TaxTMI 
TaxTMI 
2021 (6) TMI 538
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....e it, had the occasion to consider the following substantial grounds of appeal for A.Y 2011-12: ""(a) Whether impugned order is perverse and bad in law to the extent it upholds substantial variations to determination of arm's length price in transfer pricing study in the face of clear, unambiguous and express finding by Transfer Pricing Officer that "It is emphasized that Transfer Pricing study was not rejected at all"? (b) Whether conclusion in impugned order classifying software development services rendered by Appellant as "High end" in nature for purposes of Chapter X of the Act is (a) contrary to facts and law as also material on record, (b) perverse as it does not consider all relevant material on record, selectively considers statements recorded by Respondent in the course of Advance Pricing Agreement proceedings and (c) unlawful and unsustainable in law as same arises from gross misinterpretation of facts, law and agreement between parties? (c) Whether impugned order, to the extent it finally upholds rejection of several companies as being not comparable to Appellant for determination of arm's length price of international transaction, is bad in l....
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....e assessee in support of its claim. It is well settled law that remand is not a power to be exercised in a routine manner and should be used sparingly, as an exception only when the facts warranted such course of action. In our opinion, when the requisite materials and the intervening decision of the jurisdictional high court was available for deciding the issue urged by the Assessee, the Tribunal ought to have arrived at a conclusion rather than remanding the matter back to the Assessing Officer. 13. Accordingly, we partly allow the appeal of the Assessee on question (d) and direct the learned ITAT to take up and decide the corporate tax grounds urged by the Assessee in its appeals. Thus, the appeal of the Assessee is restored to the file of the ITAT for AY 2011-12 to the limited extent , noted above." 5. Similarly, same directions were given by the Hon'ble High Court in ITA No. 652 of 2019 and 710 of 2019 for A.Y 2012-13. 6. Representatives of both the sides fairly conceded that the under lying facts in the impugned issues are identical in both the A.Ys under consideration i.e. 2011-12 and 2012-13. Therefore, for the sake of convenience, we decided to ....
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....ain ancillary purposes. With this objective, the Assessee equipped with the building, furniture and fixtures. The lease deed in that case provided for a monthly rent of Rs. 5,950 for the building and hire of Rs. 5,000 for the furniture and fixtures. 17.2 The Department disallowed the claim of the Assessee stating that the entire sum received under the lease was to be treated as 'income from other sources'. While the rent receipt for the building was treated as 'income from house property', the rent received on account of furniture and fixtures alone was held to be admissible under 'income from other sources'. 17.3 However, the Supreme Court accepted the Assessee's claim by holding that 'when a building, plant, machinery or furniture are inseparably let, the Act contemplates the rent for the building as a residuary head of income'. The Court observed as under: "It seems to us that the inseparability referred to in sub-Section (4) is an inseparability arising from the intention of the parties. That intention may be ascertained by framing the following questions: Was it the intention in making the lease - and it m....
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....entioned findings of the Hon'ble High Court, we will now consider the facts of the case in hand. 12. During the course of scrutiny assessment proceedings, vide show cause notice dated 17.12.2014, the assessee was asked to show cause as to why income offered to tax as "Income from house property" should not be treated as "Rental income". 13. The assessee filed detailed submissions vide letter dated 26.02.2014 explaining the contents of the lease agreement and pointing out that it is a composite agreement and the amount received by the assessee is not simply for the let out of building simplicitor i.e. only towards the letting out of the building space but the same is composite rent received towards composite/inseparable letting of building, furniture and fixtures, equipments air conditioners, etc. It was explained that it is a case of renting of the premises with a host of facilities by way of infrastructure/amenities and maintenance. 14. Strong reliance was placed on the judgment of the Hon'ble Supreme Court in the case of Sultan Brothers Pvt Ltd vs CIT 51 ITR 353. It was brought to the notice of the Assessing Officer that relying on the judgement of the Hon'....
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....f Rs. 17,22,16,198/- from Microsoft Global Services Center (India) Private Limited are composite rent received towards inseparable letting of building, furniture and fixtures, equipments, air conditioners etc. is also factually incorrect. - 4.3 In the current year also the facts of the case are similar to that of the earlier years. The cases relied upon by the assessee are also factually different from the case of the assessee. The Hon'ble Supreme Court in the case of Sultan Brothers (relied upon by the assessee) has held that few tests are required to be conducted to ascertain whether the rent has been received towards inseparable letting of building, furniture and fixtures etc. The relevant extract of the above judgment is reproduced below:- lt seems to us that the inseparability referred to in subsection (4) is an inseparability arising from the intention of the parties. That intention may be ascertained by framing the following questions: Was it the intention in making the lease-and it matters not whether there is one lease or two, that is, separate leases in respect of the furniture and the building-that the two should be enjoyed togethe....
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....ion as may be required by the LESSEE. The LESSOR shall be liable for all cost, charges and taxes, including Municipal Coloration taxes for installation of such dish or other microwave equipment, V Sat Link equipment, tower, dish antennae, and, or, satellite ythe LESSEE. The LESSOR has agreed to provide the following services to the LESSEE in the LEASED PREMISES during both the Initial Term and the Extended Term: 0) Power back up - The LESSOR shall provide 50 KW diesel generator set power back up for the LEASED PREMISES at no additional cost. The running cost for the said 50 KW diesel generator set, during the Initial Term and Extended term, shall be payable as mutually agreed upon by the Parties. (ii) Air conditioning - The LESSOR shall provide 25 TR airconditioning for the LEASES Premises at no additional cost. The LESSOR will ensure an ambient temperature of +/-1 degree from 23 degree Celsius. Now we are in a position to conduct the tests suggested by the Hon'ble Apex Court. > Was it the intention to make the letting of the two practically one letting? No, as the assessee has computed the rent only on the basis of the space an....
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.... Officer but we do not concur with the findings. There is no dispute that the lease agreement is a composite lease agreement which included the inbuilt infrastructural facilities provided which included central air conditions with ducting, DG power supply, net work equipments, access control equipments, electrical equipments, VAVs and controllers, smoke detectors and occupancy sensors. 17. The agreement also included other amenities, namely installation of dish antenna/satellite, parking space, repair and maintenance which includes repairs, interior or exterior, electrical and plumbing work, repair and maintenance of common and open areas and facilities provided at the building like compounds, gardens, passage, elevators, lifts, terrace, DG sets etc and also 100% power backup and centralised air conditioning. 18. In our considered opinion, for similar set of amenities/facilities, the Hon'ble Supreme Court in the case of Sultan Brothers [supra] has laid down certain tests which have been followed by the Hon'ble High Court of Delhi in the case of Garg Dyeing & Processing Industries [supra] and later on in the case of Jay Metals [supra]. We are of the considered view tha....