2018 (9) TMI 2111

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....tion was completed by the Assessing Officer in pursuance of direction given by learned DRP u/s. 144C(5) of the Act. 3. Ground No. 1 urged by the assessee is general in nature. 4. Ground No. 2 relates to disallowance of Rs. 8,49,228/- made out of foreign travel expenses claimed by the assessee. Facts relating to the issue are that the assessee incurred a sum of Rs. 24.66 lakhs as travel expenses of employees to foreign countries. The Learned TPO treated the same as international transaction, since the travel was made to the places of Associated Enterprises. Accordingly the TPO made an adjustment of Rs. 50 lakhs on this issue. 5. The Learned DRP, however, accepted the contentions of the assessee that it has incurred expenses on the t....

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....ses incurred by the assessee before the TPO. The Learned DRP has sustained addition to the extent of Rs. 8.49 lakhs only for the reason that the assessee did not furnish details of the same. We noticed that learned DRP has taken cognizance of details only to the extent of Rs. 16.16 lakhs. During the course of hearing, assessee furnished two sets of statements, one containing full details of travel expenses (which was furnished before the TPO) and another one containing details of Rs. 8.49 lakhs (which is extracted from the above said statement). Since full details have been furnished by the assessee before the TPO and since the entire foreign travel expenses have been incurred by the employees of the assessee for the purpose of business, we....

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....rces', as the same does not have nexus to the day to day business carried on by the assessee. Accordingly, we confirm the order passed by the Assessing Officer on this issue. 12. Next issue relates to assessment of income tax recoverable from Gujarat Electricity Board (GUVNL) and Essar Steel Ltd. The assessee has received sale proceeds on sale of power to GUVNL and Essar Steel Ltd. The amount of Income tax recovered from such receipts during the year was Rs. 22.69 crores. The assessee followed a method of accounting whereby it reduced the above said income tax amount of Rs. 22.69 crores from the gross collections and also from income tax provision, i.e. both "Income tax provision" (debited to Profit and Loss account) as well as "Gross co....

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....oticed that the assessee has proceeded to compute book profit by adopting figure of "Profit before tax". In that case, the adjustments, if any, made to the Income tax amount will not have effect on the Book profit, since the figure of "Profit before tax" was adopted to compute book profit u/s 115JB of the Act. In the instant case, we notice that the adjustment of Rs. 22.69 crores has been made by the assessee against the "Provision for tax", which is appearing after "Profit before tax". Accordingly, this issue has to be decided in favour of the assessee. Accordingly, we direct the Assessing Officer to delete the addition of Rs. 22.69 crores made by him to the book profit. 16. Next issue relates to disallowance made u/s. 14A of the Act un....