TaxTMI 
TaxTMI 
2021 (3) TMI 403
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....2019. The assessee received a defect notice dated 11.11.2020 intimating that the appeal is time barred by 55 days. The assessee submits that the captioned appeal was filed before the Tribunal on 13.05.2019; this appeal was filed against the order of the Ld. CIT(A) dated 22.02.2019 passed u/s 250 of the Act; however, at the time of filing of the appeal, the Managing Director was travelling and the other Director being a foreign Director, was not available in India for execution of the appeal; hence, the appeal could not be signed by them; hence, the assessee, in order to avoid any delay in filing of the appeal filed the appeal documents as executed by the authorized signatory of the assessee. It is stated that a copy of certificate stating that the Managing Director was travelling was filed along with the appeal before the Tribunal on 13.05.2019 and therefore, the assessee took suo motu initiative and filed a revised memorandum of appeal vide letter dated 22.05.2019 to rectify this error of execution by an authorized signatory and this revised memorandum of appeal was duly signed by the Managing Director of the assessee. Thus it is explained by the Ld. counsel that the assessee has ....
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....intenance cost of Rs. 5,89,732/- as an international transaction. The Assessing Officer (AO) following the order of the Transfer Pricing Officer (TPO) has made an addition of the above amount on the ground that the assessee failed to justify the price and benefit derived by it. In appeal, the Ld. CIT(A) confirmed the above disallowance of Rs. 5,89,732/- made by the AO by observing that : "(iii) As regards payment of IT license maintenance cost, again no discussion appears on record. The assessee contends that no such addition is made in earlier year also. However, in my view this is in the nature of royalty as per Explanation 2(i) to section 9(1)(vi) of the Act and as no tax is deducted on this amount, the same needs to be disallowed." 5. Before us, the Ld. counsel for the assessee submits that the appellant has deducted tax u/s 206AA of the Act @ 21.115% and accordingly, disallowance on account of non-deduction of tax at source is uncalled for. On the other hand, the Ld. Departmental Representative supports the order passed by the Ld. CIT(A). 6. We have heard the rival submissions and perused the relevant materials on record. The only point of dispute he....
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....any interest to Non- AEs at all. The assessee has not submitted any document in support of the claim that the credit period allowed to Non-AEs was less than credit period allowed to AE. Also, the chart submitted by the assessee with respect to interest paid to AE shows the period of credit in number of days which is less than 30 days in all the transactions. Thus also it is not justified to pay interest when credit period is as low as less than 30 days. In addition to above, it is also a fact which the assessee has stated that the assessee gives credit period to its customers (Non-AEs) ranging between 90 to 180 days but it does not charge any amount from them as interest at all. Also, it is a fact that the assessee was having transaction with AE in the previous years also and had similar terms of payment with AE in those years also for which the AE had charged NIL interest in all theprevious years." Following the order of the TPO, the AO has made an adjustment of Rs. 29,79,359/-. 9. In appeal, the Ld. CIT(A) confirmed the above adjustment made by the AO by observing that : The facts are that the assessee has paid interest of Rs. 29,79,359/- to the A.E on out....
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.... the above ground of appeal by us would facilitate to render substantial justice between the parties. We are aware of the position of law that where an additional evidence has been allowed to be adduced, the interests of justice demand that the other side must be given an opportunity to explain or rebut such additional evidence as held in the case of Smt. Urmial Ratilal v. CIT, (1982) 136 ITR 797, 799 (Guj); Hiralal Devdutt Jagadhri v. Addl. CIT, (1980) 18 CIT (Punj) 96, 98. Having considered the facts of the case and having regard to the above position of law, we set aside the order of the Ld. CIT(A) on the above grounds of appeal and restore the matter to the file of the TPO/AO to make an order afresh after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence before the TPO/AO. In the result, the 6th, 7th, 8th, 9th, 10th and 11th grounds of appeal are allowed for statistical purposes. 12. The 12th and 13th ground of appeal being levy of interest are consequential. As the penalty has been initiated only, the 14th ground of appeal relating to penalty proceedings is premature and therefore dismissed. 13....
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.... 17. Before us, the Ld. counsel submits that the assessee had availed overdraft facility from Deutsche Bank, Mumbai Branch for Euro 5,00,000 and AE had provided corporate guarantee for the same; the AE charged 2% guarantee commission from the assessee and thereby assessee has paid corporate guarantee fees of Rs. 7,23,100/- to its AE; that corporate guarantee given by AE was for providing finance from Bank on better terms to go a long way in efficient conduct of business, thereby resulting in direct and indirect benefit to the assessee. It is argued by him that the TPO, instead of examining whether guarantee fees paid by the assessee is at arm's length, has considered that this is a shareholder function of the AE. Further, it is argued that the TPO has observed that overdraft facility was taken on 18.08.2008, but the assessee has not paid the corporate guarantee fees till financial year 2011-12, as those were not charged by the AE since AE treated it as shareholder function. Arguing that it is AE's policy to charge 2% guarantee fee to all its AE and the assessee wishes to file supporting evidence in support of the above corporate guarantee fees, the Ld. counsel pleads that the ....