AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 1155
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....0,160 in respect of the international transactions entered by the Assessee with its associated enterprises during the previous year. Accordingly, an amount of Rs. 14,59,70,160 is added to the income of the assessee and brought to tax in the draft assessment order as follows:- Sl. No. Description Adjustment u/s 92CA (in Rs.) 1 Administrative Support Service 14,59,70,160/- Total adjustment u/s 92CA 14,59,70,160/- 3. Aggrieved from the draft order, the assessee raised objection against the addition arising out of TPO order u/s 144C(2)(b) before the DRP. The DRP after taking into consideration the submission of the assessee, issued directions to the TPO u/s 144C (5) of the Act order dated 19.02.2021 to re-compute the margin of 8 comparables. Consequently, the TPO has recomputed the Arm's Length Price and the adjustment as under: Description Amount (Rs.) Original adjustment u/s 92CA by the TPO vide order dated 22.10.2019 14,59,70,160 Adjustment as per DRP order 14,78,43,560 Addition in adjustment consequent to Order of DRP 18,73,400 4. Thus, an addition of Rs.14,78,43,56/- was made to the income of the assessee. Against this, the assessee is in appeal bef....
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....fees for administrative support services to the AE, disregarding the deletion of clause (i) of section 92BA of the Act by virtue of amendment by the Finance Act, 2017 w.e.f April 1, 2017. Transfer pricing adjustment on account of re-characterization of payment made for administration support services Treating payment for administrative support services to Cisco Systems India Private Limited ('Cisco India') as an International transaction 5. The learned TPO/AO has failed to appreciate the fact that the agreement between Cisco Capital and Cisco India for availing of administrative support services (which was in the nature of outsourcing of services to Cisco India or deputation services by Cisco India to Cisco Capital) is bona-fide arrangement and the same cannot be treated as an international transaction under section 92B of the Act. Alleging that Appellant has an arrangement with Cisco India and Cisco Systems International BV ("CSI By") whereby Appellant has rendered marketing, sales and administrative support services to CSI BV 6. The learned TPO/AO has erred in law and fact by ignoring the fact that the appellant has not rendered any service to CSI BV. 7. The lea....
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....ned specified domestic transaction. Rejection of Non-comparable companies 12. Without prejudice, the learned TPO/ AO has erred, in law and in fact, by selecting certain companies as comparable companies ignoring the fact that the companies are functionally different: a) Goldmine Advertising Limited b) Pressman Advertising Limited c) Ugam Solutions Private Limited d) Majestic Research Service and Solutions Limited e) Killick Agencies & Marketing Limited f) Scarecrow Communications Limited 13. Without prejudice, the learned TPO/ AO has erred, in law and in fact, by selecting certain companies as comparable companies ignoring the fact that the companies are rejected on RPT filter: a) Majestic Research Service and Solutions Limited 14. Without prejudice, the learned TPO/ AO has erred, in law and on facts, in erroneously selecting the companies that has high fluctuating profit trend as comparable i.e. Killick Agencies & Marketing Limited. 15. Without prejudice, the learned TPO/ AO has erred, in law and on facts, in erroneously computing the operating margins of certain comparables. Initiation of penalty proceedings under section 271(1)(c) of the Act 16. The lea....
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....tion 263 on the ground that the AO had applied his mind and had examined the issue on allowability of depreciation on assets given on financial lease in detail. Aggrieved, the department had filed appeal before Hon'ble Karnataka High Court in ITA No.29/2019 dated 18 June 2021, which has upheld the order of ITAT in relation to quashing 263 proceedings initiated by learned CIT. While doing so, the Hon'ble High Court not only held that action of CIT was not proper but also examined the matter on the merits including examining terms of financial lease agreements and comparing it lease agreements in case of ICDS etc. and held that even on the facts and merits of the case, Assessee is entitled for depreciation on financial lease assets. After examining the terms of financial lease with facts in case of Apex court in case of ICDS (Supra) and Hon'ble Karnataka High Court in case of Hewlett Packard India Sales Pvt Ltd (ITA No.142/2013) dated 30 November 2020, it was held that since terms of arrangement entered into by assessee are similar to facts of case of ICDS (Supra) and Hewlett Packard (Supra), the assessee is eligible to claim depreciation on Assets given on finance lease.....
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....ations in the contracts, then depreciation has to be granted to the assessee as claimed. 10. Pursuant to the order of the Tribunal case for AY 2011-12 and AY 2013-14, the AO has passed the order giving effect for AY 2011-12 recently on September 13, 2021 wherein the AO has examined the agreements signed by assessee with the lessees and recorded the findings that the facts in assessee's case are also similar to facts in case of ICDS Ltd (supra). The AO has held that the assessee has also sold the assets given under finance lease arrangement to the Lessees at the end of the lease term which reinforces that the ownership of the assets under finance lease arrangement lies with the Lessor, i.e., the assessee and hence, assessee only is eligible to claim depreciation on assets given under finance lease arrangement. 11. Further, the ld. AR submitted that that following the decisions for AY 2011-12 and AY 2013-14, the Bangalore Tribunal in relation to the aforesaid issue for AY 2012-13, AY 2014-15 and AY 2015-16 as well, has remanded the matter back to the file of the AO with similar directions as provided in AY 2011-12 & AY 2013-14. The order giving effect to the same is pending with le....
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....itions mentioned in these agreements are similar to the terms and conditions mentioned in the agreements considered by the Hon'ble Supreme Court in the case of ICDS Ltd. (supra) and if there are no material variations in the contracts, then depreciation has to be granted to the assessee as claimed. With these observations, we set aside this issue to the file of AO for fresh adjudication in accordance with the law." 14. Respectfully following the above order of the Tribunal, we are inclined to remit the issue to the file of Assessing Officer for fresh decision with similar directions. 15. Ground No.3 by the assessee is with regard to not allowing set-off of brought forward depreciation loss. In the return of income, the assessee had claimed set off of brought forward depreciation losses amounting to INR 55,51,76,688 pertaining to AY 2013-14 and INR 174,42,76,795 pertaining to AY 2013-14 aggregating to INR 229,94,53,483. The AO denied the same. The DRP in its directions directed the AO to pass the order giving effect to the Tribunal order for AYs 2008-09, 2009-10 & 2013-14 and thereafter provide set off of brought forward losses. However, the AO while passing the final assessment o....