TaxTMI 
TaxTMI 
2025 (5) TMI 429
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....e by this consolidated order for the sake of convenience. We take ITA No.78/Kol/2018 for the Assessment Year 2013-14 as the lead case and the result of which will apply mutatis mutandis to all the other appeals. 3. Grounds of appeal raised by the assessee in ITA No. 78/Kol/2018 read as under: "1. That, on the facts and in the circumstances of the case, impugned order of assessment under section 143(3) read with section 144C(13) of the Act, is contrary to law laid down by courts, based on extraneous consideration, unsubstantiated presumptions, ignoring to consider all relevant facts and relevant law, bad in law and violative of principles of natural justice. 2. That, on the facts and in the circumstances of the case, the AO erred on facts and in law in computing the total income of the appellant at Rs 2,070,635,140 against the returned total income of Rs. 547,399,361. 3(a). That, on the facts and in the circumstances of the case, Transfer Pricing Officer ('TPO')/DRP/AO erred in relying on extraneous consideration, unsubstantiated presumptions in holding that expenditure towards advertisement, marketing and promotion ('AMP'), unilaterally inc....
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....TPO have erred in not following the directions of the DRP which is binding as per the provisions of section 144C(10) of the Act by not reducing expenses in connection with sales promotion. 3(i) Without prejudice to above grounds of appeal, on the facts and in the circumstances of the case, the AO/ TPO/ DRP have erred in not excluding the reversal of the advertisement expenses credited by the appellant under the head 'Other Income' for A Y 2013-14 in computing the alleged AMP expenditure. 3(j) Without prejudice to above grounds of appeal, on the facts and in the circumstances of the case, the AO/ TPO/ DRP have erred in ignoring reasons furnished by the appellant with respect to selection of appropriate set of comparable companies in light of detailed analysis of comparability factors and matching FAR profile. Further, the DRP has erred in upholding certain comparable companies selected by the TPO for benchmarking the alleged AMP expenditure. 3(k) Without prejudice to above grounds of appeal, on the facts and in the circumstances of the case, the AO/ DRP have erred in upholding the action of the TPO that the assessee has rendered brand promotion services to....
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....essee with respect to manner in which support/ benefit has been received with respect to the said brands from the AEs. 4(e) Whether on the facts and in the circumstances of the case, the DRP/ TPO erred in making an adjustment of Rs. 26,851,761 by treating the royalty paid by the assessee with respect to sale of imported goods as NIL. 5(a) That, on the facts and in the circumstances of the case, TPO/ DRP/ AO erred in making an adjustment of Rs. 13,413,665 with respect to Research & Development ('R&D') services. 5(b) That, on the facts and in the circumstances of the case, DRP has erred in stating that TPO has provided reasons in respect of the comparable selected by him. 5(c) Whether on the facts and in the circumstances of the case, TPO/ DRP/ AO erred in not appreciating the specific objections raised by the appellant against the set of comparable companies chosen by the TPO. 5(d) Whether on the facts and in the circumstances of the case, DRP has erred in upholding the order of the TPO in rejecting companies selected by the Assessee for the purpose of benchmarking the transaction of provision of Research & Development services. ....
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.... the TPO/ AO erred in applying Resale Price Method ('RPM') and holding that closer product comparability is not essential. 7(e) Whether on the facts and in the circumstances of the case, the TPO have erred in selecting companies engaged in import of products with different profile from the products imported by the assessee. 7(f) Whether on the facts and in the circumstances of the case, the DRP/ TPO have erred in rejecting the use of multiple year data for analysis and determining the arm's length margin. 8(a) That, on the facts and in the circumstances of the case, the TPO/ DRP erred in making an adjustment of Rs 9,279,769 on account of chargeback at cost, of expenses incurred by the appellant on behalf of its AEs and treating the same as 'market support services'. 8(b) That, on the facts and in the circumstances of the case, the TPO/ DRP erred in not appreciating that charging of mark-up of 9.23% is not required since the expenses are incurred on behalf of AEs for merely facilitation purpose and the same cannot be treated as rendering of 'market support services'. 8(c) That, on the facts and in the circumsta....
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....nder sections 80-IB and 80-IC of the Act has been accepted by the Learned Commissioner of Income Tax (Appeals) in AYs 2005-06, 2008-09 & 2009-10 and by the Hon'ble DRP itself in AYs 2010-11, 2011-12 and 2012-13. 11(a) That, on the facts and in the circumstances of the case, the DRP/ AO erred in holding that scrap sales of Rs 79,053 earned by the Appellant and allocated to eligible undertaking(s) is not eligible for deduction under sections 80-IB and 80- IC of the Act on the ground that the same is not 'derived from' the eligible undertaking(s). 11(b) That, on the facts and in the circumstances of the case, the DRP/ AO erred in not appreciating the fact that scrap generated has direct nexus with the manufacture of the final product in the units and sale of such scrap reduces the cost of production and hence, has direct nexus with the business income of the eligible undertaking(s). 11(c) That on the facts and circumstances of the case, the DRP/ AO erred in not appreciating the fact that the deduction claimed by the Appellant under section 80-IB and 80-IC of the Act are supported by the Auditor's Certificate in Form 10CCB. 11(d) That....
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....esulting into increase of the total income assessed. Assessee raised its objection before the Ld. DRP who had given its directions which were incorporated in the assessment completed by the Ld. AO for which the assessee is in appeal before the Tribunal. We will deal with the grounds seriatim. 5. Ground nos.1 and 2 are general in nature as submitted by the Ld. Counsel for the assessee. Accordingly, they are not adjudicated upon and are dismissed. 6. Ground no.3(a) to 3(m) are in respect of upward adjustment made for advertisement, marketing and publicity expenses (AMP) of Rs. 98,82,14,885/-. 6.1 At the outset, Ld. Counsel for the assessee submitted that in the assessee's own case for the immediately preceding two years i.e. AY 2010-11 and 2011-12 in ITA Nos. 404/Kol/2015 and 625/Kol/2016 dated 17.06.2020, the Coordinate Bench of ITAT, Kolkata has dealt with this identical issue holding in favour of the assessee that AMP expenses is not an International Transaction. The relevant extract on the finding given by the Coordinate Bench in this respect is reproduced as under: "25.We heard both the parties and carefully gone through the submission put forth on behalf of th....
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....ectronics India Pvt .Ltd Vs ACIT, Cir-3, Noida ITA No.5140/Del/2011,held that such brand promotion was to be treated as international transaction u/s 92B of the Act. The TPO applied Bright Line test (BLT) and after applying mark up of 12.27%, based on margin of entities carrying out marketing and advertising activities, made ALP adjustment of Rs. 104,43,39,401/-.We note that in the case of LG Electronics (supra), the Indian company was acting on behalf of/for the benefit of Korean company and had 'no autonomy' in decisions Relating to expenditure incurred on marketing and promotion. In the assessee's case, the assessee company was not under any obligation to incur AMP expenses and also its parent company had no control over such decisions of RBIL. The activities of brand promotion were a global marketing and sales promotion strategy of the parent called "Blue Ocean Strategy", which is not the fact in the case of RBIL. There is no transaction/undertaking/agreement between RBIL and its AE, as different from that which was existed in LG Electronics case(supra). Therefore, assessee company`s case cannot be compared with LG Electronics case (supra). 26. We note that incurre....
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....redible test in the context of TP provisions to determine whether the Indian subsidiary is incurring AMP expenses unilaterally on its own or at the instance of the AE is to find out whether an independent party would have also done the same." It is asserted: "An independent party with a short term agreement with the MNC will not incur costs which give long term benefits of brand & market development to the other entity. An independent party will, in such circumstances, carry out the function of development of markets only when it is adequately remunerated for the same." 67. Reference is made by Mr. Srivastava to some sample agreements between Reebok (UK) and Reebok (South Africa) and IC Issacs & Co and BHPC Marketing to urge that the level of AMP spend is a matter of negotiation between the parties together with the rate of royalty. It is further suggested that it might be necessary to examine whether in other jurisdictions the foreign AE i.e., SMC is engaged in AMP/brand promotion through independent entities or their subsidiaries without any compensation to them either directly or through an adjustment of royalty payments. Absence of a machinery provision ....
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....stment involves substitution of the transaction price with the ALP. Rules 10B, 10C and the new Rule 10AB only deal with the determination of the ALP. Thus for the purposes of Chapter X of the Act, what is envisaged is not a quantitative adjustment but only a substitution of the transaction price with the ALP. 70. What is clear is that it is the 'price' of an international transaction which is required to be adjusted. The very existence of an international transaction cannot be presumed by assigning some price to it and then deducing that since it is not an ALP, an 'adjustment' has to be made. The burden is on the Revenue to first show the existence of an international transaction. Next, to ascertain the disclosed 'price' of such transaction and thereafter ask whether it is an ALP. If the answer to that is in the negative the TP adjustment should follow. The objective of Chapter X is to make adjustments to the price of an international transaction which the AEs involved may seek to shift from one jurisdiction to another. An 'assumed' price cannot form the reason for making an ALP adjustment. 71. Since a quantitative adjustment is not....
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....ortion constituting the 'compensation' owed to the Indian entity by the foreign AE. In such a scenario what will be required to be benchmarked is not the AMP expense itself but to what extent the Indian entity must be compensated. That is not within the realm of the provisions of Chapter X. 74. The problem with the Revenue's approach is that it wants every instance of an AMP spend by an Indian entity which happens to use the brand of a foreign AE to be presumed to involve an international transaction. And this, notwithstanding that this is not one of the deemed international transactions listed under the Explanation to Section 92B of the Act. The problem does not stop here. Even if a transaction involving an AMP spend for a foreign AE is able to be located in some agreement, written (for e.g., the sample agreements produced before the Court by the Revenue) or otherwise, how should a TPO proceed to benchmark the portion of such AMP spend that the Indian entity should be compensated for? 75. As an analogy, and for no other purpose, in the context of a domestic transaction involving two or more related parties, reference may be made to Section 40A(2)(a) u....
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....at the ld TPO, ld AO and the ld DRP had categorically accepted the basic fact that the assessee is a manufacturer and also engaged in distribution of products. While this is so, we are not able to comprehend the argument advanced by the ld DR that assessee is only a distributor and thereby the decision of Sony Ericsson would apply to the case. We find that since the assessee is a manufacturer cum distributor as accepted by the lower authorities, the decision rendered in Maruti Suzuki supra would be applicable to the assessee's case, since the contention of the ld DR that assessee is only distributor, is not emanating from the records of the lower authorities. We find that the issue under dispute before us is squarely addressed by this tribunal in assessee's own case for the Asst Year 2011-12 supra wherein it was held :- "43. We have heard the rival submissions and perused the materials available on record. The preliminary issue here arises whether the AMP expenses constitute the international transactions so as to attract the provisions of transfer pricing of the Income Tax Act, 1961. The claim of the Ld. AR is that the AMP transaction does not represent the international ....
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....43,39,401/- for A.Y.2010-11 and Rs. 331,09,56,767/- for A.Y. 2011-12." 6.2. Before us, ld. Counsel submitted that there is no material change in the facts of the present case vis-à-vis the earlier two preceding years as well as in the applicable law and, therefore, this issue is squarely covered in favour of the assessee by the said decision. 6.3 Considering the facts of the present case and the applicable law as well as the recent decision of Coordinate bench in assessee's own case for the preceding two years as extracted above, we are in agreement that AMP is not an International Transaction and thus, delete the ALP adjustment made in this respect of Rs. 93,82,14,885/-. Accordingly, these grounds taken by the assessee in this respect are allowed. 7. Ground Nos.4(a) to 4(e) are relating to ALP adjustment of Rs. 14,99,95,332/- made on account of payment of royalty. 7.1 At the outset, Ld. Counsel for the assessee submitted that in the assessee's own case for the Assessment Year 2012-13 in ITA No.619/Kol/2017 dated 20.07.2023, the Coordinate Bench of ITAT, Kolkata has dealt with this identical issue holding in favour of the assessee. The relevant extract on the fin....
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....r these imported products and part with only nominal profit margin. Gradually, manufacturing of these products by the assessee locally grows, by setting up manufacturing facilities. Assessee submitted that imported products are marketed and sold by the assessee locally on which it pays royalty to the licensors. Further, it was submitted that products manufactured locally by the assessee on the basis of know-how from the AEs and also exported to the other group entities depending upon their demands. On export sale of its products which are manufactured locally in India, assessee does not pay any royalty to the licensors under the licensing agreements. Assessee thus contended that from the import of finished goods, it is able to earn overall gross margin of 17.31% and is thus creating local demands for these products and at the same time is able to earn better margins inspite of paying royalty for the use of its AEs IPRs. 9.3. AO/TPO did not accept the submission of the assessee and took it as Nil by applying Comparable Uncontrolled Price (CUP) method by holding that with the imported goods, the payment of royalty is embedded and thus, an upward adjustment of royalty was mad....
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....by the laws for the time being in force in India. (ii) Royalty equivalent to 8% on exports from India or such other percentage as may be permitted by the laws for the time being in force in India. Any costs either directly or indirectly paid by the Licensee for any and all costs including legal services in relation to any Intellectual Property Rights owned by an RB group entity including without l imitation for advise, registry related work, litigation (both civil and criminal counterfeit actions and raid, administrative action, may be deducted from the royalty provided that the Licensee supplies evidence of such payments to the Licensor. The claims for the royalty shall arise at the time of Products sold leave the premises of the Licensee. 6.2. Net sales shall be in accordance with law for the time being in force in India. Article 7 Payment 7.1. A calculation of the amount of royalties due according to article 6 above shall be made at the end of each calendar half year. The Licensee shall send a complete statement by the 20th of the month following a calendar half year and shall transfer the corresponding amount within the same....
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....ounsel thus claimed for application of principle of consistency for which he placed reliance on the decision of Hon'ble Supreme Court in the case of Radhasoami Satsang Vs. CIT [ 1992] 193 ITR 321 (SC). In this respect, he submitted that this principle has been appreciated and upheld by the Coordinate Bench in assessee's own case for the preceding two assessment years (supra). 9.8. Ld. Counsel also contended that it is not within the jurisdiction of the Ld. TPO to test the commercial expediency of an international transaction by applying the benefit test and taking the transaction value at nil. On this contention, he again placed reliance on the decision of Coordinate Bench in assessee's own case for the preceding two assessment years (supra). 9.9. Ld. Counsel reiterated to accept the business model in respect of payment of royalty on the import of finished goods by submitting that as per terms of the license agreement between the assessee and its AE, assessee enjoys the right to manufacture (in own factory) the licensed goods or get the same manufactured from other contractors. Accordingly, the rights granted by the licensor to assessee in respect of all licensed ....
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....nd distribution of products. In consideration of the rights and Intellectual Property Rights granted by the Licensor under this Agreement, the Importer is required to pay royalty to the Licensor on the basis of Net sales of products sold in India/exported from India. 20.1 Guidelines to make addition of royalty to the assessable value of imported goods are enshrined in Rule 10(1)(c) of the Valuation Rules, 2007. The said Rule provides that in determining the transaction value, royalties and license fees related to the imported goods that the buyer is required to pay, directly or indirectly, as a condition of the sale of the goods being valued, to the extent that such royalties and fees are not included in the price actually paid or payable; shall be added to the price actually paid or payable for the imported goods. Explanation:- Where the royalty, license fee or any other payment for a process, whether patented or otherwise, is includible referred to in clauses (c) and (e), such charges shall be added to the price actually paid or payable for the imported goods, notwithstanding the fact that such goods may be subjected to the said process after importation of such....
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....erprises (AEs) are concerned. It is a well settled legal position that factual matters which permeate through more than one assessment year, if the Revenue has accepted a particular view or proposition in the past, it is not open for the Revenue to take an entirely contrary or different stand in a later year on the same issue, involving identical facts unless and until a cogent case is made out by the TPO/ Assessing Officer on the basis of change in facts. For that we rely on the order of the Hon'ble Supreme Court in Radhasoami Satsang vs. CIT 193 ITR 321 (SC). We are of the view that the above cited precedent on principle of consistency is squarely applicable to the assessee under consideration. In the facts of the assessee's case, the Ld. TPO has not pointed out the change in facts or any provision of law which led him to take a view contrary to the view taken by his predecessors in previous years. We note that the assessee has been paying royalty to its Associate Enterprises(AEs) for a number of years which has been allowed in the assessment of earlier years. Therefore, the TPO cannot take a contrary view and disturb the settled facts unless there is a ....
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....wed." 7.2 Considering the facts of the present case and the applicable law as well as the recent decision of Coordinate bench in assessee's own case in ITA No.619/Kol/2017 for the Assessment Year 2012-13 as extracted above, we are in agreement that we delete the upward adjustment in respect of payment of royalty of Rs. 14,99,95,332/-. Accordingly, grounds 4(a) to 4(e) are allowed. 8. Ground nos.5(a) to 5(f) are in respect of upward adjustment of Rs. 1,34,13,665/- for R&D services. 8.1 At the outset, Ld. Counsel for the assessee submitted that in the assessee's own case for the Assessment Year 2012-13 in ITA No.619/Kol/2017 dated 20.07.2023, the Coordinate Bench of ITAT, Kolkata has dealt with this identical issue has remanded back to the file of Ld. TPO. The relevant extract on the finding given by the Coordinate Bench in this issue is reproduced as under: "11. Ground no. 5(a) to 5(c) is in respect of upward adjustment of Rs. 1,12,45,571/- for R&D services. In the Transfer pricing assessment, ld. TPO rejected certain comparables selected by the assessee owing to difference in functions, assets, risk (FAR analysis). Assessee raised the objections and submitted that....
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....this respect to justify its benchmarking of ALP of the transaction. Accordingly, ground nos. 5(a) to 5(c) are allowed for statistical purposes." 8.2 Considering the facts of the present case and the applicable law as well as the recent decision of Coordinate bench in assessee's own case in ITA No.619/Kol/2017 for the Assessment Year 2012-13 as extracted above, we find it proper to remit the matter back to the file of Ld. TPO. Accordingly, ground nos. 5(a) to 5(f) are allowed for statistical purposes. 9. Ground nos. 6(a) to 6(e) are in respect of adjustment made towards IT support services, amounting to Rs. 2,36,40,014/-. 9.1 At the outset, Ld. Counsel for the assessee submitted that in the assessee's own case for the Assessment Year 2012-13 in ITA No.619/Kol/2017 dated 20.07.2023, the Coordinate Bench of ITAT, Kolkata has dealt with this identical issue has remanded back to the file of Ld. TPO. The relevant extract on the finding given by the Coordinate Bench in this issue is reproduced as under: "12. Ground no. 6(a) to 6(d) is in respect of adjustment made towards IT support services, amounting to Rs. 5,04,00,731/-. This is also the issue similar to the ground ra....
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....ny further details in this respect to justify its benchmarking of ALP of the transaction. Accordingly, grounds 6(a) to 6(d) are allowed for statistical purposes." 9.2 Considering the facts of the present case and the applicable law as well as the recent decision of Coordinate bench in assessee's own case in ITA No.619/Kol/2017 for the Assessment Year 2012-13 as extracted above, we find it proper to remit the issue back to the file of Ld. TPO. Accordingly, ground nos. 6(a) to 6(e) are allowed for statistical purposes. 10. Ground nos. 7(a) to 7(f) are in respect of import purchases of finished goods from the AEs for which an upward adjustment of Rs. 12,10,78,342/- has been made. 10.1 At the outset, Ld. Counsel for the assessee submitted that in the assessee's own case for the Assessment Year 2012-13 in ITA No.619/Kol/2017 dated 20.07.2023, the Coordinate Bench of ITAT, Kolkata has dealt with this identical issue has remanded back to the file of Ld. TPO. The relevant extract on the finding given by the Coordinate Bench in this issue is reproduced as under: "14. Ground nos. 8(a) to 8(e) are in respect of import purchases of finished goods from the AEs for which an upw....
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....or statistical purposes. 11. Ground nos.8(a) to 8(e) are in respect of adjustment made for mark-up of recovery and expenses amounting to Rs. 92,79,769/-. 11.1 At the outset, Ld. Counsel for the assessee submitted that in the assessee's own case for the Assessment Year 2012-13 in ITA No.619/Kol/2017 dated 20.07.2023, the Coordinate Bench of ITAT, Kolkata has dealt with this identical issue has remanded back to the file of Ld. TPO. The relevant extract on the finding given by the Coordinate Bench in this issue is reproduced as under: "15. Ground nos. 9(a) to 9(d) is in respect of adjustment made for mark-up of recovery and expenses amounting to Rs. 3,08,33,644/-. 15.1. In this respect, Ld. TPO observed that assessee has recovered expenses from its AEs which are in the nature of services provided in helping the AEs in the legal affairs and arranging for the trained manpower. He thus, treated this as support service and bench-mark by using the comparable companies to arrive at Profit Level Indicator (PLI) of 18.17%. Assessee had furnished details of expenses along with debit notes supporting invoices explaining the nature of expenses. However, according to the a....
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....to 9(c) refer to upward adjustment of Rs. 1,73,34,721/- towards allocation of expenses. 12.1 At the outset, Ld. Counsel for the assessee submitted that in the assessee's own case for the Assessment Year 2012-13 in ITA No.619/Kol/2017 dated 20.07.2023, the Coordinate Bench of ITAT, Kolkata has dealt with this identical issue has remanded back to the file of Ld. TPO. The relevant extract on the finding given by the Coordinate Bench in this issue is reproduced as under: "16. Ground nos. 10(a) to 10(d) refer to upward adjustment of Rs. 4,64,94,723/- towards allocation of expenses. 16.1. In this respect, Ld. TPO held that these costs are on account of stewardship activity and applied CUP method by taking transactional value at nil. Ld. DRP upheld the upward adjustment by taking into account the benefit test. While making the aforesaid upward adjustment, ld. TPO found the submissions made by the assessee is not tenable by observing the following: "In the absence of any material on record regarding as to how the cost has been allocated. It is also known whether the assessee has requested for such services. The assessee has not able to produc....
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....n this issue is reproduced as under: "Grounds relating to Corporate Tax issue 38. Summarized ground No. 1 of corporate tax issue reads as follows: "1. Apportionment of expenses between fiscal units, non-fiscal units and head office of Rs. 261,160,962/-. This ground covers ground No.8 of revenue`s appeal in ITA No.529/Kol/2015 for A.Y. 2010-11 and ground nos. 1 and 2 of revenue`s appeal in ITA No.518/Kol/2016 for A.Y.2011-12." 39. When this issue was called out for hearing, the ld. Counsel for the assessee invited our attention to the order dated 20.04.2018, passed by the Tribunal in assessee's own case in I.T.A. Nos. 2138/Kol/2009, for assessment year 2005-06, whereby the issue of apportionment of expenses between fiscal units have been discussed and adjudicated in favour of the assessee. The ld. Counsel for the assessee submitted that the present issue is squarely covered by the above said order of the Tribunal, a copy of which is also placed before the Bench. 40. The ld. DR relied upon the orders of the authorities below. 41. We see no reason to take any other view of the matter then the view so taken by the division ....
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....ees at the corporate office who are directly involved in the management of these eligible units like production, procurement, quality, logistics etc. to the total number of employees at the corporate office. According to the assessee these expenses primarily relates to the corporate office of the company. The benefit of which is derived by the whole organization including the eligible units, the allocation of cost incurred on account of residual cost among eligible and non-eligible units should have to be done in the ratio of eligible workers of eligible undertakings to the total number of workers across all the manufacturing units. The Assessing Officer, however, was of the following views: "Regarding the issue of bifurcation of residual cost as has been discussed in detail in the earlier part of the order, the assessee has not applied the provisions of section 80IB of the Act properly especially sub-section (5) thereof which dearly states that the profit of the eligible unit has to be determined as if this is the only source of income of the assessee. The profit of the eligible unit has to be calculated in such a way as if this is the only source of income of th....
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.... actuals are in the percentage of almost average of 22% whereas the percentage of these particular expenditures are around 5.69%. This itself proves beyond doubt that this expenditure has not been bifurcated properly by the assessee company. Moreover, the assessee's arguments that the accounts of the company are audited does not have a bearing on the deduction being claimed u/s 80IB/IC of the Act. The income- tax Act specifically provides that the profits of these undertakings is required to be computed in the manner as if these are independent and only source of income of the assessee company. This effect has probably not been given by the auditor who has filed the accountants report along with claim of deduction. This is also proved by the fact that this has not been mentioned by the auditor who has submitted the accountants report as per the provisions of section 80IB/IC as to the procedure for bifurcating the expenditure for the eligible units. In view of this, there is no force in the assessee's arguments and the same are rejected. The assessee was asked to furnish the revised working after allocating the residual cost in the manner as detailed above whic....
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....ss: Allocation of residual cost as per assessment order 1.146.68 76.16 1,561.31 83.16 2,160.77 229.19 1,526.09 64.73 6,394.85 453.24 Less: Allocation of bad debt not allocated to eligible units 1,070,52 0.22 1,478.15 0.24 1,931.58 0,67 1,461.35 0.19 5,941.61 1.32 Revised deduction 1,070.30 1,477.91 1,930.91 1,461.17 5,940.29 It can be seen from the above Chart that the allocation done by the assessee on the basis of number of employees who are directly linked with the factory operation is more logical. The residual cost is incurred at the head office and is not capable of being identified with any of the units which are running by the assessee. It is only because of this difficulty that the Assessing Officer and the assessee resorted to allocation of residual cost. When it comes to allocation of residual cost, it cannot be done arbitrarily. The allocation should have due regard to the efforts put at the head office level to be eligible. That can be done only by allocation on the basis of number of employees linked to factory operation divided by total number of employees into corporate office into sales of t....
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....er dated 23.12.2014, passed by the Hon'ble Calcutta High Court in assessee's own case in GA No. 1420 of 2014, ITAT No. 41 of 2014, whereby the issue of eligibility of income from sale of scraps have been discussed and adjudicated in favour of the assessee. The ld. Counsel for the assessee submitted that the present issue is squarely covered by the above said order of the, Hon'ble Calcutta High Court, a copy of which is also placed before the Bench. 45. The ld. DR relied upon the orders of the authorities below. 46. We see no reason to take any other view of the matter then the view so taken by the decision of Hon'ble Calcutta High Court in assessee's own case vide order dated 23.12.2014. In this order, the Hon'ble Calcutta High Court has inter alia observed as under: "On the question raised by the revenue in its appeal,- we 2 decision thereon by the High. Court of Madras in Fenner (India) Ltd. (supra) relied on by- the revenue in urging its case regarding the question formulated in the assessee's appeal. In paragraph 13 of the said decision the High Court, of Madras held as follows "13. As already stated, in the Industrial undertaking in the ....
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....of tax towards payment of dividend. 15.1 At the outset, Ld. Counsel for the assessee submitted that in the assessee's own case for the Assessment Year 2012-13 in ITA No.619/Kol/2017 dated 20.07.2023, the Coordinate Bench of ITAT, Kolkata has dealt with this identical issue has remanded back to the file of Ld. TPO. The relevant extract on the finding given by the Coordinate Bench in this issue is reproduced as under: "18. On the first additional ground relating to non-granting of benefit of Double Tax Avoidance Agreement (DTAA) between India- UK and India- Spain respectively, qua the right of tax towards payment of dividend to the shareholders, assessee has raised this additional ground to claim that while distributing dividend to the non- resident shareholders, the beneficial right of tax as per the applicable India- UK and India- Spain DTAA should have been applicable. Assessee draws force on it contention by placing reliance on the decision of Coordinate Bench of ITAT Delhi in the case of Gieseckc & Devrient (India) Pvt. Ltd. Vs. ACIT [ 2020] 120 taxmann.com 338 (Del. Trib.). Ld. Counsel for the assessee submitted that in the immediately preceding year this issue has ....
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....2019 for the Assessment Year 2015-16. Hence, we proceed to adjudicate the Ground No.8 in ITA No. 2631/Kol/2019. 17. ITA No. 2631/Kol/2019 - Ground No.8 - The issue raised by the assessee is relating to disallowance of Rs. 5,43,74,993/- made u/s 14A r.w.r 8D whilst computing the book profits u/s 115JB of the Act, was not proper. 17.1 On this context, the Learned. AR stated that This issue is no longer res-integra and has been decided in the favour of the Assessee by High Court of Delhi [PCIT v. Moon Star Securities Trading & Finance Co. Pvt. Ltd., [2024] 469 ITR 15 (Delhi HC)] as well as Karnataka [Sobha Developers Ltd. v. DCIT, [2021] 434 ITR 266 (Karnataka HC) and by jurisdictional Tribunal in the case of DCIT v. Century Plyboards (L) Ltd., [2021] 123 taxmann.com 256 (Kolkata-Trib). The Coordinate Kolkata Bench of the Tribunal in the case of DCIT vs. Century Plyboards (L) Ltd. has held as under: "8. With regard to disallowance u/s 14A of the Act read with rule 8D while computing the book profits u/s115JB of the Act, we note that there is no enabling provision in clause (f) of Explanation 1 to section 115JBfor making any adjustment in respect of expenditure disallowe....
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.....8 of the assessee's appeal in ITA No.2631/Kol/2019 is allowed. 18. In the result, the appeals of the assessee are partly allowed for statistical purposes. Order pronounced on 18th March, 2025. ============= Document 1 Deskil Benchiaer (india) Limted (' ABR.") Assessment Year 2005-06 Details of bad debts and allhor chargos willon oll during tha yÆ°á»›t Dubbars' Notve Address 1 Aascent (Rs) Year ('FY"] ok Financial chedi JUNGJA STORES JUNEJA BHAWAN, GADMI BAZAR, ANDKAPUR 1,022 FY 2000-03 MOCI GENERAL STORE BALDEO CHOWK, PANNA GOSS FY 2002-03 KAMDAN DISTRIBUTOR IS TAWA COMPLEX,E-S.MITTON MKT, ABERTA COLONY, BHOPAL 5,007 FY 2000-03 Saatiya Agencies TROP NO. 1 4 5, VATAN A HINAS, NEAR MAHILA BANK, GOLE COLOHY, NASEC CITY 4,078 FY 2000-01 Aubini Troder 137.0.NEW SINOE & COLONY, PFRAFIA ROAD, BHOPAL -18 187,048 FY 2002-03 DURGA ENTERPRISE 523, G.T. ROAD, MAHESH,SREERAM PUR. HOOGHLY/ WEST BENGAL 7,729 FY 2002-03 DURDWAN, WEST BENGAL 1,236 FY 2003-03 SAHA BROTHERS MADHARITALA, P.O.KATWA, DIST-BURUWAN (W.B.), KATWWWWEST BENGAL 8,378 1,268 FY 2002-03 DAS BROTHERS MAIN ROND, PATHERKANOL KARIMGANJ, ASSAM - 788724 FY 2002-93 EG AGENCESOPVIX SU....