TaxTMI 
TaxTMI 
TaxTMI 
2021 (4) TMI 202
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.... the total income at Rs. 298.85 as against returned income of Rs. 125.29 crores. 4. This ground raised by the assessee is general in nature, therefore needs no specific adjudication. Ground No. 2 to 16 with regard to adjustment in respect of Advertising, Marketing and Promotion (AMP) expenditure. 5. Before us, Ld. AR submitted that the effective grounds of appeal are Ground No. 2, 3 & 5. Therefore, the other grounds raised by the assessee are alternative pleas, which requires no adjudication. He brought to our notice para 9.27 & 10.11 of TPO order and para 8.2 of Ld. DRP order and submitted that the similar issue has already been decided by the Coordinate Bench of ITAT in assessee's own case for Assessment Year : 2008-09 (ITA No. 6142/Mum/2017) on merits in favour of the assessee. 6. On the other hand, Ld. DR relied on the orders passed by revenue authorities, however he conceded that these ground are covered by the order of ITAT. 7. Considered the rival submission and material placed on record. We are adjudicating the grounds No. 2, 3 & 5 and all other grounds are dismissed which are alternative pleas and academic in nature. We notice from the records that the identical g....
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....the fact that the bright line test method adopted in case of L.G. Electronics India Pvt. Ltd. (supra) was disapproved by the Hon'ble Delhi High Court not only in case of Sony Ericson Mobile Communications (supra) but also in case of Maruti Suzuki India Ltd. (supra). Thus, the reasoning of the Assessing Officer in not following the decision of Maruti Suzuki India Ltd. (supra) is totally unacceptable. We must put it on record, the decision of the Hon'ble Delhi High Court in Maruti Suzuki India Ltd. (supra) has subsequently been followed not only by the same High Court in a number of other cases but also by different Benches of Tribunal, including Mumbai Benches, insofar it relates to the issue whether AMP expenditure incurred in India gives rise to international transaction with the AEs. It is relevant to observe, the DRP has upheld the adjustment made by the Transfer Pricing Officer simply for the reason that the Department has no remedy available against an order of the DRP favourable to the assessee. As regards the decisions relied upon by the learned Departmental Representative as noted herein before, on a careful analysis of each one of these decisions we are of the cons....
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...., the assessee neither has personnel nor infrastructure to conduct such trials, therefore, it cannot be termed as technical service. Hence, he rejected the submissions of the assessee without actually verifying the data before them. Therefore, it is fit case for restoring the matter to the AO/TPO for fresh adjudication of the matter on merits. Accordingly, these grounds raised by the assessee are allowed for statistical purposes. Ground No. 26 with regard to adjustment u/s. 145A of the Act. 12. This ground is not pressed by the assessee, therefore this ground becomes infructuous as not pressed. Ground No. 27 to 28 with regard to disallowance u/s. 36(1)(iii) of the Act. 13. Before us, Ld. AR brought to our notice para 11 of TPO order and para 15 of Ld. DRP order and submitted that the similar issue has already been decided by the Coordinate Bench of ITAT in assessee's own case and the decision of Jurisdictional Bombay High Court in the case of Reliance Utilities, wherein the Hon'ble Bombay High Court observed that assessee has interest free funds, therefore no disallowance u/s. 36(1)(iii) is warranted. 14. On the other hand, Ld. DR relied on the orders passed by revenue....
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.... revenue authorities. 22. Considered the rival submission and material placed on record. We notice from the records that the identical ground has already been decided by the Hon'ble Bombay High Court in the case of Sesa Goa Ltd. (202) 107 CCH 0376 - Bom. For the sake of clarity, which is reproduced below:- 27. The CBDT Circular, is binding upon the authorities under the IT Act like Assessing Officer and the Appellate Authority. The CBDT Circular is quite consistent with the principles of interpretation of taxing statute. This, according to us, is an additional reason as to why the expression "cess" ought not to be read or included in the expression "any rate or tax levied" as appearing in Section 40(a)(ii) of the IT Act. 28. In the Income Tax Act, 1922, Section 10(4) had banned allowance of any sum paid on account of 'any cess, rate or tax levied on the profits or gains of any business or profession'. In the corresponding Section 40(a)(ii) of the IT Act, 1961 the expression "cess" is quite conspicuous by its absence. In fact, legislative history bears out that this expression was in fact to be found in the Income Tax Bill, 1961 which was introduced in the Parliamen....
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....e;-vis. the approval granted by RBI, it can be safely inferred that taxes were liability of J & J India under the terms of agreement. The assessee has entered into a commercial arrangement with J & J US and it has been so arranged that the payment of taxes have to be borne by the assessee being a commercial arrangement, the same should not be questioned while calculating arms length price. Reliance by the assessee on the decision of the Tribunal in the case of Dresser Rand India Pvt. Ltd. in ITA No. 3509/M/08 is well founded. Considering the entire facts in totality in the light of the brand usage agreement and the approval of the RBI, the findings of the Ld. CIT(A) is set aside. The AO is directed to delete the addition of Rs. 60,00,000/-. Ground No. 13 is allowed. 9. Considering the decision of Tribunal in assessee's own case for A.Y. 2002-03 which was followed in A.Y. 2006-07 in ITA No. 83/Mum/2011, for A.Y. 2008-09 in ITA No. 7133/Mum/2012 and further in A.Y. 2009-10 in ITA No. 829/Mum/2014, on identical ground, we confirmed the order of Ld. CIT(A). In the result, ground No. 1 of the appeal is dismissed." 2.1. Respectfully following the said decision, ground No. 1 raise....
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....also considering the alternative contention of assessee that R & D cess and service tax cannot be treated as International transaction, in view of the decision of ITAT, Pune Bench in the case of Kirloskar Ebara Pumps Ltd(supra), we delete the disallowance made by AO/DRP of tax and R & D cess paid on technical know-how royalty on traded goods and manufactured products by allowing ground No. 16 of the appeal taken by the assessee. 28. Therefore, respectfully following the above decision, we reject the contention of revenue. Accordingly, these ground raised by the revenue are dismissed. Ground No. 3 with regard to disallowance of entire technical know how royalty payment on traded goods. 29. Considered the rival submissions and material placed on record on these grounds. We notice from the record that the identical ground has already been decided by the Coordinate Bench of ITAT in ITA No. 4161/Mum/2017 for Assessment Year 2007-08 in assessee's own case on merits. For the sake of clarity, which is reproduced below:- 3. Ground No. 2 raised by the Revenue is with regard to the action of the ld. CIT(A) in deleting the adjustment made on account of payment of royalty on traded fin....
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.... in allowing the technical know-how royalty payment at 2%/4% instead of 1% as done by the ld. TPO. We find that this issue is also covered by the order of the Tribunal in assessee's own case (supra) for assessment year 2005-2006, wherein it was held as under:- "17. We have considered the submission of the parties and find that in assessee's own case for A.Y. 2002-03 in ITA No. 4092/Mum/2007 and ITA No. 4070/Mum/2007, the Tribunal passed the following order:" 55. We have considered the submissions and perused the orders. As we have already held hereinabove that the payment of royalty has to be considered in the light of the agreement between the assessee and J & J USA, for the same reasons, we do not find any reason to interfere with the findings of the Ld. CIT(A)." 18. Further, on similar issue for A.Y. 2006-07 in ITA No. 83/Mum/2011 dated 05.02.2014 the tribunal passed the following order: 55. We have considered the submissions and perused the orders. As we have already held hereinabove that the payment of royalty has to be considered in the light of the agreement between the assessee and J & J USA, for the same reasons, we do not find any reason to interfere with ....