TaxTMI 
TaxTMI 
2025 (6) TMI 1214
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....ble to be quashed. Transfer pricing grounds - Adjustment under Section 92CA of the Act 2. In making an upward transfer pricing adjustment to the extent of Rs 19,80,000 by re-computing the Arm's Length Price (ALP) of the international transaction pertaining to provision of non-binding investment advisory and support services (IA services) by the Appellant to its associated enterprises (AEs), inter alia, on following grounds: a) Rejecting the transfer pricing documentation maintained by the Appellant in accordance with provisions of the Act read with the Income-tax Rules, 1962 (Rules); and b) Including the carried interest received by the employees of the Appellant in the cost base of the Appellant for the purpose of charging cost plus markups for provision of IA services; 3. In making an upward transfer pricing adjustment to the extent of Rs 23,32,37,536 by re-computing the Arm's Length Price (ALP) of the international transaction pertaining to provision of Information Technology enabled Services (ITeS) by the Appellant to its associated enterprises (AEs), inter alia, on following grounds: a) Rejecting the transfer pricin....
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....5-16 where the amount of ESOP cost was allowed as a deductible expenditure in the year of amortization Without prejudice to the above, where your Honours seek to uphold the action of the learned AO. a deduction with respect to the amount actually paid for the value of shares delivered should be granted to the Appellant. In this regard, the learned AO has erred in disregarding the directions of the Hon'ble DRP with respect to allowability of the amount actually paid by the Appellant for the ESOP cost during the year under consideration. 5. In disallowing an amount of INR 14,22,465 paid to Bombay stock exchange and National stock exchange (stock exchanges) for non-confirmation of clearing house trades, client code modification etc. on the basis that the payment made is in the nature of penalties/ fine which cannot be allowed as an expenditure under section 37 of the Act, relying on the DRP directions issued for AY 2016-17. In disregarding the Hon'ble Bombay High Court's decision in Appellant's own case for AY 2008-09 and AY 2009-10 and the decisions by the Hon'ble ITAT in appellant's own case for AY 2008-09, AY 2009-10, AY 2010-11, A....
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....ial valuation report submitted by the Appellant during the assessment proceedings evidencing the payment of gratuity and not following the directions of the Hon'ble DRP with respect to verification of the amount paid by the Appellant towards gratuity during the year under consideration. 8. In mentioning the incorrect amount of deemed total income under section 115JB of the Act and tax thereon in the computation sheet attached with the final assessment order. 9. In levying the additional interest under section 234C of the Act without appreciating that the interest under section 234C of the Act is to be calculated on the returned income filed by the Appellant as per the provisions of the Act.\ 10. In initiating penalty proceedings under section 270A of the Act." 2. Rival submissions of both the parties have heard and record perused. The learned authorised representative (ld. AR) of the assessee submits that he is not pressing ground no. 2 & 3 of the appeal and same may be dismissed as not pressed. Considering the submissions of ld AR of the assessee ground No. 2 & 3 of the appeal are dismissed as not pressed. 3. Ground no. 4 relates to disallowanc....
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....d to make a similar addition as per discussion in the order at pages 3 to 11 vide paras 5 to 5.6. The AO noticed that it is a recurring issue. He, accordingly, disallowed the net amount on account of amortization of RSU expenses. The DRP relying upon the judicial precedent as available in the case of PVP Ventures Ltd. (2 012) 211 taxman 554 of the Madras High Court, decision of the Special Bench, Bangalore in Biocon; and Delhi Bench in Ranbaxy Laboratory 124TTJ 771 etc. considering the specific facts deleted the addition. Revenue is aggrieved. 48. The ld. CIT-DR relies upon the order of the AO. 49. The ld. AR relies upon the impugned order. 50. In the light of the submissions of the parties before the Bench we find that the specific findings of facts have not been upset by the Revenue. The facts as enumerated and the position qua the specific plan as appreciated by the DRP in para 5.2.1 we note remains unrebutted. Considering the judicial precedent in para 5.2.2 to para 5.2.4 which also remaining unrebutted, we find no infirmity with the conclusions drawn. For the sake of completeness, we reproduce the relevant findings on facts being upheld by us : ....
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....ee to GSGI is determined with reference to the value of the shares of GSGI as on the date of vesting of the RSUs. * As the Assessee is required to pay aforesaid sum to GSGI on account of the grant of the RSUs to its employees, such payment being an actual expenditure for the Assessee is considered as part of the compensation cost of the employees in the year in which it is incurred in accordance with the method of accounting followed 5.2.2 Therefore, the ESOP expenses should not be regarded as contingent or notional and it should be allowed as deduction u/s 37(1) of the IT. Act. The appellant had relied on the decision of DCIT v Accenture Services P Ltd [ITA No. 4540/M/08 order dated 23rd March 2010] and Novo Nordisk India Private Limited v DCIT -12(2) (ITA No.1275/Bang/2011) (Bang Trib). 51. The departmental grounds, accordingly, fail. 52. In the result, appeal of the Revenue is dismissed. 53. In the result, appeal of the assessee is partly allowed for statistical purposes and the appeal of the Revenue is dismissed." 6. Considering the consistent decision of Tribunal in favour of assessee in its own case and respectfully following th....
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.... High Court in assessee's own case for A.Y. 2008-09 and 2009-10 in ITA No. No. 30 of 2017 dated 10.06.2019 by passing the following order: "38. We have heard the submissions and seen the record. It is seen that the facts are discussed in para 6 to 6.6 at pages 11 to 17 by the AO in the draft assessment order wherein for payment of Rs. 10,21,507/- to the Stock Exchange as fine for non compliance of clearing house trades, code modification etc. the amount was added to the computation of income of the assessee. The AO relying upon similar factual position Considering the decision of Hon'ble Jurisdictional High Court in assessee's own case on similar disallowance and respectfully following the same, ground no. 5 of the appeal is allowed in favour of the assessee.as available in 2008-09 and 2009-10 assessment years. This position stood confirmed by the DRP also and hence it was directed that the addition of the said amount should be maintained. The submissions advanced on behalf of the assessee that it was not a fine/penalty in the true sense of the word and that infact these were payments for procedural lapses occuring on account of non confirmation of clearing house trades et....
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....cally held while denying relief that there is no change in fact and circumstance. Nor has the ld. D R made any submission to show that there is a change in facts in the year under consideration. No contrary view on behalf of the Revenue to justify overlooking the legal precedent in assessee's case has been cited considering the settled legal position on this issue in assessee's own case itself. Accordingly, We are of the view that the ground raised has to be allowed. 38.2 We are further fortified by the decision of the jurisdictional High Court in assessee's case itself in ITA 30 of 2017 dated 10th June, 20 19 placed on record wherein the Hon'ble Court considering the following additional question raised by the Revenue in Question No. (vii) has settled the issue. The following question was raised by the Re venue for consideration before the Court : "vii. Whether on the facts and in the circumstances of the case and in law, the ITAT was right in holding that the penalty was on account of irregularities committed by the assessee's client without appreciating the facts that non compliance to clearing house trades and trades and client code modification ar....
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....le passing the draft assessment order disallowed the same on the basis of earlier years. The DRP confirmed the order of assessing officer. Though, before ld. DRP, the assessee filed detail written submission in explaining that such expenses were paid towards settlement charges as per settlement application filed by assessee, hence there was no breach of statutory provision. On confirming the order of assessing officer by ld. DRP, the assessing officer passed final assessment order disallowing an amount of Rs. 20,80,242/-. The ld. AR of the assessee submits that in a series of decision, the Mumbai Benches of Tribunal held that consent fees paid by assessee stock broker to SEBI for some technical violation without admitting guilt was an allowable business expenditure. To support his submission, the ld. AR relied upon the following decision; * DCIT vs VLS Finance Ltd. (2019) 104 taxmann.com 294 (Mumbai - Trib), * DCIT vs Anil Dhirajlal Ambani (2018) 93 taxmann.com 492 (Mumbai - Trib), * ITO vs Reliance Share & Stock Brokers (P) Ltd. (2014) 51 taxmann.com 215 (Mumbai - Trib) 12. On the other hand, ld. Sr. DR for the Revenue submits that auditor of assessee....