AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 75
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....eating the income earned of Rs. 21,16,990 on fixed deposits as taxable income Under the head income from other sources instead of income from business iv. Addition of interest income of Rs. 43,946 as income from other sources by computing the total income of the assessee wherein such interest was neither credited to the bank account nor accounted in the books of accounts of the assessee" 03. Assessee is engaged in business of development, widening, strengthening, operating, and construction and maintaining Thiruvanthapuram city Roads. It is improvement project under the annuity concession agreement. 04. It filed its return of income on 30/11/2015 declaring loss of Rs. 85,666,301/-. The return of income of the assessee was picked up for scrutiny. The assessee has entered into a specified domestic transaction [SDT] of project management fees of Rs 14966352/- and Project supervision fees of Rs. 37,75,196/- . Therefore, the SDT entered into by the assessee were referred to the learned transfer-pricing officer for determination of Arm's length Price. The learned transfer-pricing officer found that assessee has entered into specified domestic transaction with IL & FS transportation....
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.... covered under rule 5 and the corresponding appendix for granting of the depreciation [4] further followed the decision of the honourable Bombay High Court in case of West Gujarat Expressway Ltd wherein the depreciation on toll road was disallowed. Accordingly the depreciation of Rs. 211,502,144/- was disallowed. However, assessee was allowed amortization on toll road. The learned AO further found that an amount of Rs. 43,946/- has been given interest by Punjab National Bank to the assessee on which tax has also been deducted but assessee has denied the receipt of the said interest and therefore same was included as income of the assessee Under the head income from other sources. The AO further disallowed the credit of tax deduction at source amounting to Rs. 58,566. Accordingly the total income of the assessee was computed at Rs. 114,085,694/- . There were other transfer pricing adjustment also, but those are not in dispute before us, therefore, facts related thereto are not discussed here. 07. Assessee preferred objections before the learned dispute resolution panel. The directions were issued on 26/9/2019. On the issue of applicability of transfer pricing provisions, it rejec....
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....ersus Export Overseas Ltd, wherein it has been held that due to omission of the clause (i) of Section 92 BA of The Act related to the specified domestic transaction, it never existed in the statute as there is no saving clause, therefore, transfer pricing adjustment on account of specified domestic transaction cannot be made. He even otherwise stated that it is not the 'expenditure', which is claimed by the assessee and therefore even otherwise, no adjustment could have been made. Therefore, this issue is covered in favour of assessee. 011. On the issue of disallowance of depreciation on toll roads, he submitted that the identical issue arose in the case of the assessee in earlier years wherein the claim of the depreciation was allowed to the assessee. He referred to the decisions of the coordinate bench in assessee's own case for assessment year 2008 - 09, 2010 - 11, and 2011 - 12. He submitted that on identical basis the disallowance was made in earlier years of depreciation but is allowed by the coordinate benches. Therefore, this issue is covered in favour of assessee. 012. On the third issue of treatment of interest of Rs. 2,116,919/- on FDR placed Under the debt service obl....
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....A applies. Further, it is a capital expenditure and therefore no benchmarking is required. Assessee also stated that all the expenditure incurred in connection with the project is treated in the books of account as part of capital work progress, which will translate into fixed assets whenever the project is completed. On the capital expenditure the provisions of Section 40A (2) (b) are not applicable and therefore benchmarking is not required under Section 92BA of the act. It was further stated that clause (i) of Section 92 BA of the income tax act has been omitted by The Finance Act, 2017 therefore; the courts have held that such Section was never there in the statute book. Assessee also relied on the decision of coordinate bench, which has been confirmed by the honourable Karnataka High Court. Despite this the learned assessing officer, as assessee has not benchmarked transaction, did not file the details of supporting evidences, correctness of the arm's-length price, the corresponding arm's-length price of the above sum considered at Rs Nil. Consequently, assessee has claimed depreciation on the rate of 15% on the above sum amounting to 28,11,247/-, was disallowed. The action of....
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....346/Mum/2015, C.O. No. 25/Mum/2017 (Arising out of ITA NO. 622/Mum/2015) for assessment year 2010 - 11 and 2011 - 12 by order dated 23rd may 2018. As per paragraph number 2 of that order there was an additional ground raised by the assessee with respect to the depreciation treating the toll collection on road as 'intangible asset'. As per para number 2 .1, coordinate bench relied upon the decision of the coordinate bench in case of Andhra Pradesh Expressway Ltd and later on per paragraph number 7, it held that the claim of the assessee for depreciation on license to collect toll being an 'intangible asset' is falling within the scope of Section 32 (1) (ii) of the act. Assessee was allowed depreciation on road constructed by it under built operates and transfer basis [BOT] was considered as an 'intangible asset'. The coordinate bench also allowed the depreciation to the assessee at the rate of 25% thereon. Therefore, respectfully following the decision of the coordinate bench in assessee's own case, the learned assessing officer is directed to delete the disallowance of depreciation of Rs. 211,502,144/- on toll roads. Ground number 3 is allowed. 020. Ground number 4 is with respect....