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TMI Blog2015 (8) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... r providing due opportunity of being heard will decide in accordance with law. - Decided in favour of assessee for statistical purposes. Reallocation of head office expenses - Held that:- The crux of argument advanced on behalf of the assessee is that certain common expenses, amongst all the units, may be made on reasonable basis. On the other hand, the ld. DR, Shri Srivastava, defended the conclusion arrived at in the impugned order. Since, this ground is interconnected with the above ground, therefore, this ground is also remanded back to the file of the ld. Assessing Officer, consequently, The ld. Assessing Officer is directed to look into the allocation part/the claimed expenses and after examination, decide afresh - Decided in favour of assessee for statistical purposes. Disallowance made u/s 14A - Held that:- Without going into much deliberation, we direct the ld. Assessing Officer to decide the case of the assessee in the light of the decision from Hon'ble jurisdictional High Court pronouncing in Godrej & Boyce Mfg. Co. Ltd. vs DCIT [2010 (8) TMI 77 - BOMBAY HIGH COURT ] and also by duly considering the decision of Hon'ble Supreme Court in the case of Rajendra Prasad M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.D. Srivastava, ld. DR. However, he defended the conclusion arrived at in the impugned order by submitting that the assessee has not adduced any evidence at any stage to the effect that it was not expansion of existing business and further added that no substantial investment was made in the new plant and machinery by the assessee. 2.2. We have considered the rival submissions and perused the material available on record. Before coming to any conclusion, we are reproducing hereunder the relevant factual finding recorded by the ld. DRP for ready reference:- The assessee has 5 units all engaged in providing ITeS services and they are having income as under: Sl. No. Unit No. Net Profits/(Loss) in Rs. Remarks 1 I (5339669) 2. II 44,46,49,552 Claimed as deduction u/s 10A 3. III 8,85,74,133 Claimed as deduction u/s 10A 4. IV 24493249 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is allowable to units being expansion of existing units on the ground that ITAT has recorded a finding that the new units set up in that case fulfilled all the conditions prescribed under section 10A(2) of the Act. The 3 units were separate and' independent units and cannot be treated as mere expansion of existing units and up held the order for the reasons that it is a finding of fact and no question of law is involved. Therefore, this is a decision on facts in that case and cannot be held to a decision of general application. 2.4.1 We have considered the order of the AD and the submissions of the assessee. Although assessee has made various submissions in support of its contentions, we find that the matter is still under litigation and has not attained finality. We note that in the order in its own case, Hon'ble ITAT Mumbai has restored the matter for fresh examination by the AD in light of the decision of Hon'ble Pune ITAT in Patni Computers and also other evidences. The Hon'ble ITAT has further directed that the letters including letter dated 10/12/2008 issued by Director STPI should also be looked into. Before us, the assessee has not been able to comprehen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act and as these units are only expansion of existing undertaking, the said units are not independent units and hence, would not be entitled to deduction under section 10A of the Act. We have also considered the facts that this issue has been examined by the CIT (A) and the earlier DRP. The AO's approach has been confirmed by both the above authorities. We have particularly considered the order of DRP for the A.Y.2008-09. In this order, the Hon'ble Panel has observed that detailed correspondences between the Directorate of Investigation and the Director of STPI, 8angalore, show that the assessee never sought fresh registration for establishing a new undertaking for claiming deduction u/s.10A. This is a pre-requirement even as per Foreign Trade Policy of the Government of light of the above discussion, we uphold the addition made by the AO. 2.3. If the observation made in the assessment order, conclusion drawn in the impugned order, material available on record and the assertions made by the ld respective counsel, if kept in juxtaposition and analyzed, we find that the assessee company had five units, all engaged in providing ITeS services. The assessee claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n plant and machinery. The ld. Assessing Officer is also to examine whether unit no. II and III/other units are merely expansion of unit no.I or it was merely a change of nomenclature by the assessee. The AO is directed to examine the issue afresh, uninfluenced by any other order, whether the assessee has fulfilled the conditions stipulated in the Act and more specifically within the parameter of section 10A of the Act. The assessee is directed to furnish necessary details, if any, before the AO in support of its claim, therefore, this ground is allowed for statistical purposes only. 3. The next ground i.e. ground no. 3 pertains to reallocation of head office expenses. The crux of argument advanced on behalf of the assessee is that certain common expenses, amongst all the units, may be made on reasonable basis. On the other hand, the ld. DR, Shri Srivastava, defended the conclusion arrived at in the impugned order. Since, this ground is interconnected with the above ground, therefore, this ground is also remanded back to the file of the ld. Assessing Officer, consequently, The ld. Assessing Officer is directed to look into the allocation part/the claimed expenses and after exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee/corporate membership fee wholly and exclusively in the interest of the business, thus, it has to be allowed as business expenditure. Identical ratio was laid down in CIT vs Samtel Color Ltd. (2009) 180 taxman 82(Del.) . The assessee is directed to ensure that such benefit is only available to the Director/Senior Executive of the assessee company and not to each and every employee of the assessee company. This ground of the assessee is therefore, allowed. 6. The next ground i.e. no. 6 is connected to the above ground, therefore, automatically disposed off. 7. The next ground i.e. no. 7 pertains to addition of ₹ 56,53.867/- that the ld. TPO erred in recommending in adjustment and the ld. DRP erred in not deleting the said adjustment on account of interest received on loans given to AE. We find that this issue is covered by the decision of the Tribunal in the case of assessee itself order dated 5th June, 2013 (35 taxman.com 348)(Mum.). The relevant portion of the same is reproduced hereunder: 17. We have carefully considered the rival submissions and perused the record. The case of the assessee was that LIBOR as on 31.03.2008 was 2.49% against which the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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