TaxTMI 
TaxTMI 
2023 (9) TMI 25
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....sociated Enterprises-AE). 2.1. We have heard rival submissions and perused the materials available on record. Home Field International Pvt. Ltd. (HIPL) in Mauritius is a 100% subsidiary of the assessee formed with a view to make investments globally. The assessee was bidding for acquisition of Egyptian Fertiliser Company through HIPL With a view to fulfil the pre-bid condition of 'Proof of funds letter' from an international banker, the assessee had lent USD 110 million to HIPL to show availability of funds with them. The lending of funds was from 16.05.2005 to 26.06.2005 i.e. for a period of 41 days. Since, the bid was unsuccessful the funds were returned back. The said funds were placed by HIPL as short term fixed deposits with Barclays Bank. Interest earned by it on such deposits of USD 3,76,247 has been paid as interest to the assessee after reducing bank charges of USD 105. Accordingly, the assessee company earned interest income of USD 376247 from its AE on this special purpose lending to its AE. Apart from this, the assessee had also advanced regular loans to its AE which were benchmarked by the assessee by applying LIBOR + 200 basis points as the ALP rate. This w....
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....on 28/06/2005 and returned the money to the assessee on the very same day. This goes to prove that the AE had actually received interest @3% on the funds parked by it with Barclays bank. The very same interest amount of USD 376247.02 had been returned to the assessee company by the AE without retaining any margin thereon. This peculiar fact itself goes to prove that the fund that was given to AE was not at the disposal of the AE to be utilised for any other purpose, rather it was used for special purpose funding to participate in the bid, for which purpose the funds were placed in the form of short term deposits with Barclays bank. Hence, this peculiar fact distinguishes this special purpose loan transaction given to AE in the sum of USD 110 million with regular loans given by the assessee to its AE. Accordingly, the assessee had bifurcated this special purpose loan which had fetched interest @3% with the regular loan transactions which had fetched interest @LIBOR +200 basis points. 2.3. The ld. TPO observed that since the assessee had included this USD 110 million in Form 3CEB along with all other loans by stating that it had benchmarked at LIBOR + 200 basis points, the ld. TPO....
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.... When the Times Group decided to expand its wings in the radio broadcasting business and acquire overseas companies engaged in this line of business, as is stated, it was considered commercially expedient to make these investments through the assessee company. A public listed company in the United Kingdom, by the name of Scottish Media Group plc (SMG-UK, in short), wanted to disinvest in its radio broadcasting business, and that is the reason it put to auction its entire shareholding in Virgin Radio Holdings Limited, UK, (Virgin Radio, in short) which was held through SMG's wholly-owned subsidiary Ginger Media Group Ltd, UK. (Ginger-UK, in short). TIML-India was one of the successful bidders in this auction. The assessee was then invited to participate in the 'final proposal' phase of this disinvestment deal. A final proposal dated 19th March 2008 was submitted by the TIML-India. This offer, at point no. 5, specifically stated, under title 'Identity of the shareholders (with immediate and ultimate ownership)' that the purchasing company will be "an SPV formed specifically for the purpose of acquiring Virgin Radio", which is "100% owned by TIML" and that "the imm....
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....16 (UK GBP 1.2 million for equity, and balance UK GBP 55.824 million as an interest-free loan to TIML-Global on 27^th June 2008. Once this amount of UK GBP 56.82 million was received by TIML-Global, it paid UK GBP 53.51 million, on that day itself, on behalf of TIML-Golden, for the acquisition of Virgin Radio shares, and the balance amount of TIML-Golden for other acquisition-related costs. The acquisition of shares in Virgin Radios by TIML-Golden was completed on 30th June 2008. A further payment of UK GBP 3,75,000, as an interest-free loan, was made by TIML India to TIML Global for the working capital costs. It was in this backdrop that form 3CEB filed by the assessee company disclosed the following transaction with its AE: "Amount remitted Rs. 477,10,41,750". 2.4.1. The findings of the Tribunal are as under:- 6. We have heard the rival contentions at considerable length, perused the material on record and duly considered facts of the case in the light of the applicable legal position. The basic plea of the assessee, on which we are deciding this appeal, is the limited scope of application of the CUP method, and whether any commercial interest can be attributed, as an....
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....arking tool for GBP denominated loan. Learned counsel reiterates his submissions, submits that this transaction is shown as a loan in the books of accounts as that is the only way in which it can shown, under the legal requirements, but then nothing really turns on how the transaction is treated for accounting purposes. Learned counsel for the assessee has vehemently opposed this suggestion and submitted that what is before this Tribunal is an adjudication on the arm's length price adjustment made and confirmed by the authorities below; if this arm's length price adjustment is incorrect, the Tribunal has to delete the same. As for what other remedies are available to the authorities below to correct their mistakes, it is not for the Tribunal to do anything parallel or to override the same. He thus reminds us, in his inimitable subtle way, of our role as a neutral forum and our limitation of not being able to supplement or improve the case of the Assessing Officer and the Transfer Pricing Officer. In addition to these arguments, many other facets of the matter have been argued before us, but then, in our considered view, it is not really necessary to deal with those facets. ....
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.... company. Let us not forget the fact that the assessee company was one of the successful bidders in the purchase of the entire equity capital of Virgin Radios, which was held by Ginger Group plc UK- a wholly-owned subsidiary of the Scottish Media Group plc. Upon carrying the due diligence, and completion of other prerequisite steps, the assessee makes a final proposal, on 10^th March 2008, with respect to the acquisition of Virgin Radios from Ginger Group plc UK, when TIML Global UK was not even in existence. TIML Global, the AE to which the remittance in question is made, was incorporated on 13^th June 2008 in the UK and acquired by the assessee on 18^th June 2008. Yet this final offer states that an SPV is formed especially for the purpose of acquiring Virgin Radios, and this SPV will be entirely funded from internal resources of the assessee company and its Indian parent company. Clearly, therefore, the agreement to acquire the Virgin Radios was reached much before the AE in question, i.e. TIML-Global, even came into existence, and the AE in question, i.e. TIML-Global, was used as a medium to acquire Virgin Radios. It is not thus a loan simpliciter to TIML- Global, but it is in ....
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....for that purpose. Such a transaction, in our humble understanding, cannot be equated with providing funds to another enterprise as a loan simpliciter, on a commercial basis, which essentially implies that such a borrower can use the funds so received in such manner, even if subject to broad guidelines for purpose test, in furtherance of borrower's business interests. Ironically, however, that is precisely what the Transfer Pricing Officer has done and has been approved by the Dispute Resolution Panel as well. 14. It is also an admitted position that TIML-Global is a special purpose vehicle. A special purpose vehicle, or SPV as it is commonly called, is an entity that is set up for a special purpose or a special project. SPVs are often used by the promoters of a project or business to isolate the financial or legal risk associated with the project or activity for which the SPV was set up or because sometimes the activity or project in question requires an entity registered in a specific jurisdiction or specific jurisdictions. The business structuring through SPVs, particularly SPVs structured abroad, could be warranted on account of a variety of commercial and legal con....
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.... arm's length situation. Section 92F(ii), as we have noted earlier, defines arm's length price as a real or hypothetical price in the same or materially similar transaction "between persons other than associated enterprises, in uncontrolled conditions". In the first place, an enterprise and its SPV are inherently associated enterprises. The definition of 'associated enterprises' under section 92A(1) covers "an enterprise which participates, directly or through one or more intermediaries, in the management or control or capital of the other enterprise". An SPV is entirely managed, entirely controlled and entirely owned by the enterprise which sets up the SPV. So far as section 92A(2) is concerned, SPVs are covered by more than one clause as the entire voting power (clause a) and entire share capital (clause b) of the SPV is held by the owner of that SPV, but loan advanced, if the remittance is to be treated as a loan to the SPV, by the owner of the SPV is clearly more than 50% of the book value of the assets owned by the SPV (clause c) at each stage. That is one thing. The other aspect of the matter is that not only the transaction has to be between independent enter....
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....ese entities are independent of each other. In our humble understanding, when the overseas entity is, from a commercial perspective, a de facto non-entity and it has come into legal existence only for the furtherance of the interests of the company providing the wherewithal, all the gains that such an overseas entity belongs to the Indian company. The SPV in such a situation is no more than a conduit entity. In an arm's length situation, when an SPV is created for some specific project or purpose, therefore, the net gains of that project or purpose must go to the person(s) sponsoring the SPV. The next logical question then would be as to how does this principle translate into actionable reality. We find inputs from transfer pricing legislation in a developing economy in the African continent. Rule 8(1) of the Nigerian Income-tax (Transfer Pricing) Regulations 2018, which we have referred to and reproduced earlier in this order, throws important light on this aspect. What this rule holds, in plain words, is that an SPV, which does not control the financial risks associated with its funding activities, shall not be allocated the profits associated with those risks, and the profit....
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...., there is no economic gain to the SPV in the relevant financial period, and, therefore, even going by this theory, the arm's length price of providing funds to the SPV, under the CUP method, would be 'nil'. Except for this arm's length price imputation- if all it can be so imputed under the CUP method, no amount of commercial interest, as in a borrowing simpliciter- whether LIBOR based or PLR based, can be attributed to the funding to the SPVs. The action of the authorities below on this point, thus, is unsustainable in law. Ground Nos 2 to 9 are thus allowed in the terms indicated above. 2.5. The only distinguishing feature of the assessee's case with that of the facts prevailing in Bennett Coleman And Co. Ltd supra is that, in that case, special purpose lending was given for the purpose of participation in the bid and the bid was successful, whereas in the instant case, the bid was not successful. Barring this, all the facts are identical. Hence, ratio laid down by the Co-ordinate Bench of this Tribunal supra would be squarely applicable to the facts of the instant case before us. 2.6. In view of the aforesaid observations and respectfully following the jud....
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....he assessee had made payment of Rs. 81,26,900/- to as entrance fee subscription and contribution towards service and facility use to the following persons:- Corporate Office Tata Sports Club - Rs 3,30,000 Mithapur Mithapur Nutan Balshikshan Sangh - Rs 19,00,000 Kindergarten Primary School - Rs 10,75,000 Flag Day Celebration - Rs 2,150 Babrala Tatachem D A V Public School - Rs 44,44,813 Tatachem Sports and Cultural Club - Rs 3,71,337 Total - Rs 81,26,900 5.2. The said payments were sought to be disallowed by the ld. AO by applying the provisions of section 40A(9) of the Act pursuant to the directions of the ld. DRP. Both the parties mutually agreed that this issue has already been settled in favour of the assessee by the co-ordinate bench decisions of this tribunal in assessee's own case as under:- Contribution to Tata Sports Club Covered in ITA No. 3082/Mum/2002 dated 26.07.2006 in A.Y. 1995-96 Covered in ITA No. 6496/Mum/2004 dated 17.08.2007 in A.Y. 1996-97 Covered in ITA No. 3383/Mum/2015 dated 22.04.2019 in A.Y. 2002-03 Mithapur Nutan Balshikshan Sangh Covered in ITA No. 4442/M....
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....d judicial precedents, the Ground No. 4 raised by the assessee is allowed. 7. The Ground No. 5 raised by the assessee is with regard to disallowance of computer upgradation expenses, which was stated to be not pressed by the ld. AR as depreciation has been granted to the assessee in the later years. Hence Ground No. 5 raised by the assessee is dismissed as not pressed. 8. The Ground No. 6 raised by the assessee is challenging the denial of deduction u/s 80IA of the Act in respect of profits derived by the Mithapur Power Plant. 8.1. We have heard the rival submissions and perused the materials available on record. The assessee has claimed deduction u/s 80IA of the Act in respect of its Power Plant comprising of High-Pressure Boiler (HPB3) and Turbine (TT9) set, located at Mithapur Plant, Mithapur, Plha Mandal, Gujarat-361315. It is not in dispute that the power generated by this Power Plant is captively consumed by the other units of the assessee company. It is not in dispute that the said power plant was set up on 11.05.1995 and the initial year of claim of deduction u/s 80IA of the Act was A.Y. 2001-02. It is not in dispute that separate books of accounts are maintained a....
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....it is enclosed in page 133 of the paper book. The workings for deduction u/s. 80IA of the Act are enclosed in page 131 of the paper book. 8.3. For the year under consideration, the sales figure for electricity is derived by multiplying units of electricity produced by the power plant with the fair market transfer price of Rs. 4.74 per unit. The rate of Rs. 4.74 per unit is derived as a equivalent cost of power per unit if the power would have been purchased from local state electricity board- i.e. Gujarat State Electricity Board. This is done as per the provisions of section 80(IA)(8) of the Act which provides for adoption of Fair Market Value (FMV) for goods transferred to another business of the assessee. 8.3.1. The sale of steam generated by the power project has been recorded at cost of producing the same. The sale of steam could not be recorded at fair market value as there is no ready market for steam i.e. steam is not a Marketable product. 8.3.2. As far as electricity is concerned, the cost of production of power is arrived at scientifically as per the cost records and the same has been matched against the figure of Sales which is the amount which would be required ....
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....ilarly, the Hon'ble Delhi High Court in the case of CIT vs. Orient Abrassive Ltd in ITA Nos. 991/2010, 1078/2010, 1077/2010, 1079/2010 and 535/2011 dated 31/07/2014 had also held that assessee would be eligible for deduction u/s. 80IA of the Act in respect of captive consumption of power generated from the eligible unit. Respectfully following the aforesaid decisions, we hold that assessee was duly justified in claiming deduction u/s. 80IA of the Act for captive consumption of power. In any case, the very same deduction was granted under the same facts and circumstances by the ld. AO himself in A.Y. 2001-02. Once, the deduction u/s. 80IA of the Act has been granted in the first year of its claim, then in subsequent year, the same cannot be withdrawn unless there are adverse factual developments. In the instant case, there is absolutely no adverse factual development that had been placed on record by the Revenue to justify its withdrawal of deduction u/s. 80IA of the Act in the 6^th year of its claim of the assessee. Reliance in this regard has been rightly placed by the assessee on the decision of the Hon'ble Jurisdictional High Court in the case of CIT vs. Paul Brothers reported i....
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....menite. 18.9 The submission of the learned AR of the assessee is that since power in the form of steam was generated by the captive power plant and consumed in the manufacture of PVC and Ilmenite, therefore, the assessee is entitled for deduction under section 80-IA. Further, the learned AR submitted that on identical set of facts, the department filed Special Leave Petition before Hon'ble Supreme Court against the judgment of Hon'ble Madras High Court in T.C. No. 1773 of 2008 and vide judgment dated 6^th November, 2008, the Apex Court dismissed the department's appeal. In the said judgment Madras High Court dismissed the Department's appeal against the decision of Tribunal holding that the assessee was entitled to claim deduction under section 80-IA of the Act on the value of steam used for captive consumption by the assessee. CIT v. Tanfac Industries Ltd. [S.L.P.(C) No. 18537 of 2009] (319 ITR 8 & 9). In the light of above discussion, we find that the steam produced by the assessee is eligible unit is a bye-product and income from sale of steam is the income derived from industrial undertaking, therefore, deduction under section 80-IA is allow-able. We, accordingly, set ....
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....ion under Section 80IA of the Income Tax Act, 1961 ("the Act" for short) in respect of the profits arising out of such activity. Obviously, therefore the attempt on the part of the assessee was to claim larger profit under the unit which was eligible for such deduction as against this, attempt of the revenue would be see that the ineligible unit shows greater profit. 6. The Tribunal in the impugned judgment extracted extensively from the order of CIT (Appeals) and independent reasons for confirming the same. In such order CIT (Appeals) had placed reliance on an earlier judgment of the Tribunal in case of Reliance Infrastructure Ltd. v. Addl. CIT [2011] 9 taxmann.com 186 (Mum. - Trib.). Learned counsel for the assessee had placed on record a copy of the judgment of the Tribunal in case of Reliance Infrastructure limited. In such judgment an identical issue came up for consideration. The Tribunal by detailed judgment had held and observed as under:- "44. In the given facts and circumstances of the case, we are of the view that the profits of the business of generation of power worked out by the Assessee on the basis of the price that it paid to TPC for purchase of p....
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.... Accordingly, the ground No.6 raised by the assessee is allowed. 9. The ground No.7 raised by the assessee is challenging the denial of deduction u/s. 80IB of the Act in respect of fertilizer subsidy received by the Haldia unit in West Bengal. 9.1. We have heard rival submissions and perused the materials available on record. We find that assessee had received a price concession from the Government which has been coined as fertilizer subsidy. The assessee submitted that the maximum retail price for sale of fertilizers to farmers had been fixed at a concessional rate by the Government, i.e. in other words, the assessee is mandated to sell the fertilizers to the farmer only at the maximum retail price fixed by the Government which is below the actual market price. The difference between actual market price and MRP is being paid by the Government to the assessee in the form of fertilizer subsidy. This is done in order to protect the farmers and it is more of welfare measures adopted by the Government in consonance with the Government Policies. It is only subsidy to the farmers and not to the assessee. Hence, as far as the assessee is concerned, it is effectively the receipt of s....
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....drawing salary from the assessee company. The assessee pleaded that the said payments were made to these two Directors as permitted in the provisions of the Companies Act 1956. The assessee also submitted that the said commission has been taken into account as part or remuneration paid to the said Directors and due deduction of tax at source were complied with. The ld. AO however, did not heed to the contentions of the assessee and invoked the provisions of Section 36(1)(ii) of the Act and disallowed the same on the ground that the said commission has been paid to the shareholders by way of distribution of profits as dividend. In other words, the case of the Revenue is that in lieu of the dividend, this commission has been paid by the assessee to the Directors. The ld. AR before us vehemently argued that both the Managing Director and Executive Director are not even shareholders of the assessee company. Hence, the provisions of Section 36(1)(ii) of the Act per se cannot be applied in the instant case. The ld. AR also submitted that the reliance placed by the ld. AO on the decision of the Hon'ble Bombay High Court in the case of Loyal Motor Services Co. Ltd. vs. CIT reported in 14 I....
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.... the assessee by this Tribunal in A.Y. 2002-03 and hence, the ld. AR did not press this ground. Accordingly, the ground No.10 is dismissed as not pressed. 14. The ground No. 11 raised by the assessee with regard to refusal to withdraw deduction of loss on foreign exchange fluctuation was stated to be not pressed by the ld. AR at the time of hearing. This issue is left open to be adjudicated in subsequent years, if the need arises. Accordingly, the ground No. 11 is dismissed as not pressed. 15. The ground No. 12 raised by the assessee is challenging the disallowance of deduction for early settlement scheme / voluntary retirement scheme expenses. The same was stated to be not pressed by the ld. AR as proportionate deduction was allowed to the assessee over a period of 5 years. Hence, the ground No. 12 is hereby dismissed as not pressed. 16. The ground No. 13 raised by the assessee is with regard to unilateral addition of Rs. 7,93,739/- made by the ld. AO. This ground was stated to be not pressed by the ld. AR due to smallness of the amount. Accordingly, dismissed as not pressed. 17. The ground No.14 raised by the assessee is challenging the adjustment to book profits u/s.....
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....which the loan is getting utilized is to be considered and since the loan is in USD and the repayment from AE is also going to be in USD, then interest rate @LIBOR + 200 basis points would be at arm's length. The assessee in support of its submission also submitted a quotation received from HSBC for similar type of transaction which quoted interest rate of LIBOR + 0.5%. As against this, the assessee has charged interest @ LIBOR + 2% from its AE and accordingly, it was submitted that assessee's interest rate is at arm's length. The ld. DRP however, took a different view. The ld. DRP observed that out of USD 140.58 million, the assessee already had funds lying by way of FCCB issue proceeds to the extent of USD 112.22 million in its dollar account. Hence, for that amount, interest to be adopted would be LIBOR + 2%. Accordingly, no TP adjustment would be required for the same. The ld. DRP however, held that with regard to remaining USD 28.36 million, since the same were sourced out of Indian funds, Indian banking lending rate should be considered which was determined by the ld. DRP at 11%. The ld. DRP directed the ld. TPO to determine the ALP @11% interest rate in respect of USD 28.36 ....
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....claims or debts in national currency and those in foreign currency is normally no use, because, for instance, a US $ loan advanced by a US lender is to him a debt-claim in national currency whereas to a German borrower it is a foreign currency debt (the situation being different, however, when an agreement in a third currency is involved). Moreover, a difference in interest levels frequently reflects no more than different expectations in regard to rates of exchange, rates of inflation and other aspects. Hence, the choice of one particular currency can be just as reasonable as that of another, despite different levels of interest rates. An economic criterion for one party may be that it wants, if possible, to avoid exchange risks (for example, by matching the currency of the loan with that of the funds anticipated to be available for debt service), such as taking out a US $ loan if the proceeds in US $ are expected to become available (say from exports). If an exchange risk were to prove incapable of being avoided (say, by forward rate fixing), the appropriate course would be to attribute it to the economically more powerful party. But, exactly where there is no 'special relati....
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....group. Transfer pricing of inter-company loans and guarantees are increasingly being considered some of the most complex transfer pricing issues in India. The Indian transfer pricing administration has followed a quite sophisticated methodology for pricing inter-company loans which revolves around: • Examination of the loan agreement; • A comparison of terms and conditions of loan agreements; • The determination of credit ratings of lender and borrower; • The identification of comparable third party loan agreements: and • Suitable adjustments to enhance comparability. 10.4.10.2. The Indian transfer pricing administration has come across cases of outbound loan transactions where the Indian parent has advanced to its associated entities (AE) in a foreign jurisdiction either interest free loans or loans at LIBOR (London Interbank Offered Rate) or EURIBOR (Euro Interbank Offered Rate). The main issue before the transfer pricing administration is benchmarking of these loan transactions to arrive at the ALP of the rates of interest applicable on these loans. The Indian transfer pricing administration has determined....
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.... for the parent company. In the present case, we are not concerned with paragraph 10.4.10.3 of the United Nations Transfer Pricing Manual. However, we are unable to agree with the position set out and asserted in paragraph 10.4.10.2 of the Manual. The reasoning given therein is contrary to the accepted international tax jurisprudence and the rules adopted and applied. There is no justification or a cogent reason for applying PLR for outbound loan transactions where the Indian parent has advanced loan to an AE abroad. Chapter 10 of the United Nations Practical Manual on Transfer Pricing relates to country practices. The said Chapter sets out an individual country's view point and its experiences for the information of the readers. The said Chapter does not reflect the view of the Manual. Paragraph 10.1 of the United Nations Practical Manual on Transfer Pricing for Developing Countries reads:- "10.1. Preamble by the Subcommittee on Transfer Pricing: Practical Aspects 10.1.1. In the first nine chapters of this Manual, the Subcommittee has sought to provide practical guidance on the application of transfer pricing rules based on Article 9(1) of the UN Model Tax Co....
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.....1. This question was disposed of by the Hon'ble Jurisdictional High Court by observing as under:- 3. Regarding Question No.(a) (a) It is an agreed position between the parties that the issue raised herein stand concluded against the Revenue and in favour of the Respondent - Assessee. This by the decision of this Court in the case of the same Respondent viz. Principal Commissioner of Income Tax v/s. Manugraph (Income Tax Appeal No. 454 of 2016) rendered on 19 November 2018. (b) The aforesaid decision was rendered following an earlier decision of this Court in the case of CIT v/s. M/s. Everest Kanto Cylinders Ltd. (378 ITR 67). (c) Therefore, for the reasons indicated in the above orders, the question No.(a) does not raise any substantial question of law, Thus not entertained. 19.4. Similar views were expressed by the Hon'ble Jurisdictional High Court in the case of CIT vs. Everest Kanto Cylinder Ltd in Income Tax Appeal No.435 of 2015 dated 18/07/2017; Income Tax Appeal No.294 of 2016 dated 20/07/2018 and in the case of PCIT vs. Manugraph India Ltd in Income Tax Appeal No. 454 of 2016 dated 19/11/2018. Respectfully following the same, we direc....
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.... Supreme Court in the case of CIT vs. United Glass Manufacturing Co. Ltd reported in 28 taxmann.com 429 had stated that club membership fees paid for employees for seeking membership in the clubs and accordingly payment of entrance fees and subscription made thereon are allowable business expenditure u/s.37 of the Act. Similar propositions were also laid down by the Hon'ble Jurisdictional High Court in the case of Otis Elevator Co. India Ltd. vs. CIT reported 195 ITR 682 (Bom). 21.4. Respectfully following the aforesaid decisions, we direct the ld. AO to delete the disallowance made in this regard. Accordingly, the Ground No. 3 raised by the assessee is allowed. 22. The ground No. 4 & 5 raised by the assessee for A.Y. 2007-08 are identical with ground No.4 & 5 raised by the assessee for A.Y. 2006-07 supra. Hence, the decision rendered in A.Y. 2006-07 shall apply mutatis mutandis for A.Y. 2007-08 also. Accordingly, the ground No.4 is allowed and ground No. 5 is dismissed as not pressed. 23. The ground No. 6 raised by the assessee with regard to the claim in respect of amount paid on margin of FCCB, was stated to be not pressed by the ld. AR at the time of hearing. The same ....
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....nion, this provision based on actuarial valuation would be clearly an ascertained liability for the assessee at the end of the year. The ld. AO however, strangely applied the provisions of Section 43B of the Act and held that since the said provision made for post retirement medical benefits had not been actually paid by the assessee, the same would become disallowable in terms of Section 43B of the Act. We are unable to comprehend ourselves to understand this contention of the Revenue. On perusal of the provisions of Section 43B of the Act, this expenditure provision made for post retirement medical benefits would not fall under any of the clauses provided in Section 43B of the Act. It is an admitted fact that no fund is created by the assessee in respect of this post retirement medical benefits. However, since the actuarial valuation report was placed before this Tribunal for the first time to justify the fact that the said provision has been made on a scientific basis by placing reliance on the registered valuation report, and also considering the fact that this report was not in the possession of the lower authorities, we deem it fit and appropriate in the interest of justice a....
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....ssee claiming deduction for provision for wealth tax and provision for advances while computing book profit u/s.115JB of the Act is similar to ground No.14 raised by the assessee for A.Y. 2006-07. Hence, the decision rendered in A.Y. 2006-07 shall apply to this assessment year also. 29. The additional grounds raised by the assessee on 10/12/2015 was stated to be not pressed by the ld. AR at the time of hearing. Hence, the additional grounds is not even taken up for admission and hence dismissed in limine. 30. In the result, appeal of the assessee for A.Y. 2007-08 in ITA No. 8710/Mum/2011 is partly allowed. ITA No.6900/Mum/2012 (A.Y. 2007-08) Assessee Appeal 31. The assessee has raised the following grounds of appeal:- 1. The learned Assessing Officer erred in: A. Passing an order u/s 154 without appreciating that there is no mistake apparent from record. B. Passing an order u/s 154 on the basis of order of Addl. CIT TP- II(2), Mumbai which is without authority of law or as per the provisions of the Income Tax Act. C. Passing an order u/s 154 on the basis of an order of the TPO which was passed after the order of the Dispute Resolution....