TaxTMI 
TaxTMI 
2021 (3) TMI 319
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....r speedy recovery of payments. M/s. Glencore International AG is parent company of assessee. For the assessment year 2012-13, assessee filed the return of income on 21/11/2012 declaring an income of Rs. 6,63,75,875/-. For a determination of the Arms Length Price ("ALP"), a reference was made to the Ld. Transfer Pricing Officer (Ld. TPO) and the Ld. TPO by order dated 20/1/2016 passed under section 92 CA(3) of the Income Tax Act, 1961 (for short "the Act") did not drawn any adverse inference in respect of the international transaction. Assessment under section 143(3) of the Act was complete by order dated 16/3/2016 at Rs. 10,19,75,050/- after making two additions, namely, Rs. 3,05,73,000/- on account of advance income received by the assessee and Rs. 50,26,177/- on account of the disallowance of business promotion expenses. 3. Assessee preferred appeal before the Ld. CIT(A). Ld. CIT(A) by way of impugned order deleted the addition of Rs. 3,05,73,000/- by accepting the contention of the assessee that the Revenue has been book or to the extent of services rendered by the assessee to its AE during the relevant financier, which is also as per the agreement between the assessee and it....
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....of FIRC; that during the year under consideration the assessee had received 12 monthly instalments of foreign remittances of US the 6 ended, 000/-(sic USD 600,000/- ) from its AE; that the opening balance of income received in advance to the tune of Rs. 2.67 crores was offered to tax this year whereas the closing balance of income received in advance to the tune of Rs. 3.05 crores as on 31/3/2012 was offered to tax in the subsequent years therefore, the question of bringing to tax the advance amount does not arise. He further submitted that the remittances of Rs. 3.05 crore pan offered to tax in the assessment year 2013-14, it was accepted by the learned Assessing Officer in the order dated 20/12/2016 without making any objection. He further submitted that the Ld. TPO in his order dated 20/1/2016 for the assessment year 2012-13 has accepted the Arms Length Price ("ALP") of the remuneration received by the assessee and on consideration of all these facts the Ld. CIT(A) granted relief to the assessee. He therefore, submitted that there are no merits in the argument of the Ld. DR and prayed to dismiss the appeal of the Revenue. 6. We have gone through the record in the light of the....
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....he terms thereof. In such an event when the assessee says that the services corresponding to the amount of Rs. 3,05,73,000/- received in advance were not rendered during that year, there is no reason for the learned Assessing Officer to suspect the same and to bring into tax. When the tax rates per the assessment year 2011-12, 2012-13 and 2013-14 are same, it cannot be said that is not a Revenue neutral transaction. In these circumstances, we are of the considered opinion that, it does not fit in the order of the things that having accepted the offering of Rs. 2.67 crores received by the assessee in the financial year 2010-11 to tax in the assessment year 2012-13 and also having accepted the offering of Rs. 3.05 crores received by the assessee in the financial year 2011-12 to tax in the Assessment Year 2013-14, the learned Assessing Officer would have held that all the amounts that were received during the financial year 2011-12, irrespective of the fact that corresponding services were rendered during that year are not, should be brought to tax in the assessment year 2012-13 itself. 10. In the light of our discussion in the foregoing paragraphs, we hold that the reasoning adopt....
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....% thereof. 13. Ld. DR submitted that the learned Assessing Officer elaborately discussed the veracity of the claim made by the assessee filed disallowing 60% of the expenses and is also a fact that the assessee failed to give proper justification for these expenses when entire sales or made only to the parent company of the assessee. She further submitted that they gifts by the assessee perhaps were given to procure insider information of the market and could be barred by law. 14. Per contra, it is the submission of the Ld. AR that the disallowance by both the authorities is on ad hoc basis and not in consonance with any applicable legal provisions. He further submitted that the orders of the authorities below clearly establish that the details and documents like sample invoices, copy of Ledger account, summary mentioning category of gifts and the list of people to whom the gifts were given etc were furnished and without bringing on record any objective material to show that there are any defects in the details furnished by the assessee, any disallowance at whatsoever percentage is unsustainable. He further submitted that offering gift is not banned by law. 15. He further ....