 of the appeal is allowed. 8. In ground No.3 to 5 of appeal, the assessee has assailed non-granting of deduction in respect of provision for bad and doubtful debts while computing book profits under section 115JB of the Act. The claim was not made by assessee in return of income. The assessee made claim of provision for bad and doubtful debts for the first time before the Assessing Officer. The Assessing Officer rejected the same. However, the DRP entertained claim of the asse....