TaxTMI 
TaxTMI 
2026 (9) TMI 121
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....ation of arm's length price of Exclusivity Payment and incorrect characterization of the same as a loan and imputing interest thereon 2.1 On the facts and in the circumstances of the case and in law, the learned TPO and the learned AO erred in proposing and the Hon'ble DRP further erred in upholding the action of the TPO of treating the transaction of Exclusivity Payment of Rs. 440,12,32,827 as sham and make believe by selectively relying on the information and documents submitted by the appellant and by conveniently turning a blind eye towards the justification aptly put forward and demonstrated by the appellant vis-à-vis the necessity, rationale and commercial expediency vis-à-vis the aforesaid transaction of Exclusivity Payment. 2.2 On the facts and in the circumstances of the case and in law, the learned TPO and the learned AO erred in proposing and the Hon'ble DRP further erred in upholding the action of the TPO of incorrectly re-characterizing the captioned sum as a loan thereby leading to erroneous addition of notional interest of Rs. 72,34,903 on the same. 3 Incorrect computation of arm's length price of payment of Transition....
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....wing the Appellant's claim of depreciation under section 32 of the Income-tax Act, 1961 ('the Act') in respect of the same. 6.2 Without prejudice to the above, on the facts and in the circumstances of the case and in law, the learned AO erred in proposing and the Hon'ble DRP further erred in upholding the action of the learned AO in rejecting the alternate plea of the Appellant that the payment of upfront discount to British Telecom PLC under the agreement dated 18 December 2006 should be allowed as an expense over five years under section 37 of the Act. 7 Addition of Rs. 85,14,40,158 - rejection of change in the accounting policy 7.1 On the facts and in the circumstances of the case and in law, the learned AO erred in proposing and the Hon'ble DRP further erred in upholding the action of the learned AO in adding back Rs. 85,14,40,158 towards mark to market profit on cash flow hedges which had neither accrued / arisen nor credited to profit and loss account. 7.2 Without prejudice to the above, the Appellant prays that, if the profits on cash flow hedges are regarded as taxable, consequential deduction under section 10A of the Act should b....
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.... 11. Interest charged under Section 234D and under Section 220(2) 11.1 The learned Assessing Officer erred in directing levy of interest under section 234D of Rs. 68,42,220 and under section 220 (2) of Rs. 1,84,92,711. The Appellant craves leave to add, amend, delete, rectify, substitute and modify any of the aforesaid grounds of appeal or add a new ground or grounds of appeal at any time before or at the time of hearing the appeal." 2. Brief facts of the case are as under:- The assessee is a joint venture between M/s. Mahindra & Mahindra Limited and British Telecommunications Plc. ('BT'). BT is one of the joint venture partners and also the major customer of the assessee. The assessee is engaged in the business of development of computer software and rendering allied information technology services and is one of the leading IT service providers in India. 2.1. The assessee filed its return of income for A.Y. 2008-09 on 30/09/2008. As there were international transactions between the assessee and its Associated Enterprises ('AEs'), the matter was referred to the Transfer Pricing Officer ('TPO') for determination of the arm's....
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....s an interest-free advance to the AE. Besides the transfer pricing adjustments, the disallowance proposed by the Ld.AO under section 14A of the Act amounting to Rs. 3,90,13,318/- and recomputing deduction u/s.10A thereby reducing technical service expenses incurred in foreign currency and telecommunication charges from the export turnover was upheld. 2.4.1. On receipt of the DRP directions, the Ld.AO passed the final assessment order making additions in the hands of the assessee. Aggrieved by the final assessment order dated 23/10/2012 passed pursuant to the directions of the DRP, the assessee is in appeal before this Tribunal. 3. Ld.Sr. Counsel submitted that Ground No.1 raised by the assessee is general in nature and do not require adjudication. 4. Ground No.2.1. to 2.2. raised by the assessee is on the addition made in the hands of the assessee towards interest charged on the exclusivity payment against project Andes. 4.1. Brief facts leading to this issue are as under:- The Ld.Sr.Counsel submitted that, in February 2018, BT floated an invitation to tender for its global systems and processes rationalisation programme, namely, "Project Andes". He submitted that....
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.....6. The Ld.Sr.Counsel further emphasised that, pursuant to the aforesaid payment, the assessee secured the Project Andes project and the consequential contract with BT. He submitted that, over a period of five years, the assessee generated aggregate revenue of Rs. 2,988.87 crores from BT pursuant to the said contract, the year-wise details of which were furnished as under: Financial Year GBP INR 2009-10 8,64,09,688 6,09,70,81,961 2010-11 8,20,13,400 6,21,96,16,071 2011-12 8,15,12,945 6,09,11,19,990 2012-13 7,32,72,908 6,20,25,95,654 2013-14 5,75,66,026 5,27,83,20,991 Total as printed 38,07,74,966 29,88,87,34,668 4.7. The Ld.TPO, while examining the aforesaid exclusivity payment, held that the payment was unusual and did not constitute a genuine business transaction. Accordingly, the Ld.TPO determined the ALP of the exclusivity payment of Rs. 440.12 crores at Nil. Consequentially, the Ld.TPO re-characterised the very same payment as an interest-free advance/loan given by the assessee to BT and imputed notional interest thereon, resulting in an adjustment of Rs. 72.34 lakhs. 4.8. Before the DRP, taking note of the u....
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....ts to the negotiations. He submitted that, even if such an arrangement were regarded as a non-conventional mode of commercial negotiation, the same could not, merely for that reason, be characterised as irrational, unusual or non-genuine. 4.14. The Ld.Sr. Counsel also referred to a newspaper publication bearing the heading, "Tech Mahindra-UK deal may be one of a kind". He submitted that, after securing the project and assuming the associated commercial risks, the assessee, subsequent to expiry of the 90-day exclusivity period, earned substantial profits from BT over a period of five years. According to him, the generation of such revenue was an undisputed fact and the corresponding revenue had been duly offered to tax in India. The transaction, therefore, could not be regarded as a sham or as involving any diversion of reserves. 4.15. The Ld.Sr.Counsel further submitted that, in any event, no revenue was earned pursuant to the arrangement during the year under consideration, as the assessee had added back the entire exclusivity payment while computing its taxable income and had not claimed any deduction in respect thereof. Therefore, according to him, there was no basis to al....
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....icer while passing the assessment order deleted the adjustment made towards the payment of upfront discount but retained the interest adjustment. The CIT(A) deleted the interest adjustment for the reason that since the ALP of the primary adjustment of upfront discount is determined at NIL which is not contended by the assessee, there cannot be a secondary adjustment in respect of the same international transaction. The ld AR presented three fold argument with regard to the issue to state that giving upfront discount is the normal industrial practice, that the TPO cannot re-characterise the upfront discount transaction as interest free advance to AE and that since the transaction pertains to period prior to 01.04.2016, there cannot be a secondary adjustment as per the proviso (iii) to section 92CE(1). For the purpose of adjudication, we will consider the arguments presented with regard whether secondary adjustment will apply if the primary adjustment is made prior to 01.04.2016. 25. Before proceeding further we will look at the relevant provisions of section 92CE which reads as under- "Secondary adjustment in certain cases. 92CE. (1) Where a prima....
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....rest adjustment to be a secondary adjustment. Therefore, there is merit in the contention that the secondary adjustment is unlawful and contrary to the provisions of Chapter X, since the primary adjustment is made in respect of assessment year commencing on or before 01.04.2016. In view of this discussion we uphold the decision of CIT(A) to delete the interest adjustment made at 18% treating the upfront payment of discount as interest free advance to AE. This ground of the revenue is dismissed. Since we have upheld the decision of the CIT(A) on the ground that no secondary adjustment could be made if the primary adjustment is made in respect of an assessment year commencing on or before 1st April, 2016, the arguments presented with respect to re-characterisation of the transaction and that the payment of upfront discount is done for commercial expedience in which the TPO cannot comment etc., have become academic not warranting any adjudication." 4.19. The Ld.Sr.Counsel submitted that, unless the primary adjustment survives, no secondary adjustment can be made for the year under consideration, as the provisions governing secondary adjustments were not applicable in the facts of t....
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....ch a situation, the TPO had no option but to correctly characterize this transaction and determine its ALP under the Transfer Pricing provisions of the Act. The TPO has characterized this transaction as an interest free advance given by the assessee to its AE (BT) and has determined the ALP of the interest income. 1.3 During the course of rejoinder, the Ld. AR submitted details of revenue received from Project Andes for which the assessee to have made exclusivity payment of Rs. 440 crores. The detail submitted by the assessee is reproduced below- F.Y. GBP INR 2009-10 8,64,09,688 6,09,70,81,961 2010-11 8,20,13,400 6,21,96,16,071 2011-12 8,15,12,945 6,09,11,19,990 2012-13 7,32,72,908 6,20,25,95,654 2013-14 5,75,66,026 5,27,83,20,991 Total 28,07,74,966 29,88,87,34,668 The percentage of exclusivity payment to gross (actual) revenue received from this project works out to 14.72%. As against this, the operating profit margin of the assessee is around 15% of its revenue. This shows that the entire operating profit margin from this project has been given upfront by the assessee to the AE in the form of exclusi....
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....ils the re-characterization of the upfront discount, by the TPO. The re-characterization of this transaction has not been adjudicated by the ITAT in AY.2007-08. Furthermore, the order of the ITAT for AY 2007-08 on this issue is based on an incorrect appreciation of facts as can be seen from para 26 of the said order which states that- "TPO has made secondary adjustment towards the same international transaction by recharacterizing the payment of upfront discount as an interest from the advance and charting interest on the same". In this case, the TPO has not made a secondary adjustment but has only recharacterized the payment of upfront discount as an interest free advance. In fact, there is no mention of secondary adjustment in the entire order of the TPO. The decision of ITAT is based solely on the incorrect premise that the interest adjustment is a secondary adjustment. Whereas, such an interest adjustment by the TPO has been made by recharacterizing the upfront discount (and not by way of secondary adjustment). In fact, the decision of the ITAT, Mumbai has not given any finding on the issue of recharacterization of transaction by the TPO. The....
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....e arrangements made in relation to the transaction, viewed in their totality, differ from those which would have been adopted by independent enterprises behaving in a commercially rational manner. 2.4 It is therefore, prayed that this ground may kindly be dismissed." 4.21. In rejoinder to the submissions of the Ld. DR, the Ld. Sr. Counsel contended that the Revenue's challenge to the order for A.Y. 2007-08 proceeded on an incorrect premise that the Ld. TPO had merely re-characterised the upfront discount as a loan/advance without making any secondary adjustment. He submitted that, in substance, the imputation of interest constituted a secondary/consequential adjustment, particularly when the ALP of the underlying international transaction, i.e. the upfront discount, had already been determined at Nil. 4.22. The Ld. Sr. Counsel further contended that the decision for A.Y. 2007-08 was not founded merely on the nomenclature of the adjustment as a "secondary adjustment". According to him, the Ld. CIT(A), and thereafter the Tribunal, had independently held that once the primary adjustment in respect of the upfront discount did not survive, no further adjustment could be m....
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.... a comparison, at the highest, may raise a question regarding the quantum or commercial reasonableness of the upfront discount, but could not, by itself, justify imputation of interest after the primary adjustment had ceased to survive. 4.27. The Ld.Sr. Counsel further contended that such NPV comparison did not constitute any of the prescribed methods under section 92C(1) read with Rule 10B. Therefore, according to him, the same could not be adopted as an ad hoc benchmarking mechanism. The subjective perception of the Ld.TPO as to what the amount of upfront discount ought to have been could not substitute a method prescribed under the transfer-pricing provisions. 4.28. It was also submitted that the transaction did not possess the essential characteristics of a loan or advance. There was no principal outstanding in favour of the assessee, no stipulated maturity period, no repayment schedule and no lender-borrower relationship between the parties. The upfront discount was, according to the Ld.Sr. Counsel, a commercial payment forming part of the contractual arrangement with BT and was effectively reflected in the commercial terms of the contract over its contractual period. Co....
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....ar commercial benefits in connection with securing large, long-term contracts were not unknown in the IT industry. These circumstances lend support to the assessee's contention that the payment was made pursuant to a commercial arrangement and cannot, merely on account of its unconventional nature, be regarded as lacking commercial substance. 5.2. In the absence of any material brought on record by the Revenue to establish that the transaction was sham, fictitious or otherwise lacking in commercial substance, we find no justification to disregard the commercial character of the payment merely because the manner adopted by the assessee was unconventional. It is also undisputed that, after securing the contract, the assessee earned substantial revenue from BT in the subsequent years, which was duly offered to tax in India. The subsequent generation of substantial revenue pursuant to the contract constitutes a relevant circumstance supporting the commercial rationale for the payment. 5.3. As regards the consequential adjustment on account of notional interest on the exclusivity payment, we find merit in the contention of the Ld.Sr.Counsel. The primary adjustment of Rs. 440.12 cr....
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....reements entered into with BT's vendors from whom the work was transitioned, had been furnished before the authorities below. 6.4. It was further submitted that the payment also included costs incurred by BT towards training imparted by it to the assessee's employees. The Ld.Sr. Counsel also submitted that certain projects were already being carried out by major IT service providers such as TCS and Wipro, which were subsequently transitioned to the assessee. BT had, therefore, incurred costs in facilitating such transition when it selected the assessee to render the said services. 6.5. The Ld.Sr. Counsel emphasised that, in substance, the transition charges represented payments in respect of services rendered on software platforms by Wipro/TCS, which were subsequently transitioned to the assessee after BT selected the assessee to render the same services. Upon transition of such work to the assessee, the assessee was required to reimburse the costs incurred by BT towards payments made to Wipro/TCS. The Ld. Senior Counsel, therefore, emphasised that the ALP of the transition fee could not be determined at Nil. 6.6. He also placed reliance on the Work Package Agreement dated....
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....e towards transition services. He, therefore, submitted that the Ld.TPO's conclusion that the assessee failed to establish the rendering of services was not borne out from the record. 6.10. The Ld. DR, on the other hand, relied upon the observations and findings recorded by the Ld.TPO and the DRP and supported the disallowance made by the lower authorities. We have perused the submissions advanced by both sides in light of the record placed before us. 7. We have considered the rival submissions and perused the material available on record. The Ld. TPO, while rejecting the submissions of the assessee, observed that there was no necessity for the assessee to make the impugned payment for maintaining a system which was already in existence and operational. The Ld. TPO also proceeded on the premise that an independent third party would not have made such an upfront payment in anticipation of future work. 7.1. In our considered view, the aforesaid premise, by itself, cannot constitute a valid basis for disregarding a transaction supported by contemporaneous documentary evidence. The material placed on record indicates that the assessee derived commercial benefit from the tra....
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.....3.1. raised by assessee stands allowed. 8. Ground No.3.2. raised by assessee is against secondary adjustment made by Ld.TPO in respect of the transition fee by treating the same to be loan to AE and computing notional interest. We have already considered the impact of secondary adjustment in the foregoing paragraphs hereinabove. The same principle is applied mutatis mutandis to this issue under consideration after considering identical arguments raised by the Ld.Sr. Counsel as well as the Ld.DR. Accordingly, Ground No.3.2. raised by assessee stands allowed. 9. Ground No.4 raised by the assessee is against secondary adjustment of upfront discount of Rs. 524 Crores that was made in A.Y. 2007-08 which is treated as loan to AE and notional interest was added in the hands of the assessee during the year under consideration. 9.1. The brief facts relating to the issue are that, during AY 2007-08, pursuant to an RFP floated by BT to various major players in the IT industry, including Accenture and Infosys, the assessee bid for and secured the software and IT services contract with BT having an approximate value of USD 1 billion, to be executed over a period of five years comme....
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....enzing the upfront discount payment as an interest free loan to AE. The assessing officer while passing the assessment order deleted the adjustment made deleted the interest adjustment for the reason that since the ALP of the primary adjustment towards the payment of upfront discount but retained the interest adjustment. The CIT(A) of upfront discount is determined at NIL which is not contended by the assessee, there cannot be a secondary adjustment in respect of the same international transaction. The Id AR presented three-fold argument with regard to the issue to state that giving upfront discount is the normal industrial practice, that the TPO cannot re-characterise the upfront discount transaction as interest free advance to AE and that since the transaction pertains to period prior to 01.04.2016, there cannot be a secondary adjustment as per the proviso (i) to section 92CE(1). For the purpose of adjudication, we will consider the arguments presented with regard whether secondary adjustment will apply if the primary adjustment is made prior to 01.04.2016. 26. Section 92CE was introduced by the Finance Act 2017, w.e.f.01.04.2018 In order to align the transfer p....
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....ear 2007-08 or in A.Y. 2008-09. He, therefore, submitted that the re-characterisation of the said payment as an interest-free advance/loan originated entirely from the order passed by the Ld.TPO for A.Y. 2007-08. Consequently, the adjustment of Rs. 69.82 crores towards interest in A.Y. 2008-09 was merely a continuation of the same imputation of interest which had already been deleted by the coordinate Bench of this Tribunal in assessment year 2007-08. He further submitted that, as in assessment year 2007-08, the year under consideration was prior to 01/04/2016 and, therefore, proviso (ii) to section 92CE(1) barred any secondary or consequential adjustment in respect of the said payment. 9.7. Without prejudice to the aforesaid submission that the issue was squarely covered by the decision of the coordinate Bench, the Ld.Sr.Counsel submitted that the consequential adjustment was, in any event, legally unsustainable, as there was no primary adjustment in respect of the upfront discount of Rs. 524.93 crores for the year under consideration(2008-09) to which the consequential adjustment could attach. According to him, the attempt of the Ld. CIT(DR) to revisit the issue and seek a rev....
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.... including TCS, Infosys, Wipro and HCL. In support thereof, reliance was placed on contemporaneous press reports published in the Economic Times dated 15/12/2008 and 30/07/2014, Livemint dated 15/10/2012 and India Infoline dated 26/04/2016. He further relied upon an uncontrolled transaction involving Vodafone Hutchison Australia under a contract dated 07/05/2010. It was submitted that, in that case also, the customer had floated a tender containing a provision for payment of an upfront fee of AUD 50 million as a sign-on fee for securing the contract. According to the Ld. Sr. Counsel, the existence of a similar commercial term in an uncontrolled transaction constituted corroborative evidence that the upfront discount paid to BT was a genuine commercial arrangement and was consistent with arm's length dealings. The Ld. Sr. Counsel further submitted that the upfront discount enabled the assessee to secure a five-year contract with BT, pursuant to which the assessee earned revenues of GBP 380.77 million, equivalent to approximately Rs. 2,988.87 crores. It was submitted that the said revenues were recognised by the assessee in the subsequent years and duly offered to tax. The L....
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....s were not unknown in the IT industry, particularly in the context of large, long-term and multi-year contracts. The existence of similar commercial terms in uncontrolled transactions also lends support to the assessee's contention regarding the commercial nature of the payment. 11.2. In the absence of any material brought on record by the Revenue to demonstrate that the transaction was not genuine or that the payment was a mere device lacking commercial substance, we find no justification to disregard the commercial character of the upfront discount merely on the ground that the manner adopted by the assessee was unconventional. It is also undisputed that, pursuant to securing the contract, the assessee earned substantial revenues from BT in the subsequent years, aggregating to GBP 380.77 million, approximately equivalent to Rs. 2,988.87 crores, which were duly offered to tax in India. The subsequent generation of substantial revenue from the contract constitutes a relevant circumstance corroborating the commercial rationale for the payment. 11.3. We now turn to the consequential adjustment on account of notional interest on the aforesaid upfront discount. The upfront discou....
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..... The Ld. Sr.Counsel submitted that the issue was recurring in nature and stood covered by the decisions of the Tribunal in the assessee's own case for earlier assessment years. He submitted that the very same loan of US$ 5 million, advanced in August, 2005, continued in the subsequent years and that the Ld.TPO followed the same approach as adopted in the earlier years. 12.4. The Ld.Sr.Counsel submitted that, for A.Y. 2004-05, in ITA No.1176/Mum/2010, vide order dated 30/06/2011, the coordinate Bench of this Tribunal accepted LIBOR as the appropriate benchmark rate for determining the arm's length interest in respect of a foreign currency loan advanced to the AE. He further submitted that, for A.Y. 2006-07, the Tribunal had again accepted LIBOR as the appropriate benchmark. He submitted that for A.Y. 2007-08, the Tribunal had held that LIBOR plus 80 basis points constituted an appropriate benchmark rate. 12.5. The Ld.Sr.Counsel relied on various judicial precedents to contend that interest on a loan advanced to an AE in foreign currency ought to be benchmarked with reference to the rate applicable to the currency in which the loan was denominated and in the jurisdiction where....
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....e loan transaction has continued from the earlier years and that the issue of benchmarking the interest with reference to LIBOR has been considered by the Tribunal in the assessee's own case for AYs 2004-05 and 2006-07. Therefore, in the absence of any distinguishing feature having been brought on record by the Revenue for the year under consideration, we find no reason to take a different view. 13.2. Respectfully following the above decision of the co-ordinate Bench of the Tribunal in the assessee's own case for AY 2007-08, we direct that the interest rate of LIBOR plus 80 basis points be adopted as the appropriate benchmark rate for determining the arm's length price of the loan transaction for the year under consideration. The Ld.AO/TPO is accordingly directed to recompute the arm's length interest and the resultant adjustment, if any, in accordance with the above direction. Accordingly, Ground No.5 raised by the assessee stands partly allowed. 14. The Ld.Sr.Counsel for the assessee submitted that the assessee did not wish to press Ground Nos. 6 & 7. Accordingly, Ground Nos. 6 & 7 are dismissed as not pressed. 15. Ground No. 8 relates to disallowan....
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....mputed in accordance with the mechanism prescribed under Rule 8D and contended that the Ld.AO correctly computed the disallowance having regard to the exempt income earned by the assessee. We have perused the submissions advanced by both sides in light of the record placed before us. 16. We have considered the rival submissions and perused the material available on record. It is noted that the Ld. AO proceeded to invoke Rule 8D without recording any objective satisfaction, with reference to the accounts of the assessee, as to the correctness of the claim made by the assessee regarding the expenditure incurred in relation to exempt income. However, since the assessee itself had identified and admitted expenditure of Rs. 8,03,900/- as attributable to investment-related activities, the issue before us is required to be considered in the context of the applicable legal principles governing determination of disallowance under section 14A read with Rule 8D. 16.1. We further note that the Special Bench of the Tribunal in Vireet Investment (P.) Ltd. (supra) held that, for the purposes of computation under Rule 8D(2)(iii), only those investments which have actually yielded exempt i....
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....ss of providing software development and IT-enabled services to clients globally, claimed deduction under section 10A of the Act. While computing the deduction, the assessee did not reduce telecommunication charges of Rs. 7.23 crores and expenditure incurred in foreign exchange outside India amounting to Rs. 317 crores from either the export turnover or the total turnover. The assessee's contention was that the aforesaid expenditure was neither recovered from nor billed to the customers and, therefore, did not form part of the export turnover. 17.2. Since the aforesaid expenditure had not been included in the export turnover in the first place, the assessee did not make any adjustment to the figure of export turnover while computing the deduction under section 10A. The Ld. AO, however, while framing the draft assessment order, reduced the aforesaid expenditure from the export turnover without making any corresponding adjustment to the total turnover. The Ld. DRP upheld the action of the Ld. AO, observing that the issue stood covered by its directions for A.Y. 2006-07. 17.2.1. The Ld.Sr.Counsel submitted that the expenditure incurred towards telecommunication charges and e....
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....treated as academic. 17.8. The Ld. DR, on the other hand, supported the orders of the lower authorities and submitted that the expenditure incurred in foreign currency and the telecommunication charges were liable to be excluded from the export turnover while computing the deduction under section 10A. The Ld. DR relied upon the reasoning adopted by the Ld.AO and the DRP in support of the adjustment. We have perused the submissions advanced by both sides in light of the record placed before us. 18. We have considered the rival submissions and perused the material available on record. We note that the issue raised in Ground No.9.1 is squarely covered by the decisions of the coordinate Benches of the Tribunal in the assessee's own case for the earlier assessment years. 18.1. In the assessee's own case for A.Y. 2005-06, the Tribunal considered an identical issue and held that expenditure incurred in foreign currency towards telecommunication charges and provision of technical services outside India, having not been included in the export turnover of the assessee, could not be excluded therefrom for the purpose of computing deduction under section 10A. The relevant findings of ....
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....n in the year under consideration remains the same, inasmuch as the impugned expenditure was not included in the export turnover, the same having neither been recovered from nor billed to the customers. Therefore, respectfully following the aforesaid decisions of the coordinate Benches of the Tribunal in the assessee's own case, we hold that no adjustment is warranted to the figure of export turnover on account of such expenditure while computing the deduction under section 10A of the Act. 18.3. Accordingly, the Ld.AO is directed to compute the deduction under section 10A without reducing the telecommunication charges and expenditure incurred in foreign currency from the export turnover. 18.4. In view of our decision on Ground No.9.1, the alternate contention raised by the assessee in Ground No.9.2, namely, that in the event such expenditure is excluded from the export turnover, a corresponding exclusion ought also to be made from the total turnover, does not survive for adjudication and is, accordingly, rendered academic. Accordingly, Ground No. 9.1 is allowed and Ground No. 9.2 is dismissed as academic. 19. Ground No. 10 relates to short grant of TDS credit. 19. Th....
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....t. Needless to say, the assessee shall be afforded reasonable opportunity of being heard in the course of such verification. Accordingly, Ground No. 10 raised by the assessee stands allowed for statistical purposes. 21. Ground No. 11 is consequential in nature. ADDITIONAL GROUNDS 22. Before proceeding to adjudicate the additional grounds of appeal, we shall first deal with the applications filed by the assessee seeking admission of additional grounds. The assessee, vide application dated 28/01/2020, has raised two additional grounds, namely, (i) the claim of deduction u/s. 37(1) in respect of education cess paid, and (ii) restriction of Dividend Distribution Tax (DDT) to the rate provided under the respective DAA provisions. Further, vide application dated 01/12/2023, the assessee has raised two additional grounds challenging the jurisdiction of the Additional Commissioner of Income-tax to act as the Ld. AO and as the Ld. TPO, respectively. 22.1. We have considered the applications filed by the assessee and the submissions advanced by the Ld.Sr. Counsel. The additional grounds raised by the assessee are purely legal in nature and arise from the facts already availabl....