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2020 (4) TMI 293 - ITAT DELHIAddition on account of Unearned Revenue - revenue recognition - HELD THAT:- As decided in own case [2019 (11) TMI 1395 - ITAT DELHI] unearned revenue has been offered for tax in the subsequent years as exhibited in chart elsewhere, we are of the considered opinion that the addition is uncalled for and deserves to be deleted. Disallowance of provision of Liquidated Damages - HELD THAT:- As decided in own case [2019 (11) TMI 1395 - ITAT DELHI] CIT(A) categorically stated that when the payments were actually made, the accounts were adjusted with reference to any remission or waiver that the company may get in respect of damages payable for the late delivery and the same was brought to tax u/s 41(1) of the Act by crediting the liquidated damages accounts. Therefore, the impugned amount was not only the provision but the actual amount of the liquidated damages pertaining to the period of delay falling within the previous year relating to the assessment year under consideration. The Ld. CIT(A) categorically stated that the assessee was following this method consistently. Disallowance out of Expenditure in Foreign Currency - HELD THAT:- As decided in own case [2019 (11) TMI 1395 - ITAT DELHI] It is not in dispute that school fees of the children of the employees have been paid by the assessee company. We are of the considered view that if the same is treated as perquisites in the hands of the employees then the same takes the colour of the salaries. We, accordingly, restore this issue to the files of the AO. The assessee is directed to demonstrate that the school fees has been treated as perquisites in the hands of the employees and the AO is directed to examine the same and decide the issue afresh after giving a reasonable opportunity of being heard to the assessee. Disallowance out of Technical Training Expenditure - HELD THAT:- As decided in own case [2019 (11) TMI 1395 - ITAT DELHI] Chartered Accountant certificate clearly shows that it is a contra entry inadvertently shown under the head “details of expenditure” in foreign currency. We find that complete ledger accounts were given to the lower authorities which were not examined by them. In the interest of justice and fair play, we restore this issue to the files of the AO. The AO is directed to examine the ledger accounts and verify whether it is contra entries and after verifying the same and if found correct delete the addition, after giving a reasonable opportunity of being heard to the assessee. Ground is treated as allowed for statistical purposes. TP adjustment - provision of marketing support services AND provision of warranty support service - HELD THAT:- As decided in own case [2019 (11) TMI 1395 - ITAT DELHI] Cost of marketing team should be bifurcated based on revenue of AE from its operations in India vis a vis revenue generated by the assessee from its sales to third party vendors. We, accordingly, restore this issue to the file of the Assessing Officer/TPO. The assessee is directed to submit the India Specific Profit and Loss Account, network equipment sales to Indian telecom operators of the AE duly certified by an authorised public accountant of Finland. Warranty support services - TP adjustment is of a very small amount being 1.01 crores. Considering the facts in totality, we direct the TPO to accept the TSS segment as part of network division for bench marking the international transaction which means that this segment should be taken with the main network division of aggregated approach for bench marking. Technical support services - assessee entered into an ‘Advance Pricing Agreement’ u/s 92CA of the Act with CBDT and agreement is dated 28.03.2016 and at page 13 under Appendix 1A, details of covered transactions between the assessee and the AEs related to networks division - provision of telecom support services and warrantee support services have to be clubbed together. Therefore, for the detailed discussion given hereinabove in respect of provision of warrantee support services, the same will apply to the telecom technical support services mutatis mutandis. TP adjustment on account of this service is also directed to be deleted. Disallowance of expenses for moulds and tooling, expenditure for project equipment and components written off and out of repair and maintenance expenses - HELD THAT:- It is true that while making the disallowances, the Assessing Officer followed the findings given in A.Y 2010-11 and the DRP while deleting the disallowance have followed the directions given in A.Y 2010-11. Since the Revenue did not prefer any appeal for A.Y 2010-11, the directions of the DRP have attained finality. Further, we find that the facts and circumstances and underlying issues are identical during the year under consideration also. Therefore, considering the past history of the assessee, we do not find any reason to interfere with the findings of the DRP. Accordingly, Ground Nos. 1 to 3 are dismissed. Disallowance of TDS recoverable written off - HELD THAT:- As decided in M/S NOKIA SIEMENS NETWORKS INDIA [2018 (2) TMI 1783 - ITAT DELHI] it has become necessary to verify whether the assessee had recognized the income as and when the services are rendered or goods are dispatched and subsequently, whether the assessee written off the difference amount of deficit payment and the amount under the TDS certificate issued, in their books of accounts. It would be conveniently verified by the learned AO and if he finds that initially the assessee recognized the total invoice amount and subsequently, identified the bad debt with reference to the deficit payment by the party and the amount under TDS certificate issued. On verification of compliance with these two conditions, learned AO will allow this expense. Disallowance of utilization from provision for foreseeable losses - AO was of the opinion that the provisions for liquidity damages has been debited to profit and loss account but not added back in the computation of income. Therefore, provisions are unascertained liabilities and are not admissible deduction - HELD THAT:- Considering the method of accounting employed by the assessee and on finding that the provisions have been written back in earlier years and have been claimed subsequently, we do not find any reason why the write off should not be allowed as deduction for the write back has been accepted as part of the income. We, accordingly, direct the Assessing Officer to delete the addition.
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