TaxTMI 
TaxTMI 
2020 (4) TMI 746
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.... 11,98,944 are to be allowed as deduction while computing profits or gains from business or profession, as the same pertains to reversal of provision of prior years. 3. The learned AO failed to appreciate that such amount was already disallowed at the time of making provision in the prior years. 4. The learned AO has erred in not following the directions of the learned Dispute Resolution Panel ("learned DRP") to verify the fact that the provision for doubtful debts written back has been disallowed in the earlier years. 5. The learned AO has erred in not providing Appellant an opportunity to substantiate the claim pursuant to directions of the learned DRP. II. Disallowance of Management fees 6. The learned AO and learned DRP has erred in disallowing the management fees being cost contribution expenses amounting to Rs. 6,29,93,042 on the basis that tax has not been deducted at source on such payments. 7. The learned AO and learned DRP has erred in contending that the cost contribution expenses are in the nature of technical services liable for withholding taxes under section 195 of the Act. 8. The learned AO and learned D....
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....order. 19. The learned AO has failed to provide an opportunity to be heard to the Appellant before adding back the erred shortfall to the total tax liability. IT(TP)A 614/Bang/2016 (Dept. Appeal) GROUNDS OF APPEAL (i) The directions of the Dispute Resolution Panel are opposed to law and facts of the case (ii) In the facts and circumstances of the case, the DRP erred in deleting the provision for warranty without appreciating the fact that mere comparison of the provision and the actual expenses do not establish Scientific relationship and the claim was only an estimation. (iii) The DRP erred in concluding that the conditions extolled in the decision of the Apex Court in the case of M./s Rotork Control India (P) Ltd had been fulfilled by the assessee. (iv) For these and other grounds that may be urged at the time of hearing, it is prayed that the directions of the Dispute Resolution Panel in so far as it relates to the above grounds be reversed. (v) The appellant craves leave to add, alter, amend and/or delete any Of the grounds mentioned above. CO 97/Bang/2017 (A's Appeal) GROUNDS OF CROSS-OBJECTIONS ....
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....ns of the Dispute Resolution Panel in so far as it relates to the above grounds may be reversed. (vii) The appellant craves leave to add, alter, amend and "or dc'ctc any of the grounds mentioned above. IT(TP)A 650/Bang/2016 (A's Appeal) I. Disallowance of provision for warranty - Rs. 11,14,118 1. The Learned Assessing Officer ['learned AO'] and the Learned Dispute Resolution Panel ["learned DRP"] erred in disallowing provision for warranty amounting to Rs. 11,14,118 contending that the same is not being created on a scientific basis. 2. The learned AO and the learned DRP has erred in concluding that the provision for warranty is created on an adhoc basis. 3. The learned AO and the learned DRP has erred in not appreciating the fact that the appellant creates provision for warranty on accrual basis in the year of sale on the basis of percentage of sales (which is based on past experience). 4. The learned AO and the learned DRP have erred in contending that appellant has failed to furnish scientific basis on which such provision has been created. 5. Notwithstanding the above, the learned AO and the lea....
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....sed under section 143(1) of the Act. Subsequently, case was selected for scrutiny and notice under section 143(2) was served on assessee. In response to statutory notices, representative of assessee appeared before Ld.AO and filed requisite details as called for. 2.1. During assessment proceedings, it was observed that assessee had international transactions with its associated enterprises exceeding Rs. 15 crores and therefore reference to transfer pricing officer was made Ld. TPO upon receipt of reference determined arm's length adjustment at Rs. 5,55,53,912/-. Thereafter Ld.AO while passing draft assessment order proposed following addition: • depreciation on patents disallowed Rs. 2,58,366/- • expenditure on computer software disallowed Rs. 46,46,027/- • provision for slow moving inventory and provisions for warranty disallowed Rs. 93,17,250/- Against proposed additions, on transfer pricing and corporate tax issues, assessee preferred objections before DRP. 2.2. DRP upheld objections of assessee transfer pricing issues in respect of M/s. Acropetal Technologies and objections is regarding other comparables, challenged for exclusion ....
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....her he also submitted that this filter was not applied by Ld. TPO at all. * Ld. AR submitted that DRP upheld inclusion of certain comparables that were having different business model as compared to that of assessee and were also functionally different. 6. We have perused submissions advanced by both sides in light of records placed before us. On transfer pricing issues, raised by revenue and assessee in cross appeals, it is observed that authorities below have cherry picked on using filters without understanding business model of assessee. It is observed that DRP applied on-site revenue filter suo moto, without being considered by Ld.TPO. Under such circumstances, we are of the opinion that transfer pricing adjustment made by Ld. AO/TPO needs to be re-looked in accordance with law. It is observed that Ld. AO while passing final assessment order in computation of assessed income has not considered transfer pricing adjustment that has been made in para 3 of assessment order. This shows a sheer negligence on behalf of Ld. AO and non-application of mind. We therefore set aside, transfer pricing issues, raised by assessee as well as revenue in cross objection and appe....
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..... In the result appeal filed by revenue appeal and cross objection filed by assessee stands allowed for statistical purposes. M/s. Ingersoll Rand (India) Ltd ., Brief facts of the case are as under: 13. Assessee filed its return of income on 28/09/09 which was revised on 27/03/13 declaring total income of Rs. 102,29,34,666/-. Return was processed under section 143 (1) and subsequently selected for scrutiny. Accordingly, notice under section 143 (2) along with questionnaire was issued to assessee. In response to statutory notices, representatives of assessee appeared before Ld. AO and filed requisite details as called for. 14. Ld.AO observed that assessee had international transactions with its associated enterprises exceeding Rs. 15 crores and therefore reference to transfer pricing officer was made Ld. TPO upon receipt of reference determined arm's length adjustment at Rs. 7,38,07,223/-. Thereafter Ld.AO while passing draft assessment order proposed following addition: • provision for warranty on account of replacement of spare and accessories and slow-moving inventory is disallowed Rs. 5,52,52,583/- • provision for doubtful debts disallowe....