2023 (4) TMI 1098 - AT - Income Tax

TP Adjustment - payment of development expenses capitalized - Depreciation on the capitalized amount has been claimed - HELD THAT - We are of the view that the issue regarding claim of depreciation in AY 2012-13, 2013-14, 2014-15 and 2016-17, to which the present appeals pertain, cannot be decided until the dispute regarding capitalization of aforesaid expenses in assessment order is decided. The aforesaid dispute regarding capitalization of expenses is restored to the file of the Ld. CIT(A). In the fitness of things, therefore, in the facts and circumstances of the present appeals before us, the issues in dispute in the present four appeals before us should also be restored to the file of the Ld. CIT(A) for fresh order in accordance with law, consistent with the view taken by Ld. CIT(A) in AY 2011- 12. Ground allowed for statistical purposes.

Summary

Issues involved:
The appeals by Assessee against the common order dated 27/02/2019 of Learned Commissioner of Income Tax (Appeals)-1, Gurgaon for Assessment Years 2012-13, 2013-14, 2014-15, and 2016-17 respectively.

AY 2012-13:
1. Challenge to the order passed by Ld. CIT(A) u/s 250 of the Act.
2. Disallowance of depreciation on international transaction of development expenses.
3. Dispute regarding arm's length principle and disallowance of depreciation.
4. Interpretation of grounds of appeal and dismissal of appeal.
5. Non-adjudication of penalty proceedings u/s 271(1)(c).

AY 2013-14:
1. Challenge to the order passed by Ld. CIT(A) u/s 250 of the Act.
2. Disallowance of depreciation on international transaction of development expenses.
3. Dispute regarding arm's length principle and disallowance of depreciation.
4. Interpretation of grounds of appeal and dismissal of appeal.
5. Non-adjudication of penalty proceedings u/s 271(1)(c) and interest charged u/s 234C.

AY 2014-15:
1. Challenge to the order passed by Ld. CIT(A) u/s 250 of the Act.
2. Disallowance of depreciation on international transaction of development expenses.
3. Dispute regarding arm's length principle and disallowance of depreciation.
4. Interpretation of grounds of appeal and dismissal of appeal.
5. Non-adjudication of interest charged u/s 234A and 234B.

AY 2016-17:
1. Challenge to the order passed by Ld. CIT(A) u/s 250 of the Act.
2. Disallowance of depreciation on international transaction of development expenses.
3. Dispute regarding arm's length principle and disallowance of depreciation.
4. Interpretation of grounds of appeal and dismissal of appeal.

The issues in these appeals are related to the transfer pricing issue arising in the case of the assessee for AY 2011-12. The dispute regarding capitalization of expenses in AY 2011-12 was restored to the file of the Ld. CIT(A) by the Co-ordinate Bench of ITAT, Delhi. The present appeals cannot be decided until the dispute regarding capitalization of expenses is resolved. Therefore, the issues in dispute in the present appeals are restored to the file of the Ld. CIT(A) for fresh order in accordance with law.

All grounds of appeal are treated as disposed off in accordance with the directions. For statistical purposes, all the four appeals are treated as partly allowed.