2026 (4) TMI 1320

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.... the assessee exceeded Rs. 5 crores. Hence, the case was referred to Transfer Pricing Officer (TPO). A notice under Section 143(2), along with questionnaires, issued to the assessee company. After discussions with the representative of the assessee company, the Assessing Officer computed the taxable income after making the following disallowance/adjustments: (a) Consultancy charges amounting to Rs. 50,50,571/- included in the 'other income' was claimed by the assessee as business receipts, but for the purpose of computation of deduction under Section 10B the Assessing Officer excluded the said consultancy charges from the profits of the eligible business. (b) While computing the eligible deduction under Section 10B....

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....cer. But she omitted to allow eligible depreciation computed in accordance with the I.T Rules. (g) A sum of Rs. 8,73,00,000/- out of interest on borrowed capital was disallowed by the Assessing Officer on account of interest-free advances made to the subsidiary companies. (h) The assessee company during the year had earned corporate dividend amounting to Rs. 3,65,51,000/- in respect of which deduction of equivalent amount under Section 80M was claimed by its. This deduction has been restricted by the Assessing Officer to Rs. 3,47,23,450/- by netting off the estimated expenditure amounting to 5% of gross dividend against the dividend income." 2. The assessee company went on appeal before the Commissioner of Income Tax (A....

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....by the Revenue both in respect of Revenue's contention relating to the deduction from total income claimed by assessee towards foreign exchange expenditure for computing deduction under Section 10A and in respect of the allowability of interest amounts due from the subsidiary, The Income Tax Appellate Tribunal, referring the reasoning assigned by it in the connected appeal ITA.No:2148/Mds/2007, adopted the same reasoning and relied upon precedents to buttress its decision. 5. The Revenue is before us, being dissatisfied with the reasoning assigned by the ITAT for dismissing the revenue appeal. 6. At the time of admission, the following two substantial questions of law were framed by this Court. 1. Whether in the facts and cir....