TaxTMI 
TaxTMI 
2020 (4) TMI 706
X X X X Extracts X X X X
X X X X Extracts X X X X
....reproduced as under: 1. The Ld. AO has grossly erred both on facts and in law in confirming the action of the Ld. Transfer Pricing Officer ('Ld TPO') in not considering outstanding receivables from the Associated Enterprises (AEs) as closely linked to the international transaction of sale of goods and consequently re-characterizing the said receivables as short term loans & advances, thereby making a TP adjustment of INR 803,801/- on account of imputed interest. 2. Without prejudice to the Ground No 1, the Ld. AO has grossly erred both on facts and in law in confirming the action of the Ld. TPO in benchmarking the outstanding receivables by application of CUP method on the basis of extraneous external comparables and completely ignoring....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stries, power-plant, mining cement and other plants engineering industries. The assessee filed return of income for the year under consideration on 30/11/2013, declaring total income of Rs. 11,94,37,330/-. The case was selected for scrutiny assessment and notice under section 143(2) of the Income-tax Act, 1961 (in short 'the Act') was issued and complied with. During assessment proceeding, the Assessing Officer observed international transactions carried out by the assessee with its Associated Enterprises(AEs) and referred the matter for benchmarking of those international transactions to the learned Transfer Pricing Officer (TPO). The international transactions reported by the assessee was found by the Ld. TPO at arm's length, however, he ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ance to the direction of the learned DRP, the Assessing Officer passed the impugned final assessment order on 30/06/2017 and aggrieved with the additions/disallowance made in the impugned order, the assessee is in appeal before the Tribunal. Subsequent to the filing of this appeal, Ld. TPO gave effect to the direction of the Ld. DRP and in his order dated 31/01/2018, he recomputed the transfer pricing adjustment of the interest to Rs. 3,70,867/-. 3. Before us, the learned counsel of the assessee filed a paper book containing pages 1 to 164 and submitted that the assessee was a debt free company during the year under consideration therefore, in view of the decision of the Hon'ble Delhi High Court in the case of PCIT Vs Bechtel India Private....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... transaction in dispute is covered by the definition of the international transactions and, therefore, learned TPO justified in benchmarking the transaction. He relied on the various judicial pronouncement referred by the learned TPO in his order. The learned DR also relied on the decision of the Tribunal in the case of Cheil India Private Limited in ITA No. 1230/Del/2014 for assessment year 2009-10. 3.3 We have heard the rival submission of the parties on the issue in dispute and perused the relevant material on record including the decisions cited by both the parties. We find that Hon'ble Delhi High Court in the case of Bechtel India Private Limited (supra) held that when the assessee is a debt free company the question of receiving any ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....., however, the assessee submitted few email interaction between the assessee and Sh. Pandey, which according to the Assessing Officer was not sufficient to explain the nature of the services rendered by him. The learned Assessing Officer pointed out that as per the authorities issuing the tender, there was no requirement of any commission agent and if so required the government prescribed persons were only eligible to act as agent for rendering the services, which was not the situation in the instant case. 4.2 The learned AO relied on the decision of the Hon'ble Calcutta High Court in the case of Standipack (P) Ltd Vs CIT (2012) 211 Taxmann 144 (Calcutta), wherein it is held that expenditure towards commission paid for providing expertis....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... authorities is allowable as business expenditure. The learner Consul submitted that no addition has been made on this account on earlier years. 4.5 The learned Departmental Representative, on the other hand, relied on the order of the lower authorities and submitted that Mr. D.N. Pandey was an employee of the railway and no other qualification or technical expertise of Mr. Pandey in the field of the work of the assessee, had been brought to the notice of the lower authorities. He further submitted that such commission expenses claimed in subsequent years have also been disallowed. The learned DR submitted that no documentary evidence of any services rendered by Mr. D.N. Pandey has been produced, which could establish that Mr. Pandey inte....