TaxTMI 
TaxTMI 
2022 (5) TMI 1525
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....ated 31/01/2022 for the assessment year 2017-18 passed pursuant to the directions of the Dispute Resolution Panel (DRP). 2. During the course of hearing the learned AR pressed for only Ground No.19 with regard to transfer pricing adjustment and Ground No. 20 regarding corporate issues. The said Grounds read as follows:- "19. On the facts and in circumstances of the case, the learned AO/learned TPO erred in non-consideration of gross profit ("GP")/sales as the PLI respect of the international transaction of purchase of raw materials. 20. On the facts and circumstances of the case and in law the learned AO erred in making an addition u/s.43B of the Act towards bonus provision without appreciating that the said section sha....
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.... in assessee's own case. The relevant observations of the Tribunal in assessee own case for the assessment year 2010-11 is reproduced below:- "In principle we are in agreement with the contention raised by the assessee as GP over sales can eliminate the difference in claim of depreciation due to age of machinery rate at which it was claimed and method of claims like straight line or written down value. We accordingly direct the AO/TPO to adopt the comparison of profitability ratios adopting GP over sales. Since the details of capacity utilisation of the comparable companies and rate of depreciation could not be analysed as commented by DRP it would be better if GP analysis was undertaken taking sales less cost of raw material as ba....
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.... assessment year 2017-18 the assessee had created a provision for bonus amounting to Rs. 55,023,516 and a provision for long-term service award for Rs.3,37,270. The assessee in the computation of income disallowed these two amounts and claimed the amount actually paid before for the due date for filing the return of income as a deduction u/s. 43B of the Act. The amount so claimed are Rs.4,36,47,012 towards bonus and Rs.90,000 towards long-term service awards. The assessing officer made an adjustment of Rs.4,15,30,847 as disallowable u/s. 43B of the Act in the draft assessment order. 9. The assessee raised objections before the DRP stating that the amount claimed in the computation of income by the assessee u/s. 43B is on the basis of act....
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....ice awards. The learned AR therefore prayed that the said amount be allowed as a deduction u/s. 43B of the act based on the audit report in Form 3CD. 11. The learned DR supported the decision of AO and submitted that if the AO has not verified the actual payments as contended by the ld. AR, then the matter be remitted back to the AO for proper verification. 12. We have heard the rival submissions and perused the material on record. The assessee while filing its objections before the DRP had presented the details of the provision made towards bonus and longterm service awards along with the amounts actually paid and claimed as a deduction in the return of income u/s. 43B of the Act. The assessee had presented these details in a tabular....
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....or bonus 43,647,012 Clause 26(i)(A)(a) and Clause26(i)(B)(a) - Provision for long term service award 90,000 Clause 26(i)(A)(a) Total amount reported in Part A - OI - # 10(c) 43,737,012 Part A - OI - # 11(c) Any sum payable to employee as bonus or commission debited to profit and loss account of the previous year but disallowable under section 43B. - Provision for bonus 55,023,516 Clause 26(i)(B)(a) and Clause 26(i)(B)(b) - Provision for long term service award 337,270 Total amount reported in Part A - OI - # 11(c) 55,360,786 13. The learned AR during the course of hearing drew our attention to the relevant clauses in form 3CD and also the....