2016 (2) TMI 1083 - HC - Income Tax

Transfer pricing adjustment - Held that - As it is seen that in the impugned order, the ITAT has remanded the issue to the Transfer Pricing Officer. It is pointed out that as far as AY 2009-10 is concerned in the Assessee s own case declined to interfere with the remand order passed by the ITAT. Consequently, the Court declines to frame any question as far as this issue is concerned. Disallowance under Section 14A - Revenue submits that the decision of this Court in CIT v. Holcim India (P) Ltd. 2014 (9) TMI 434 - DELHI HIGH COURT may require reconsideration by a larger Bench particularly in light of Circular No. 5/2014 of the Central Board of Direct Taxes dated 11th February 2014 - Held that - The Court is not persuaded to accept the above plea of the learned counsel for the Revenue. In any event, the circular of CBDT cannot possibly override a binding decision of the Court. Consequently, the Court declines to frame any question as far as the above issue is concerned. Following question is framed for determination Whether ITAT was correct in deleting the disallowance of ₹ 70,37,18,502 made by the AO under Section 40(a)(i) of the Act on account of non-deduction of TDS?

Summary

Issues:
1. Transfer pricing adjustment issue
2. Disallowance under Section 14A of the Act
3. Disallowances under Section 40(a)(i) of the Act

Transfer Pricing Adjustment Issue:
The appeal under Section 260A of the Income Tax Act, 1961 was filed by the Revenue against an order passed by the Income Tax Appellate Tribunal (ITAT) for the Assessment Year 2010-11. The ITAT had remanded the issue concerning transfer pricing adjustment to the Transfer Pricing Officer. The court noted a previous order related to AY 2009-10 where it declined to interfere with a similar remand order. Consequently, no question was framed regarding this issue.

Disallowance under Section 14A of the Act:
The Revenue raised an issue regarding the disallowance under Section 14A of the Act concerning the expenditure incurred for earning exempt income. The Revenue's counsel suggested reconsideration of a previous decision in light of Circular No. 5/2014 of the Central Board of Direct Taxes. The court, after considering the timing of the previous judgment and the circular, declined to accept the plea, stating that the circular cannot override a binding court decision. Therefore, no question was framed concerning this issue.

Disallowances under Section 40(a)(i) of the Act:
The next issue involved disallowances made by the Assessing Officer under Section 40(a)(i) of the Act due to non-deduction of TDS on payments to six entities. A question was framed to determine whether the ITAT was correct in deleting the disallowance made by the AO under Section 40(a)(i) of the Act. The parties were allowed to file additional documents within a specified timeframe for further consideration. The case was listed for hearing along with another matter on a specified date.

This judgment from the Delhi High Court addressed various issues related to income tax assessments for the Assessment Year 2010-11. The court dealt with transfer pricing adjustments, disallowances under Section 14A of the Act, and disallowances under Section 40(a)(i) of the Act. The court's decisions were based on legal precedents, considerations of relevant circulars, and the specific circumstances of each issue.