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2020 (6) TMI 153 - AT - Income TaxOrder passed u/s 144C - whether the order passed on 27/11/2015 is a draft assessment order or a final assessment order? - HELD THAT - The attachment of a Notice of Demand in Form No. 7 cannot be taken as the deciding circumstances, which leads us to a conclusion that the order in question is a Final Assessment Order passed u/s 143(3) of the Act. In fact at para 1 of the Notice of Demand u/s 156 of the Act, the AO has clearly stated has been determined to be payable by you u/s 144C of the I.T. Act 1961 . Non-striking of para 6 or para 7 in Form No. 7, does not take us to conclusive proof that the order is not a draft assessment order. In fact it is a Draft Notice of Demand attached to the Draft Assessment Order. This notice of demand is non-est in law as no demand can be created by an order passed u/s 144C of the Act. Hence such notice has not bearing on the order. Levy of penalty u/s 274 - HELD THAT - We find that none of the columns in the notice have been struck off by the Assessing Officer. Under such circumstances such a notice is illegal and bad in law. This notice is also non-est in law. AO has not even mentioned whether he proposed to levy penalty for non-filing of a return of income u/s 139(1) of the Act by the assessee, or for failing to comply with the notice issued u/s 142(1)/143(2) of the Act etc. Thus, such non-est notice cannot be a basis for coming to a conclusion that the assessment order is a final assessment order and not a draft assessment order. Grant of relief u/s 199 - HELD THAT - In respect of credit of tax withheld in foreign countries, we agree with the submissions of the ld. D/R that the matter cannot be remanded to the file of the AO. The assessee has not furnished any details in support of his claim either before the AO or the DRP or before us. When no details are furnished till date, we are not in a position to accept the request of the assessee. Thus, this ground of the assessee is dismissed. Short credit of TDS - HELD THAT - No reconciliation statement has been filed by the assessee before us nor has it demonstrated as to how the AO has erred in granting the tax deducted at source. If there is a mistake in granting of tax, the AO may be approached with a suitable application for rectifications. In the result, this ground of the assessee is dismissed. Granting of tax credit of taxes paid in USA - We find that the facts are not on record either before the Assessing Officer or before the DRP or before us. We cannot admit the additional ground of appeal when the facts are on record. As the facts supporting the claim of the assessee are not on record, we do not admit this ground of the assessee. Assessee after considerable arguments, has not pressed his claim that the foreign AE to be made the tested party. Hence, we dismiss this ground of the assessee. No arguments were made on the question of adjustment, Most Appropriate Method (MAM), Comparables etc. The Transfer Pricing adjustments made by the TPO on facts is not disputed by the assessee. As already stated, no arguments were advanced on the same. Hence, we uphold the same. Appeal of the assessee is allowed in part.
Issues Involved:
1. Validity of the assessment order under Section 144C of the Income Tax Act, 1961. 2. Disallowance of foreign exchange loss on maturity of marked to market (MTM) contracts. 3. Grant of relief under Section 90 for tax withheld in a foreign country. 4. Short grant of credit for tax deducted at source. 5. Transfer pricing adjustments, including the selection of the tested party and the most appropriate method (MAM). Detailed Analysis: 1. Validity of the Assessment Order under Section 144C: The main issue was whether the order passed on 27/11/2015 was a draft assessment order or a final assessment order. The Tribunal noted that the order was explicitly labeled as a "Draft Assessment Order" under Section 144C. The accompanying notice of demand and penalty notice were deemed illegal and void. The Tribunal concluded that the order was indeed a draft assessment order, as the Assessing Officer (AO) specified it under Section 144C and not under Section 143(3). Consequently, the Tribunal dismissed the grounds challenging the validity of the draft assessment order and upheld it as a draft assessment order. 2. Disallowance of Foreign Exchange Loss on MTM Contracts: The assessee did not press the grounds related to the disallowance of foreign exchange loss on maturity of MTM contracts amounting to ?3,45,06,888. Therefore, these grounds were dismissed as not pressed. 3. Grant of Relief under Section 90 for Tax Withheld in a Foreign Country: The assessee requested relief under Section 90 for tax withheld in a foreign country amounting to ?3,33,66,706. The Tribunal noted that no evidence was provided by the assessee to support this claim either before the AO, the Dispute Resolution Panel (DRP), or the Tribunal. Consequently, the Tribunal dismissed this ground, stating that the matter could not be remanded to the AO without any supporting details. 4. Short Grant of Credit for Tax Deducted at Source: The assessee claimed a short grant of credit for tax deducted at source amounting to ?63,24,635. The Tribunal observed that no reconciliation statement was filed by the assessee to demonstrate the AO's error in granting the tax deducted at source. The Tribunal suggested that the assessee could approach the AO with a suitable application for rectification. This ground was dismissed. 5. Transfer Pricing Adjustments: The Tribunal addressed multiple aspects of transfer pricing adjustments: - The assessee's additional grounds related to the selection of the tested party and the most appropriate method (MAM) were not pressed by the assessee. Therefore, these grounds were dismissed. - No arguments were made regarding the adjustment, MAM, comparables, etc. The Tribunal upheld the Transfer Pricing adjustments made by the Transfer Pricing Officer (TPO) as the assessee did not dispute the adjustments on facts. Conclusion: The Tribunal concluded that the draft assessment order dated 27/11/2015 was valid under Section 144C. The grounds related to foreign exchange loss, relief under Section 90, and short grant of credit for tax deducted at source were dismissed. The Tribunal also upheld the Transfer Pricing adjustments made by the TPO. The appeal was allowed in part, with specific directions for the AO to grant appropriate tax credit after due verification.
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