9911796707
TMI Blog2017 (5) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... ective A.Ys. 2. Briefly stated, Assessee is engaged in the business of fabrication, supply, erection and maintenance of telecom towers. It caters to telecom infrastructure and has transactions with AEs- Aster infrastructure services Ltd., Afghanistan and Aster Global Services Ltd., Mauritius, which are associate enterprises of Assessee. The transactions were analyzed in respective A.Ys under transfer pricing provisions and there are additions made under the transfer pricing provisions as well as the other provisions of the Act. A.Y 2010-11 ITA No. 220/Hyd/2015 3. In this year Assessee had international transactions with its associate enterprises which were accepted by the Transfer Pricing Officer (TPO) after due analysis. However, as as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rival contentions and perused the orders placed on record. The contention that Corporate guarantee does not fall under the Transfer Pricing Previsions, in view of the amendment brought to the provisions, was not pressed by Ld. Counsel and agreed for restricting for the same to 0.25%, which was considered by the Coordinate Bench in the case of Asian Paints Ltd., Vs ACIT (supra). The difference in interest charged on the loan cannot be considered as a guarantee commission fee as the parameter for obtaining a loan at a particular interest rate is different from providing Corporate guarantee. Thus there is no basis for determining @ 6% by the DRP. In the above referred case of Asian Paints Ltd, after analyzing the various guarantee Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osing stock. It is observed by A.O that Assessee has debited excise duty from the sales of finished goods. But Assessee was also debiting the Excise duty on finished goods to the Profit and Loss account under the head administrative expenses. The A.O was not convinced with the explanation of Assessee that the Excise duty on finished goods debited separately to Profit and Loss account is provision for unfinished goods, as the management prepares monthly MIS report. It was submitted before the DRP that when the sales are accounted clear of Excise duty as per Accounting Standard-9, which is consistently followed by Assessee company, the Excise duty debited to Profit & Loss account under the head administrative expenses represents the differenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d allowed for statistical purposes. 8. Even though in the original grounds a ground was raised with references to addition of Rs. 25,000/- being the entry tax payable, in the revised grounds the same was not contested and accordingly the ground was treated as withdrawn. 9. In the result appeal filed by Assessee is considered partly allowed. A.Y 2011-12 ITA No. 458/Hyd/2016 10. In this year, Assessee is contesting the addition made towards Corporate guarantee fee, interest on loan to AE, addition towards reimbursement expenditure and disallowance of expenditure claim u/s 37(1) of the IT Act. Corporate Guarantee Fee: 11. The TPO has proposed addition towards fees for Corporate guarantee at Rs. 93,09,761/- on total Corporate guarantee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2,09,500/- confirmed by the DRP stands deleted. The grounds on this issue are accordingly allowed. Addition on Reimbursement of Expenditure: 14. Assessee has received reimbursement of expenditure to the tune of 6.35 crores on cost to cost basis, which was not part of profit and loss account nor operating expenditure. The TPO has made an addition of Rs. 63,56,971/- being 10% of the reimbursement amount, as fees on the transactions. The DRP has restricted the fees for reimbursement 5% and addition was restricted to 31,78,485/-. It was the submission that the reimbursement of expenditure was made on cost to cost basis and does not part of profit and loss account of Assessee, therefore no adjustment is warranted. It was also submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture was incurred on the contractual obligations and necessary for the purpose of business. It was further submitted that books of accounts are audited and tax audit report has not reported any discrepancies. The DRP has considered the same as under: "Having considered the submissions, though the assessee has taken additional grounds towards disallowance of expenditure which was made by the A.O during the course of assessment proceedings @ 10% of expenses on sales promotion, off ice maintenance and out of pocket and 5% on site maintenance. The AO has mentioned in the order that the same was agreed to by the AR before the AO. Hence filing additional grounds is not in order. The Hon'ble jurisdictional IT AT Hyderabad had held in several de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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