TaxTMI 
TaxTMI 
2026 (6) TMI 548
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....f are that in TP order dated 27.10.2017 the TPO has discussed the said issue in depth from page 14 onwards and concluded that AMP is an international transaction and accordingly applied a mark-up on the same and proposed an adjustment of Rs. 137.97 crores. The assessee company contested the said addition before the DRP. The DRP upheld the findings of the TPO. The relevant extract of the DRP direction is given in para 7.1 and 7.2 (page 23 of the DRP order dated 20.09.2018). 5. We have heard the rival contentions and perused the material on records. We find that AMP expense is not an international transaction as Assessee does not render any marketing and distribution support services to its AEs. Further all the expenses incurred on its own account and has no agreement with its AEs and that AMP expenditure incurred by the Assessee is wholly and exclusively for the purpose of its own business. Further the Ld.AR submitted that it is a recurring issue and he relied upon the Assessee's own case for previous years in ITA No. 621/Kol/2017 for AY 2012-13, ITA No. 315/Kol/2016 for AY 2011-12 and ITA No. 114/Kol/2018 for AY 2013-14 wherein the said issue has been allowed in favour of the as....
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....ered view the AMP cannot be regarded as international transaction. In holding so we find the support & guidance from the judgment of Hon'ble Delhi High Court in the case of Maruti Suzuki India Limited Vs. CIT reported in 381 ITR 117 wherein it was held as under : "51. The result of the above discussion is that in the considered view of the Court the Revenue has failed to demonstrate the existence of an international transaction only on account of the quantum of AMP expenditure by MSIL. Secondly, the Court is of the view that the decision in Sony Ericsson Mobile Communications India (P.) Lid. case (supra) holding that there is an international transaction as a result of the AMP expenses cannot be held to have answered the issue as far as the present Assessee MSIL is concerned since finding in Sony Eriesson to the above effect is in the context of those Assessees whose cases have been disposed of by that judgment and who did not dispute the existence of an international transaction regarding AMP expenses. " In view of we note that the facts of the above case are identical to the present issue, thus the principle laid down by the Hon'ble Delhi High C....
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....6. Further in addition to the above, we have also relied upon the decision of Apex Court in the case of PCIT vs Amadeus India (Pvt) Ltd (171 taxmann.com 129) dismissed SLP of revenue upholding the Decision of Hon'ble Delhi High Court as reported in (2023) 452 ITR 206(Del) concluded that AMP transaction is not an international transaction. 7. Thus, since the issue is squarely covered in favour of the assessee by its own case for the previous years and also the decision of the Hon'ble Apex Court as mentioned supra, therefore the addition is ordered to be deleted. The ground no. 2 is allowed. 8. Ground No.3 is relating to determining the ALP for Intra Group Services (IGS) received by Assessee from its AE's as NIL and thereby disallowing the payment made towards such services. 9. The facts in brief are that in TP order dated 27.10.2017 the TPO has discussed the said issue in depth from page 85 onwards and finally on page 145 has concluded that services performed by the AE of the Assessee fall into the category of stewardship activity and accordingly treated the arms' length price of the services provided amounting to Rs. 43,91,90,412/- to the assessee by its AE's as NIL. T....
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....length price of "intra-group services in respect of support services received from its AEs as Nil was discussed and remanded back to the file of the A.O/TPO. Learned counsel for the assessee submitted that the present issue is squarely covered by the aforesaid order of the Tribunal, a copy of which was also placed before the Bench. 10 Learned Departmental Representative relied upon the orders of the authorities below. 11 We see no reasons to take any other view of the matter than the view so taken by the Division Bench of this Tribunal in assessee's own case vide order dated 18.10.2019. In this order, the Tribunal has inter alia observed as follows: 10. Ground no. 4 of the appeal of the assessee is against the action of the AO in enhancing the income of the assessee by Rs. 69,963,072/- by determining arm's length price of intra-group services in respect of support services received from its AEs as nil. This issue has been considered by this Bench of the Tribunal in the earlier AY 2011-12 in assessee's own case in ITA No. 560/Kol/2016 & ITA No. 315/Kol/2016 vide order dated 28.08.2019 in which the Tribunal has observed as under: "9. Ground No. 5, ....
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....oduce any material to controvert the aforesaid findings of the Division Bench (supra). We find no reason to interfere in the said order of the Division Bench, therefore, respectfully following the judgment of the Coordinate Bench in assessee's own case we restore this issue back to the file of the A.O/TPO. Therefore, grounds raised by the assessee is allowed for statistical purposes." 12. Therefore, following the orders of the coordinate benches in the preceding assessment years, we are inclined to restore back to AO/Transfer Pricing Officer for re-adjudication. The ground no. 3 is allowed for statistical purposes. 13. Ground No.4 is relating to Adjustment on account of mark-up earned by Assessee on Contract R&D services by selecting different set of comparables. 14. The adjustment proposed during the TP Assessment Proceedings in this regard has been deleted vide TPO's order dated 30 April 2019 (Pages 274-277 of the Paper Book) in order to give effect to the DRP Directions passed u/s 13 of the Income Tax (Dispute Resolution Panel) Rules, 2009 dated 12 February 2019 (Pages 259-273 of the Paper Book). Accordingly, the instant ground becomes infructuous in context of the inst....
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.... placed before the Bench. 20. Learned Departmental Representative relied upon the orders of the authorities below. 21. We see no reasons to take any other view of the matter than the view so taken by the Division Bench of this Tribunal in assessee's own case vide order dated 18.10.2019. In this order, the Tribunal has inter alia observed as follows: "9. We have heard rival submissions and carefully gone through the material available on record. We note that in the facts and circumstances of the case of assessee, the R&D expenses incurred by it cannot be regarded as an international transaction as per section 92B of the Act. We also note that the issue in hand is squarely covered by the decision of this Tribunal in assessee's own case in ITA No. 560/Kol/2016 & ITA No. 315/Kol/2016 wherein this Tribunal by order dated 28.08.2019 has held that the expenses in question covered under R&T Expenses relate to, service fee paid by the company for R&T Services obtained by the company, from another group company of the assessee i.e., ICT India Research & Technology Centre (ICI). ICT is a company registered u/s. 25 of the Act as a "not for profit" organization. ICT p....
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....ies in determining the appropriate mixture of various raw material components for achieving the desired colour and texture of the paint to be manufactured. provided technical training on the manufacturing processes to the production team from time to time to ensure technical updation, improvement and refinement of the production team for the overall efficient execution of manufacturing operations of the Appellant. provided other technical support on day to day basis to the manufacturing operations and addressed the manufacturing process gaps. provided training to the marketing team on the product, the nature and feature of the products etc. necessary for sales and marketing of the Appellant's products in the designated market i.e. India. assisted the Quality department in handling product defect/quality issue or redressing any product complaints from the customers. 8.2. A perusal of the above demonstrates that, on facts the assessee has not carried out any R&T activities. The expenditure in question is incurred only for its manufacturing operations and local environmental compliance from HSE perspective. The assessee submitted that ICT also does not carry out any resea....
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.... royalty payments as capital in nature instead of revenue expense which is extracted below: "In accordance with the Part-B of New Appendix-I with reference to Rule-5 of the I.T. Rule, 1962, it should be treated as intangible assets and the entire royalty payment must be capitalized. When a Technical Know-how is licensed to the assessee for a certain period with the exclusive right on non-transferable basis, expenditure for acquiring the same should be treated as 'Capital Expenditure'. From the agreement it is noticed clearly that there is no embargo on the assessee to continue the manufacturing of the product in question even after expiry of the agreement and alls the company has been upgrading their existing plant & machineries to make their finished products more viable for the market from time to time. Hence, the technical know-how for upgrading the manufacturing technology is helping the assessee to enter into the new dimension of the business from time to time. when a Technical Know-how is licensed to assessee for a certain period with the exclusive right on non-transferable basis, expenditure for acquiring the same should be treated as Capital Expenditure. Th....
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....sociated Enterprises ("AE"), namely, (i) Akzo Nobel Chemicals International BV amounting to INR 2,35,67,386 for Chemical Division, (ii) Akzo Nobel Coating International BV amounting to INR 23,41,93,403 for Coating Division; INR 18,85,94,935 for Paints Division; INR 2,08,45,780 for Automobile and Aerospace Division. The total royalty payments made to its AE for various divisions of the Assessee amounted to INR 46,72,01,504. Royalty payments were made to the AEs for use of licence, trademark, drawing copy right, documents, computerised programme design etc. on a non-exclusive licence basis. The Assessee under the royalty payment agreements received only a right to use the license, information, trademarks, corporate brands etc. for sale of products in India vide agreement dated 01.06.2012 from AY 2013-14(refer royalty agreements at pages 968 to 1058 of paperbook). b) It may be pointed out that such royalty payments have been held to be arm's length by the Transfer Pricing Officer ("TPO") and further that the same are for the purposes of business have not been disputed by the AO. The only difference of opinion between the AO and the Assessee is with regard to whether the same ....
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..... for business purpose is revenue expenditure (refer page 1070-1079 of paperbook) g) Reliance is also placed on Supreme Court of India in case of Commissioner of Income-tax v. I.A.E.C. (Pumps) Ltd [1998] 232 ITR 316 (SC) and Jurisdictional High Court Of Calcutta in case of Timken India Ltd. v. Commissioner of Income-tax, Kolkata-I [2014] 51 taxmann.com 184 (Calcutta) [IT APPEAL NO. 148 OF 2006] 22. We have heard the rival contentions and perused the materials on records. We note that the royalty payments made by the assessee to its Associated Enterprises were incurred wholly and exclusively for the purposes of its existing business and merely granted a non-exclusive right to use license, trademarks and know-how, without conferring any ownership or enduring benefit. The payments were made as a percentage of sales and no lump-sum payment was involved. We also note that, the Transfer Pricing Officer has accepted the royalty payments to be at arm's length, and similar payments have been consistently allowed as revenue expenditure in earlier years. The reliance placed by the Assessing Officer on the case of Honda Siel Cars India Ltd. v. CIT is misplaced as the facts are clea....
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....tood that the assesee has claimed the sameasper provision of section 32(1)(iia), an assessee is entitled for Additional Depreciation @20% of the actual cost of machinery or plant acquired and installed after 31/03/2015 for qualifying assets. The second proviso to section 32(1)(it) restricts the claim of depreciation to 10% if it is installed and put to use for less than 180 days in a previous year. Accordingly the assessee company has claimed Additional Depreciation @ 10% for Plant & Machinery Installed and put to use for less than 180 days in F.Y. 2013-14 and balance was claimed in F.Y. 2014-15". However, It is observed that the aforesaid proviso-3 has been inserted by the Finance Act 2015 and came into existence with effect from 01/04/2016. Hence the assessee is not entitled to make the aforesaid claim of additional depreciation for the F.Y. 2013-14 corresponding to A.Y. 2014-15. Thus depreciation to that extent of Rs. 1,12,43,634/- is denied and added back to the total income." 24.1. DRP as discussed the issue in para 9.1 and 9.2(page 25 of the DRP order),where DRP has upheld the directions of AO. The relevant extract of the said directions are reproduced below: "9.1....
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....med under the head "electrical cables" primarily consist of cables, wires, DG set and related installation thereof and are installed in plant/factory premises which ensures smooth functioning of manufacturing activity. Hence, these had been rightly classified as plant and machinery by the assessee and claimed depreciation at the rate of 15%. b) The AO has erred in disallowing the balance additional depreciation claimed at the rate of 10% on the ground that third proviso to section 32(1)(ii) of the Act since was inserted by Finance Act, 2015 w.e.f. April 1, 2016, therefore, the same cannot have been applied retrospectively for claim of additional depreciation. c) The AO erred in not appreciating that the claim for additional depreciation was made under section 32(1)(ii) of the Act which prescribes for allowance of additional depreciation at the rate of 20% on the actual cost of plant and machinery which has been acquired or installed after the March 31, 2005. The proviso inserted by Finance Act 2015 w.e.f. 1.4.2016 only clarifies that in case of an asset referred in clause (iia) is put to use for a period of less than 180 days, the depreciation shall be restricted ....
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..... 28. Ground No.8 is in respect of Disallowance of expenditure claimed u/s. 35(1)(i) of the Act by contending the R&D Centre did not have requisite approval. 29. The facts in brief are that the AO has discussed the issue in para 6 (page 18) of the draft assessment order dated 18.12.2017 wherein the assessing officer has disallowed all the research and development expenses. The relevant extract of said order is reproduced below: "The reading of the section and the Explanation thereto in tandem with Rule 6(1) makes it very clear that even to claim revenue expense as Research and Development for business purpose requires certification of the prescribed authority i.e DSIR, to ensure that such Research and Development has a business relation with the same. In fact from the foot note to enclosure 6 it is quite apparent that the assessee is under a misconception as the auditor has also noted the absence of such certification with regard to it's the Research and Technology Centre Thane for the years 1999-2006 and any extension beyond has not been granted. Above all the Research and Development expense is thus disallowed and added back to the total income in the ....
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....chnology Centre for the scientific research and development work. The said company had been granted exemption certificate under 35 of the Act for the previous year(s) 1999-2000 to 2006-07 and an application for extension of exemption was pending. The AO on this basis disallowed the complete payment made to the said company alleging that the research and development facility of the said company was not approved under section 35 of the Act. The AO has erred in not appreciating that amount incurred on scientific research and development was an allowable deduction under section 35(1)(i) of the Act and there was no pre-condition that such an expenditure would be allowable only if the facility was approved by the prescribed authority. In fact, the explanation appended to section 35(1)(i) of the Act fortifies the stand of the assessee. The ld. AR also referred to the sample reports issued by ICI India Research & Technology Centre were also submitted vide submission dated 08 August 2018 available at page 1282-1289 of paperbook vol. 2. The ld. AR submitted that on perusal of the reports issued, it will appreciate that said are relating to testing of sample which are inextricable linked to t....
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....rted by judicial precedents and the principle of consistency, as similar expenditure has been allowed in earlier years. Therefore, we find merit in the arguments of the ld. counsel and are inclined to direct the AO to delete the disallowance made by the Assessing Officer in respect of scientific research and development expenses. The ground no. 8 is allowed. 34. Ground No.9 & 10 deal with levy of penalty u/s. 271(1)(c) and charging of interest u/s. 234B & 234C.The said grounds are consequential in nature and need no adjudication at this stage. 35. At the time of hearing, the assessee raised additional ground which is extracted below: "1. That on the facts and circumstances of the case and in law, the dividend distribution tax ("DDT") paid by the Appellant on the dividend distributed to Imperial Chemical Industries Limited, England, Akzo Nobel Coatings International B.V., Netherlands and Akzo Nobel Chemical International B.V., Netherlands be reduced to tax rate as provided under the Dividend Article of the respective Double Taxation Avoidance Agreement ("DTAA" or "tax treaty") instead of 16.995% charged in terms of section 115-O of the Act. 2. That on the fac....
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....evied by the appellant should not exceed the rate specified under Article 10. 38. The reason for raising the addition ground was due to the fact the Section 90(2) of the Act provides for option to the taxpayer to be governed by either the provisions of the Act or DTAA, whichever is more beneficial. Article 11 of the India-UK DTAA and Article 10 of the India-Netherlands DTAA states that dividends may be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the beneficial owner of the dividends is a resident of the other Contracting State, the tax so charged shall not exceed 10 per cent of the gross amount of the dividends. Further, India-Netherlands DTAA has a Most Favored Nation ("MFN") clause whereby if after the signature of the India-Netherlands DTAA, India enters into any DTAA with a third OECD member State whereby India limits its taxation at source on dividends to a rate lower or a scope more restricted than the rate or scope provided in the India-Netherlands DTAA, then as from the date on which the said Indian DTAA enters into force the same rate or scope as provided for in that DTAA shall al....
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.... the assessee find support from the decisions in the case of Addl. CIT v. Giesecke &Devrient India (P.) Ltd. (supra) and Colorcon Asia (P.) Ltd. v. JCIT (suypra). Therefore, are inclined to hold that the treaty rate be applied to the dividend distribution and the excess DDT paid by the assessee are be to refunded to the assessee. However since this issue is not examined by the AO, we restore the same to the AO for adjudicating the same in terms of our observations above. The AO is directed accordingly. The additional ground is allowed for statistical purposes. 42. The Additional Ground No.2is not pressed at the time of hearing and hence this ground is dismissed as not pressed. 43. Thus, the appeal of the assessee in ITA No.140/Kol/2019 for A.Y.2014-15 is partly allowed for statistical purposes. A.Y. 2015-16 ITA No.14/Kol/2020 44. Ground No. 2 is in respect of disallowance made on Advertisement, Marketing and Promotion Expenses(AMP) not being international Transaction. The issue is similar to ground no 2 of assessee's own case for A.Y 2014-15(supra) and therefore our decisions in ground no .2 in A.Y. 2014-15 would, mutatis mutandis, apply to this ground as well. Conse....
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....ccordingly the ground no. 5 is allowed. 51. Ground No.6 is in respect of Disallowance of Royalty Expense paid to AE alleging the same to be capital in nature. The issue is covered by ground no 6 of assessee's own case for A.Y 2014-15(supra) and accordingly the ground no. 6 is allowed. 52. Ground No.7 is in regard to disallowance of expenditure claimed u/s. 35(1)(i) of the Act by contending the R&D Centre did not have requisite approval.The issue is covered by ground no 8 of assessee's own case for A.Y 2014-15(supra) and consequently the ground no 8 is allowed. 53. Ground No.8 is in regard to Non grant of credit for MAT available for set off being b/f from previous year. This issue is consequential and direction may be given to the AO to provide MAT credit after verification of records. 54. After considering the facts on records and the arguments of the parties, the issue is restored to the file of the AO to examine and allow credit of MAT in accordance with the provisions of the Act. The ground no. 8 is allowed for statistical purposes. 55. Ground No.9 is in respect of computing DDT u/s. 115-O even though the same has been paid by the assessee. The issue is covered b....
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....3. Ground No.3 is against determining the ALP for Intra Group Services (IGS) received by Assessee from its AE's as NIL and thereby disallowing the payment made towards such services. The issue is covered by ground no 3 of assessee's own case for A.Y 2014-15(supra) and consequently by following the same,the ground no. 3 is allowed. 64. Ground No.4 is against adjustment on account of 'Alleged R&D services' by considering / re-characterizing the Research & Training expenses as R& D services and treating the same as International transaction. The issue is covered by ground no 5 of assessee's own case for A.Y 2014-15(supra) and consequently the ground no 4 is allowed. 65. Ground No.6 to 6.3are against the disallowance of royalty payment alleging the same to be capital in nature as it gives enduring benefit to the assessee. The issue is covered by ground no. 6 of assessee's appeal in ITA No. 140/KOL/2019, for A.Y. 2014-15 (supra) and consequently the ground no.6 to 6.3 are allowed. 66. Ground No.7 to 7.3 are against disallowance of expenditure claimed u/s. 35(1)(i) of the Act by contending the R&D Centre did not have requisite approval. The issue is covered by ground no 8 of ass....
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....t been incurred for the purposes of the business or profession and therefore, question of claim of deduction on the said sum either u/s. 80G of the Act or exemption u/s. 35AC doesn't arise at all. Therefore, the entire sum of Rs. 1,05,64,410/-, being exemption claimed- u/s. 35AC of the Act of Rs. 62,55,740/- & Rs. 43,08,670/- u/s. 80G stands withdrawn and accordingly for the same necessary penalty proceeding u/s. 271(1)(c) of the Act is also being initiated for furnishing inaccurate particulars of income." 69. DRP has discussed the issue in para 12 (page 15 of DRP order) onwards dated 09.12.2020 wherein DRP held that the expenditure incurred on CSR activities is not eligible for deduction under section 80G and rejected the assessee's contention. However, with respect to section 35AC of the Act, the DRP concluded that the assessee is eligible for the deduction and directed the AO to verify whether the prescribed conditions have been satisfied. The Relevant extract of said order is reproduced below: "12.10 Clauses (iiihk) & (iiihl) of sub- section 2 of Section 80G of the Act rather makes the intention of the legislature more clear that-any sum spent on any CR activity....
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.... of Rs. 62,55,740/- & Rs. 43,08,670/- u/s. 80G stands withdrawn and accordingly for the same necessary penalty proceeding u/s. 271(1)(c) of the Act is also being initiated for furnishing inaccurate particulars of income." 70.1. The ld. AR submitted as under :- a) The Assessing Officer, in the assessment order, has held that the expenditure incurred towards Corporate Social Responsibility (CSR) does not qualify as having been incurred for the purposes of business or profession. Accordingly, the AO concluded that no deduction is allowable under either section 80G or section 35AC of the Act.In response, the Ld.AR of the assessee contested that, in the absence of any specific statutory prohibition under sections 80G or 35AC, the claim for deduction cannot be denied. In support of this proposition, reliance was placed on the following judicial precedents: • Goldman Sachs Services Pvt. Ltd. vs. JCIT (117 taxmann.com 535) • Allegis Services India Pvt. Ltd. (ITA No. 1693 of 2019) b) With regard to section 35AC, it was submitted that the DRP has already allowed the claim of deduction, subject to verification and fulfilment of the prescribed con....
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....ed as not pressed. 74. Ground No.12 deals with levy of penalty u/s. 271(1)(c)of the Act. The said groundis consequential in nature and does not require any adjudication at this stage. 75. The appeal of the assessee in ITA No.228/Kol/2021 (A.Y.:2016-17) is partly allowed for statistical purposes. A.Y. : 2017-18 ITA No.190/Kol/2022 76. Ground No.2 & 5 are against the disallowance of Advertisement, Marketing and Promotion Expenses(AMP) not being international Transaction. The issue is covered by ground no 2 of assessee's own case for A.Y 2014-15(supra) in its favour and consequently the ground nos. 2 and 5 are allowed. 77. Ground No.3 is relating to determining the ALP for Intra Group Services (IGS) received by Assessee from its AE's as NIL and thereby disallowing the payment made towards such services. The issue is covered by ground no 3 of assessee's own case for A.Y 2014-15(supra) in its favour and consequently following the same, the ground no 3 is allowed. 78. Ground No.4 is relating to adjustment on account of 'Alleged R&D services' by considering / re-characterizing the Research & Training expenses as R& D services and treating the same as International tra....
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.... satisfaction of the end consumer forms part of the core business activity of the assessee. So long as the machines have been purchased and installed for the purpose of the assessee's business, the fact that they are installed at the premises of the dealer does not contravene the requirements of section 32AC(1A) of the Act. As seen from the aforesaid clauses of the lease agreement, the dealers are bound to use the machines solely for the purpose of the assessee's products, failing which the agreement stands terminated. The revenue recognition disclosure in the Annual Report confirms that sale is recognized when the control of the products is transferred, which in this case is seen to be when the final tinted paint is sold to the customer. Until such point, the assessee is seen to have control of the machines leased out to the dealers and its products. The AO is accordingly directed to verity the aforesaid clauses of the lease agreement as per record in terms of section 144C(13) of the Act and to allow the deduction in respect of the said machines, subject to the fulfillment of all other conditions stipulated in section 32AC(1A) of the Act. Ground 9 is disposed of as above."....
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....on claimed by the assessee u/s. 32AC of the Act. The ground no. 9 is allowed. 86. Ground Nos.10,11&12 are against Denial of Lower tax rate under DTAA on the amount of dividend paid to Foreign shareholders and non-grant of credit of DDT paid & consequential levy of interest u/s. 115P. The aforesaid issues are covered by our decision on additional ground no.1 of assessee's own case for A.Y 2014-15(supra) where we restorted the issue to the file of the AO and consequently following our decision supra, the ground nos. 10, 11 and 12 are allowed for statistical purposes. 87. Ground No.13 relating to Late payment of employee contribution PF, which is not pressed by the assessee, and accordingly the same is dismissed as not pressed. 88. Ground No.14 is against the disallowance u/s. 43B of the Act. During the hearing of the matter it was argued that the assessee has paid the amounts within due dates specified and accordingly the assessee is entitled to the deduction. In our opinion, the issue requires examination at the end of the AO and accordingly we restore the issue back to the file of AO to verify and allow the same in accordance with the Act. The ground no. 14 is allowed for ....
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....d for statistical purposes. 97. Ground No.8is against order of the ld. AO/Transfer Pricing Officer for not allowing deduction of bad debts written off. 98. The Assessee has created provisions for doubtful debt and advances in the preceding assessment years which has been duly disallowed while computing the taxable income in the respective preceding years. During the year under consideration, the Assessee has created a provision for doubtful debt and advances amounting to INR 8,97,07,716 which has been disclosed under "note no. 24 Other expenses" The Assessee submits that above provision for doubtful debt and advances has been offered to tax under clause 6 (m) of Part A OI-Other Information at page no. 34 of the Income tax return enclosed at pages 301 to 395 of the paperbook. Further, the Assessee invites reference to note no 'c' referred under "note no. no. 24 - Other expenses" at page no. 177 on the annual return which provides that such provision for doubtful debt excludes the bad debts written off during the year amounting to INR 5,91,60,238.In this regard, the Assessee respectfully submits that it has inadvertently not availed the allowance of such bad debt writte....
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.... debts, the tax authorities have acted in hipper technical manner. In our opinion the claim has to be allowed after verification at the level of the Assessing Officer. Accordingly we restore the issue to the file of the AO with a direct to verify the same and allow deduction in respect of bad debts. Needless to say that the assessee is to be provided due opportunity before passing the order. The ground no. 8 is partly allowed for statistical purposes. 102. Ground No.9 is against the order of the ld. AO not allowing the claim of foreign tax credit (FTC) to the assessee with respect to the taxes paid by its branch office in Sri Lanka. 103. The facts qua this ground are quite similar to ground no 8 above with the difference that the issue relates to Foreign Tax Credit in respect of the tax paid by the branch office in Sri Lanka. The AO did not accept the claim of the assessee because the same is not an additional claim but fresh claim which could be considered in the revised return of income. The Dispute Resolution Panel concurred with the opinion of the Assessing Officer. 104. We have heard the rival contentions and perused the material on records and observe that the assess....
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....for A.Y. 2014-15 (supra) in its favour and consequently the ground nos. 4 to 4.4 are allowed. 111. Ground No. 5 relates to disallowance of deduction and exemption claimed on CSR Expenses. The issue is covered by ground no 8 of assessee's own case for A.Y 2016-17(supra) in its favour and consequently the ground no.5 is allowed. 112. Ground No.6 to 6.2 are against the addition of duty draw back amounting to Rs. 63,24,274/- on the ground that the duty drawback is required to be offered to tax on accrual basis as against the cash basis followed by the assessee. 113. The facts in brief are that the assessee is following consistently the practice of offering the duty drawback on receipt basis which has been accepted by the department in the preceding assessments. In lines therewith during the financial year also the assessee claimed the duty draw back of Rs. 1,63,61,333/- but offered to tax Rs. 1,00,37,059/- on receipt basis in accordance with the ICDS accounting norms. However AO added the differential amount of Rs. 63,24,274/- which was also upheld by the Dispute Resolution Panel. 114. We have heard the rival contention and perused the materials before us. We find that the ....