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TMI Blog2017 (9) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income-tax, New Delhi pursuant to the order dated November 4, 2016 by the Dispute Resolution Panel-1, New Delhi. 2. Brief facts of the case are that the assessee Fino Paytech Ltd. was earlier M/s. Alpha Payments Service India P. Ltd. It has been engaged in the business of developing, testing, marketing, selling, buying, deploying, exporting, importing, designing, coding and making hardware and/or software systems and solutions for the relating to or in connection with electronic payment and mobile banking systems and during the year the assessee company is not engaged in the any business activity. For the assessment year 2012-13 the assessee filed return of income on November 27, 2012 showing an income of Rs. 7,25,06,370. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any for cost reimbursement as well as transfer pricing. The voluntary disallowance of Rs. 18,63,61,346 was accepted by the Department. However, since the agreement was finalised only on May 18, 2012 initially the expenditure was debited to the profit and loss account but when the reimbursement was received during the assessment year under consideration it was credited to the profit and loss account. The learned authorised representative argued that though for the assessment 2011-12 the expenditure was debited to the profit and loss account but still during the computation of income, such claim for deduction of such expenditure was withdrawn, as such when the amount was received, though it was credited to the profit and loss account, the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence was placed before the Assessing Officer in support of the contention of the assessee and the very fact that the agreement dated May 18, 2012 between Nokia Corporation and Alpha Payment Services India P. Ltd. with retrospective operation shows that such an agreement is an afterthought, more particularly in view of the fact that the agreement with OBOPAY has never seen the light of the day. Lastly by placing reliance on the decision of Somdutt v. Asst. CIT passed by a co-ordinate Bench of the Kolkata Tribunal, It is submitted that it is the duty of the assessee to discharge the onus that the amount credited in the books of account is not the real income and is exempt from tax. On this aspect the learned Departmental representative al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the revised computation of income and offered the same for tax. Whether or not the sum of Rs. 13,21,53,000 was capital expenditure, the fact remains that no deduction was claimed and tax was paid on it. 6. Now coming to the contention of the Revenue that the said amount was shown as revenue expenditure in the earlier year, it is not open for the Revenue to contend so inasmuch as it has accepted the version of the assessee while withdrawing the claim for the deduction of such expenditure, contending that in view of cost reimbursement agreement with the parent entity the said amount is reimbursable as such the same is not claimed as deduction. It is patent to note that the revised computation for the assessment year 2011-12 was filed on Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 490 was credited to the profit and loss account, we hold that the assessee has rightly deleted the said amounts from computation of income for the assessment year 2012-13 though the same was credited to the profit and loss account. It is only an adjustment of book entries and there is no real income for the assessment year 2012-13. However, the sum representing the 4 per cent. of mark-up as per the transfer pricing agreement to a tune of Rs. 21,76,540 is revenue in nature and the income of the assessee during the assessment year 2012-13. Therefore, the additions of Rs. 13,21,53,000 and Rs. 5,44,13,490 are liable to be deleted, whereas the sum of Rs. 21,76,540 has to be sustained. We, therefore, direct the Assessing Officer to delete Rs. 13, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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