TaxTMI 
TaxTMI 
2023 (1) TMI 1320
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....nst the CIT(A)-1, Pune's order dated 29.11.2010 passed in Case No. PN/CIT(A)-1/Addl.CIT, R-1,Pn/217/08-09, in proceedings u/s. 143(3) of the Income Tax Act, 1961 (in short "the Act"). 1.1. Second assessment year 2006-07 involves the assessee's appeal ITA.No.1377/PUN./2010 directed against DCIT, Circle-1(1)'s assessment dated 19.10.2010 framed in consequence to the "DRP" Pune's directions dated 13.09.2010 in proceedings u/s. 144C(13) r.w.s. 143(3) of the Income Tax Act, 1961 (in short "the Act"). 1.2. Third assessment year 2007-08 contains the assessee's appeal ITA.No.1578/PUN./2011 directed against the Addl. CIT, Range-1, Pune's assessment dated 13.10.2011 framed as per the DRP Pune's directions dated 26.09.2011, in proceedings u/s. 143(3) r.w.s. 144C of the Income Tax Act, 1961 (in short "the Act"). 1.3. Fourth assessment year 2008-09 involves assessee's appeal ITA. No. 2596/PUN./2012 directed against the DCIT, Circle-1(1)'s assessment dated 25.10.2012 framed as per the DRP Pune's directions dated 05.09.2012, in proceedings u/s. 143(3) r.w.s. 144C(13) of the Income Tax Act, 1961 (in short "the Act"). 1.4. Fifth assessment year 2008-09 herein comprises of assessee's and Revenue....
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..../2011 raises the following 18 substantive grounds : 1. "The impugned order of the CIT(A) is bad in law, illegal, untenable and contrary to facts and law as enunciated by the Hon. Courts, as the same is based on presumptions and without appreciation of basic facts, it is therefore prayed that the same deserves to be set aside and the valid claims of the appellants allowed in toto. 2. The impugned order of the CIT(A) is untenable as it proceeds to make adhoc disallowance of expenditure purely based on presumptions without citing any specific reasons as to how the expenditure under different heads is not for the business of appellants, and completely ignores to consider the detailed factual explanations offered at the time of assessment and the appellate proceedings. Re: Disallowance of service charges including reimbursements 3. CIT(A) erred in disallowing the appellant's business expenditure representing service charges including reimbursements and restricting the same to the 30% of the claim. 4. CIT(A) erred in disallowing 30% of the Service charges including reimbursements without giving any reasonable basis and proceeded merely on ground that these had been disa....
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....70% of such expenses as it is allowed in the case of service charges paid by the Appellants to CCI Inc. Re: Disallowance of depreciation on coolers: 12. CIT(A) has erred in disallowing the depreciation amounting to Rs. 9,68, 12,420/- on coolers merely on the basis that they were disallowed by the predecessor in the earlier years. 13. The CIT(A) failed to appreciate that the activity of placing coolers directly results in increased sales of appellants products and has a immediate nexus with the business. Further the CIT(A) failed to appreciate that the coolers were placed as part of the joint promotion activity undertaken for appellants business. 14. CIT(A) has failed to appreciate that: (a) The Appellant's sales are directly linked to the sale of the final beverages as the product of the appellant has no other commercial use except as ingredient in the manufacture of beverages. (b) The coolers were an important marketing tool used by the appellants to advertise and create awareness and demand for the products, and that the cost for all the marketing efforts was recovered in the price of concentrate sold to the bottlers. (c) That such expenditure was part of....
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.... purpose of business of the assessee. 4. On the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeals) grossly erred in allowing the assessee, the expense borne by the assessee relating to other business concern, which has resulted in excess debiting of expenses thereby leading to artificially lowering of profits thus causing huge loss to the revenue. 5. For these and such other reasons as may be urged at the time of hearing, the order of the Ld. Commissioner of income-tax (Appeals) may be vacated and that of the Assessing officer be restored. 6. The appellant craves leave to add, amend, alter or delete any of the above grounds of appeal during the course of appellate proceedings before the Hon'ble Tribunal." 6. Learned counsel submits at the outset that the assessee's 1st, 2nd and 18th substantive grounds are general in nature. Rejected accordingly. 7. Next comes the common issue between the parties regarding disallowance of service charges and other reimbursement(s) made by the Assessing Officer to the tune of Rs. 62,58,70,252/- in his assessment order dated 30.12.2008, as restricted to that @ 30% only in the CIT(A)'s order which....
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....its Special Counsel vide letter dated 01.12.2013 who is not present today. We find no reason to adjourn the assessee's instant appeal once it is noticed that all the issues raised herein are covered ones only. We thus reject the Revenue's instant adjournment petition. 13. The assessee appears to have raised its substantive ground nos.1 to 2.1.0 on both corporate as well as transfer pricing issues. It's former substantive ground-1 involving [sub- grounds 1.1 to 1.9] pleads twin grievances of disallowance of advertisement, sales and marketing expenditure as well as depreciation on coolers, involving varying sums. Needless to say, the assessee has already succeeded on both these issues in the first and foremost assessment year 2005-06 in preceding paragraph. The Revenue could hardly pinpoint any distinction on the assessee's arrangement of having incurred advertising and sales promotion expenses followed by its depreciation claim on coolers. We thus see no reason to adopt a different approach in this second assessment year 2006-07. These twin disallowances accordingly stand reversed therefore. 14. Mr. Muralidharan at this stage invited our attention to the CIT(A)'s detailed disc....
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.... 2007-08 in the year 2023, we deem it appropriate to restrict the impugned disallowance of Rs. 94,20,48,306/- to that @ 5% only. Ordered accordingly. 19. It next transpires that the assessee's 2nd substantive grievance of transfer pricing adjustment [sub-grounds 2.1 to 2.18] deserves to be restored back to the learned DRP as we have done in assessment year 2006-07 deduction in preceding paragraph. Both the learned representatives are ad idem during the course of hearing that there is no distinction involved in the impugned assessment year 2007-08 qua the same. We thus adopt judicial consistency to adopt the very course of action herein as well in the same terms. These assessee's 2nd substantive ground stand set aside to the learned DRP for its afresh adjudication as per law. 20. Further there arises purely a legal question in the impugned assessment year regarding the assessee's payments involving advertisement, marketing promotion and marketing support segment [in short "AMP"] expenses. Learned CIT-DR could hardly dispute that case law Maruti Suzuki India Ltd., [2016] 381 ITR 117 (Delhi) has already held that such "AMP" transactions do not amount to an international transaction ....
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....P whereas the latter aspect of "AMP" expenses has to be decided against the department as per our detailed discussion in preceding paragraph. We order accordingly. 26. This appeal ITA.No.815/PUN./2014 is partly accepted in above terms. ITA.No.516/PUN./2015 - A.Y. 2010-11 [ Assessee's appeal] : 27. Sixth assessment year 2010-11 involves assessee's and Revenue's cross-appeals ITA. No. 516 & 539/PUN./2015. 28. We note at the outset that both these parties raise their first and foremost identical substantive ground qua issue of expenditure of reimbursements which we have already decided in assessee's favour and against the Revenue. We thus reject the Revenue's instant cross-appeal ITA.No.539/PUN./2015 for this precide reason alone by adopting judicial consistency. 29. The assessee's remaining twin substantive grounds of depreciation on coolers and under corporate tax and ALP adjustment on advertising and marketing promotion "AMP" are accepted as per our detailed discussion on the very issues in the preceding paragraph. The assessee's instant appeal ITA.No.516/PUN./2015 succeeds therefore. ITA.No.822/PUN./2016 - A.Y. 2011-12 [Revenue's appeal] ITA.No.830/PUN./2016 - A.Y. 2011-1....