9911796707
TMI Blog2018 (4) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... s business expenditure allowable u/s 37 of the Act, allowed the claim of the assessee. Respectfully following the decision of the tribunal in assessee’s own case we direct the AO to allow the claim of the assessee for deduction. Provision for replacement guarantee allowable. Direct the AO to allow the lease rent paid as deduction. Short credit of tax deducted at source - action of the AO in not granting credit of tax deducted at source - Held that:- AO is permitted to waive the claim of the assessee and allow appropriate credit for TDS. X X X X Extracts X X X X X X X X Extracts X X X X ..... s chosen by the Assessee in its TP study. The TPO on his own selected some comparable companies and arrived at a total set of nine comparable companies and the arithmetic mean of the profit margin of these comparable companies was arrived at by the TPO at 18.61%. The TPO by his order 28.10.2010 passed u/s 92CA(3) of the Act, suggested an adjustment on account of arms length price at ₹ 25.08 crores for the following reasons :- "12. Based on the above, the comparables mentioned in notice u/s 92CA(2) of the Act dated 22.09.2010 are found to be appropriate. Based on the availability of Annual Reports, the three companies suggested by the assessee are also being included in the comparability analysis and figures are taken from consolidated financials. This presents the following picture : Sl.No. Name of the Company FY 2006- 07 OP/TC(%) 1. Aftek Ltd. 32.27 2. Aztec Software Ltd. 17.06 3. KPIT Cummins Infosystems Ltd. 12.92 4. Prithvi Information Systems Ltd. 12.50 5. Zylog Systems Ltd. 15.54 6. Megasoft Ltd. 19.98 7. Subex Azure Ltd. 18.41 8. Sasken Communications Technologies Ltd. 13.37 9. 3i Infotech Ltd. 25.47 Arithmetic mean 18.61 13. The arith ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... working capital adjustment. 3 Variation of 5% from the arithmetic mean The TPO, DCIT and the DRP erred in law in not granting the benefit of +/- 5 per cent variance as per proviso to section 92C(2) of the Act. 4 Determination of arm's length price 4.1 The DRP and the DCIT erred in reaching a conclusion that a transfer pricing adjustment needs to be made in the hands of the Appellant. Without prejudice to the generality of the above, the DRP and the DCIT erred in making a transfer pricing adjustment on the basis that the Appellant should have made operating margin! total cost margin of 18.61 % with respect to its software development activities. 4.2 The TPO, DCIT and DRP erred in facts and in law while rejecting the value of the international transactions as recorded in the books of account as being at arm's length. 4.3 The DRP and TPO erred in rejecting the transfer pricing study conducted by the Appellant. 4.4 The DRP and the TPO erred in arbitrary selection of certain comparable companies which were functionally dissimilar to the Appellant. 4.5 The DRP and the TPO erred in law and on facts in rejecting certain comparable companies based on application of arbitrar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 'Management Discussion & Analysis of Financial Conditions and Results of Consolidated Operations' have been highlighted. It is observed that the company has for the first time charged 'Software Development Cost' to its P&L account with the remark that "We started writing off the Software Development costs, which till FY2006 used to be capitalized". Accordingly, in computing the PLI, the TPO has removed this item being extraordinary in nature for the relevant Financial Year. The Panel has considered this carefully and is of the view that this item is extraordinary in nature given the fact that in earlier years the comparable company was capitalizing this amount. In these circumstances, the Panel is of the view that no interference in this regard in the action of the TPO is called for." 9. As far as Aftek Ltd is concerned this was also a company chosen by the assessee in its TP study as a comparable company. As far as this company is concerned, the assesee had objected to inclusion of this company as a comparable company even before the TPO and the TPO rejected the claim of the assessee with the follows : "10.2. The assessee has requested to remove Aftek Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies; 2.2. It is functionally not comparable with the Appellant as it offers wide range of software products, software development and consulting services, IT enabled service activities, IT infrastructure services and Business Process Outsourcing software services, software products and embedded solutions; 2.3. No segmental data is available vis-a-vis its various activities; 2.4. It owns significant intangible assets which the Appellant does not own/possesses 2.5. It was engaged in significant research and development activities; 2.6. During the year under consideration it has acquired various companies." 12. It has been mentioned in the application for admitting the additional ground that though these two companies were included as comparable companies in the TP study done of the assessee, it later transpired that these companies were not comparable companies and therefore the same should not be regarded as a comparable company. The assessee has also placed reliance on ITAT Chandigarh Special Bench in the case of Qua Systems Pvt. Ltd. (2010) 4 ITR (Trib) 606 (SB)(Chandigarh). The Special Bench took the view that Transfer Pricing law in India was still an evolving legislation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are services. This company offers wide range of software products, software development and consulting services, IT enabled service activities, IT infrastructure services and Business Process Outsourcing (BPO). Also the company is engaged in banking & financial services. It also has IPR driven solutions for Bank9ing, Insurance, Mutual Funds and Capital Markets. Also from the Annual Report, it is evident that the company has 50: 50 mix of services and product. [Page 102,104,110,58,119] - No segment data available : The company derives income from software products and software services. However no disclosure on segmental information is available in the standalone financial statements of the company. [Page 119] - Significant Research & Development activity - 11.02% : The company is also involved in significant R & D activities. During the FY 2006-07 the R & D expenditure amounted to 11.02% of the total revenue of the company. [Page- 11 & 5] - Significant Intangibles - 23.80% : The company has intangible assets in the form of goodwill and Business & Commercial rights. The total amount of intangibles is 23.90% of total fixed assets. [Page 95 & 104] - Acquisitions during the yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices Ltd. 2007-08 TS-3 ITAT- 2017(CHNY)-TP Para -8.3, (Pg No. 20/44) 26 8. Sharp Software Development India P. Ltd. 2007-08 [2016] 76 taxman.com 340 (Bangaluru-Trib) Para 17.3, (Pg. No. 17/23) 27 9. CSR India (P) Ltd. 2007-08 [2013] 31 taxman.com 265 (Bangaluru-Trib) Para 3.4.2., (Pg. No.3 & 11) 28 On account of Research & Development Activities 1. Caliberated Healthcare Systems India Pvt. Ltd. AY 2007- 08 TS-413-ITAT- 2014 (DEL)-TP Para-5, (Pg no.4/10) 29 2. Element K India Private Ltd. AY 2007- 08 [2015] 54 taxman.com 296 (Delhi-Trib) Para 18 (Pg. No. 12 & 13/19) 30 3. Principal Global Services Limited AY 2007- 08 [2016] 69 taxman.com 210 (Pune-Trib) Para 21., (Pg. No. 14&15/16 ) 31 On account of Significant Intangibles 1. Tesco Hindustan Service Centre Pvt. Ltd. 2007-08 [2017] 77 taxman.com 48 (Bangalore-Trib) Para 12.4 (Pg. No.13/34) 7 2. Marlabs Software Pvt Ltd 2007-08 TS-922-ITAT- 2016 (Bang)-TP Para 14.3 (Pg no.17/36) 11 3. Global e-Business Operations Pvt. Ltd. 2007-08 TS-35-ITAT- 2017(Bang)-TP Para 3/7 (Pg no.7,13) 12 4. H&S Software Development and Knowledge Management Centre Pvt. Ltd. 2007-08 TS-31-ITAT- 2017(DEL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TS-1010-ITAT- 2016(Bang)-TP Para 18.3.1 (Pg no. 25/34) 14 On account of Segmental Information not available 1. Witness Systems Software India (P) Ltd. 2007-08 [2013] 34 taxman.com 183 (Bangalore-Trib) Para 15, (Pg. No.16/19) 20 2. AMD India (P) Limited 2008-09 61 taxmann.com 35 Bangalore-Trib) Para 17.4, Pg. No.29/30) 21 3. Mis. Radisys India P. Ltd. 2010-11 TS-489-ITAT-2015 (Bang) Para 20, (Pg. No.9 & 10/15) 22 4. M/s ARM Embedded Technologies Pvt. Ltd. 2006-07 & 2007- 08 TS-669 ITAT- 2015(Bang)-TP Para 7.2, (Pg. No.13/77 ) 23 5. Telcordia Technologes India (P) Ltd. 2007-08 [2012] 22 taxmann.com 96 (Mum) Para 7.2, (Pg. No.3/16 ) 24 6. M/s NTT Data India Enterprises Application Services Private Limited Hyderbad 2007-08 TS-39 ITAT-2016 (HYD) - TP Para-7.4, (Pg no.9/23) 25 7. M/s. Polaris Consulting & Services Ltd. 2007-08 TS-3 ITAT- 2017(CHNY)-TP Para-8.3, (Pg No. 20/44) 26 8. Sharp Software Development India P. Ltd. 2007-08 [2016] 76 taxman.com 340 (Bangaluru-Trib) Para 17.3, (Pg. No. 17/23) 27 9. CSR India (P) Ltd. 2007-08 [2013] 31 taxman.com 265 (Bangaluru-Trib) Para 3.4.2., (Pg. No. 3 & 11) 28 On account of Mergers 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us. We make it clear that the factual details given on the comparability alone should be examined and factually if the data is found correct, then the aforesaid two companies should be excluded from the list of comparable companies. 19. The next grievance of the assessee is with regard to the action of the TPO and DRP in not giving appropriate adjustments to the profit margin of the comparable companies and of the Assessee on account of working capital adjustment. On the question of working capital adjustment the DRP in its order has made the following observations :- "The assesee also had with it the data required for computation of working capital adjustment but it did not make any such computation. The OECD Guidelines of May 2006, have been cited profusely by the assessee in respect of its arguments pertaining to use of data and various aspects of comparability but the assessee has neither furnished any details in this regard nor used this guidelines for computing the working capital adjustment and therefore it is not allowable. " 20. The ld. Counsel pointed out that the observations of the DRP that the assessee does not give the required data for computation of working capi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjustment of (-2%) is given towards working capital level differences and also towards risk level differences. " 22. After considering the submissions of the learned counsel for the Assessee, we are of the view that similar adjustments should also be allowed in the present assessment year. We hold and direct accordingly. We also observe that the principle reasons assigned by the DRP in the present assessment year was lack of details furnished by the assessee. In this regard we find that all the details have been given by the assessee in its transfer pricing study and we find that the observations of the DRP in this regard cannot be sustained. We accordingly direct that adjustment of 2% towards working capital adjustment and risk adjustment should be allowed to the assessee as was done in A.Y.2004-05. We hold and direct accordingly." 23. The ld. DR submitted that the working capital adjustment should be based on the formula usually employed in computing the working capital adjustment. His submissions was that the working capital adjustment may be directed to compute by the assessee based on the formula and the TPO should be directed to consider the same. 24. We have considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee reads as follows :- " 7 Provision for replacement guarantee The DRP and DCIT erred in law and on facts in disallowing ₹ 1,45,98,000 being the excess of provision for replacement Guarantee over actual payment." 30. The facts with regard to ground no.7 are that during the relevant assessment year the assessee has made provision for replacement guarantee amounting to ₹ 29,12,44,000/- and actually paid amounting to ₹ 27,66,46,000/-. The Assessee is mainly engaged in the manufacture and sale of durable consumer electronics goods like television sets, domestic appliances etc. These products carry a warranty period. The warranty period varies from product to product. During the warranty period, the cost of repairs is to be borne by the Assessee including the cost of spare parts to be replaced. The methodology for computation of warranty provision in the case of consumer electronics was furnished by the Assessee. The same is given as Annexure-B to this order. 31. The AO has disallowed the excess of Provision for Replacement Guarantee over actual payment amounting to ₹ 1,45,98,000/- treating the same as excess provision. The assessee has contes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th price and the PLI chosen by the assessee were identical as in A.Y.2007-08. The assessee chose nine comparable companies whose arithmetic mean of operating margin was 3.1%. The assesse's PLI was 13.76% computed in the following manner :- Philips Electronics India Ltd Assessment year 2008-2009 P/L details for Software Division Rs. in Min Particulars Amount Turnover 2,512 Less: Expenses Depreciation 166 Salaries, Wages, Bonus, Comtn. 999 Contrb to Pension & Prov Fund 53 Staff Welfare 66 Rent 72 Power & Fuel 37 Insurance 14 Repairs/Maint: Buildings 24 Travelling & Conveyance 209 Reimbur, of Motor Car Exps 8 Postage/Stationery/Office Exps 113 Packing, Freight & Transport 4 Consultant Fees 200 Miscelleneous 243 Transfer from corporate Total Expenses 2,208 Operating Profit 304 Operating profit % on total cost 13.76 The assessee claimed that the price charged in the international transaction was at arms length as it was higher than the arithmetic mean of profit margin of comparable companies. 36. The Transfer Pricing Officer (TPO) on a reference by the AO chose seven comparable companies whose arithmetic mean of profit margin was 23.18%. The T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and void abinitio . 1. 2. That Learned DRP erred in not holding that the order of TPO and the draft order of the AO (in so far it relates to transfer pricing proceedings) are invalid and void ab initio as the conditions of 92C(3) of the Act have not been satisfied. 2. Determination of arm's length price 2.1. The Learned AO, TPO and DRP erred in making an adjustment to the Arm's Length Price (hereinafter referred as 'ALP') of international transaction relating to software development services rendered by the Appellant and in not accepting the ALP of the international transaction as recorded in the books of account by the Appellant. 2.2. Without prejudice to the generality of the above, the Learned AO, DRP and the TPO erred in making a transfer pricing adjustment on the basis that the Appellant should have made operating margin/ total cost margin of 23.18% with respect to its software development services. 3. Selection of comparable companies 3.1. The Learned AO, DRP and the TPO erred on facts and in law in rejecting transfer pricing study conducted by the Appellant and the comparables selected by the Appellant. 3.2. The Learned AO, DRP and the TPO erred on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rable companies out of the seven comparable companies ultimately chosen by the TPO in A.Y.2008-09. The three companies which are sought to be excluded by the assessee in this appeal before the Tribunal are Aftek Ltd , 3i Infotech Ltd and Persistent System Ltd. 39. As far as 3i Infotech Lt and Aftek Ltd are concerned these companies were not chosen as comparable companies by the assessee in its TP study. Peristent System Ltd has been chosen as a comparable company by the assessee in its TP study. As far as Aftek Ltd. And 3i Infotech Ltd is concerned the DRP accepted the order of the AO without any discussion. In para-12 of the TPO's order the objection of the assessee for including these three companies in the list of comparable companies has been set out. As far as Aftek Lt the objection of the assessee was that this company owned substantial intangibles and the assessee did not own any intangible and therefore this company should not be regarded as a comparable company. As far as 3i Infotech Ltd is concerned this was also sought to be excluded on the ground of functional dissimilarity. The TPO rejected the claim of the assesswee on the basis that these two companies has been sele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mited 2008-09 [2017] 79 taxman.com 85 (Hyderabad-Trib) Para 14.2 (Pg. No.12/13) 20 2. Tektronix Engineering Development India Pvt. Ltd. 2008-09 [2016] 75 taxman.com 276 (Hyderabad-Trib) Para 9.4.1, (Pg no.11/20) 21 3. 2008-09 2007-08 TS-220-ITAT- 2017 (Delhi)-TP Para 31.2,31.3 (Pg no. 55, 56/64) 22 4. MSC Software Corporation India Pvt. Ltd. 2008-09 TS-226-ITAT- 2017 (PUN)-TP Para 28, (Pg no. 16/18) 23 5. Tesco Hindustan Service Centre Pvt. Ltd. 2007-08 [2017] 77 taxmann.com 48 (Bangalore-Trib.) Par 12.4, (Pg. no.13/34) 7 6. Marlabs Software Pvt. Ltd. 2007-08 TS-922-ITAT- 2016 (Bang)-TP Para 14.3 (Pg no. 17/36) 11 7. Global e-Business Operations Pvt. Ltd. 2007-08 TS-35-ITAT-2017 (Bang)-TP no. 7,13) Para3/7 (Pg 12 8. H&S Software Development and Knowledge Management Centre Pvt. Ltd. 2007-08 TS-31-ITAT-2017(DEL)-TP Para 34&40 Page 17/21 13 On account of Segmental Information not available 1. Avaya India Pvt. Ltd. 2008-09 TS-452-HC-2017(DEL)-TP Para 2,3, (Pg. No.1,2/2) 28 2. Adidas Technical Services P. Ltd. 2010-11 [2016] 69 taxman.com 401 (Delhi-Trib) Para 12.8, (Pg. No.11/13) 29 3. Open Solutions Software Services 2010-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... % : The company is also involved in significant R & D activities. During the FY 2007-08 the R & D expenditure amounted to 8.76% of the total revenue of the company. [Page 11] -Significant Intangibles - 45.29% : The company has intangible assets in the form of goodwill and Business & Commercial rights. The total amount of intangibles is 43.29%% of total fixed assets. [Page - 97] - Merger & Acquisitions during the year : During the year under consideration the company has completed merger with SDG Software Technologies Limited and Datacons private limited, Further the company has also acquired stakes in various companies. [Page 5] Sl. No. Relevant case law Assessment Year Broad Reason for Rejection Citation Para & Page No. 1. Philips India Limited 2009-10 Functionally different & RPT ITA No.1141/Kol/2019 Para 5.5 (Pg no.37,38/42) Sl.No . Relevant case Law Assessment Year Citation Para & Page No. Sr. No. of Case Law Binder On account of Segmental Information not available 1. Avaya India Pvt. Ltd. 2008-09 TS-452-HC- 2017 (DEL)-TP Para 2,3, (Pg. No.1,2/2) 28 2. Adidas Technical Services P. Ltd. 2010-11 [2016] 69 taxman.com 401 (Delhi-Trib) Para 12.8, ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2015] 54 taxman.com 296 (Delhi-Trib) Para 18 (Pg. No. 12 & 13/19) 30 3. Principal Global Services Limited AY 2007- 08 [2016] 69 taxman.com 210 (Pune-Trib) Para 21., (Pg. No. 14&15/16 ) 31 On account of Significant Intangibles 1 BA Continuum India Private Limited 2008-09 [2017] 79 taxman.com 85 (Hyderabad-Trib) Para 14.2 (Pg. No.12/13) 20 2. Tektronix Engineering Development India Pvt. Ltd. 2008-09 [2016] 75 taxman.com 276 (Hyderabad-Trib) Para 9.4.1, (Pg no.11/20) 21 3. Corporate Executive Board India Pvt. Ltd. 2008-09 TS-220-ITAT- 2017 (Delhi)-TP Para 31.2,31.3(Pg no.55,56/64) 22 4. MSC Software Corporation India Pvt. Ltd. 2008-09 TS-226-ITAT- 2017 (PUN)-TP Para 28, (Pg no.16/18) 23 5. Tesco Hindustan Service Centre Pvt. Ltd. 2007-08 [2017] 77 taxmann.com 48 (Bangalore-Trib.) Para 12.4, (Pg.no.13/34) 7 6. Marlabs Software Pvt. Ltd. 2007-08 TS-922-ITAT- 2016 (Bang)-TP Para 14.3(Pg no.17/36) 11 7. Global e- Business Operations Pvt. Ltd. 2007-08 TS-35-ITAT- 2017 (Bang)-TP Para3/7(Pg no.7,13) 12 8. H&S Software Development and Knowledge Management Centre Pvt. Ltd. 2007-08 TS-31-ITAT- 2017 (DEL)-TP Para 34&40 Page 17/21 13 On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law prevailing on the subject, '3i Infotech t.td.' cannot be considered as a comparable company while bench marking the international transactions in relation to software development services rendered by the Appellant to its Associated Enterprise ("AE") for the following specific reasons amongst other reasons: - 2.1. It is functionally not comparable with the Appellant as it offers wide range of software products, software development and consulting services, IT enabled service activities, IT infrastructure services and Business Process Outsourcing software services, software products and embedded solutions; 2.2. No segmental data is available vis-a-vis its various activities; 2.3. It owns significant intangible assets which the Appellant does not own/possesses 2.4. It was engaged in significant research and development activities; 2.5. During the year under consideration it has acquired various companies. 2.6. It has entered into transactions with related parties. 3. Re.: The Appellant submits that, notwithstanding the fact that it had considered 'Persistent Systems Ltd.' as a comparable company before the lower authorities, considering the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id IT Consulting Private Limited 2008-09 Functionally different & segmental not available TS-425-ITAT- 2014 (DEL)-TP Para- 34,50,(Pg No.22,33/34) 4. Open Solutions Software Services 2010-11 Functionally different & segmental not available [2017] 81 taxmann.com 177 (Delhi-Trib.) Para - 9, (Pg No.7/9) 5. NXP Semi Conductors India Pvt. Ltd. 2008-09 Functionally different [2015]56 taxmann.com 140 (Bangalore-Trib.) Para - 19.3.2 (Pg No.23/27) 6. Bearing point Property services Private Limited 2008-09 Segmental not available [2014] 52 taxmann.com 96 (Bangalore - Trib.] Para - 15, 16 (Pg No.13/23) 7. Ciena India Pvt. Ltd. 2008-09 Segmental not available [2015] 57 taxmann.com 329 (Delhi Trib.) Para - 9.2, (Pg No.- 9/13) 8. Global Logic India Pvt. Ltd. 2008-09 Functionally different [2015] 59 taxmann.com 433 (Delhi-Trib.) Para-16,(Pg No.11/12) 9. GXS India Technology Centre Pvt. Ltd. 2008-09 Functionally different [2015] 62 taxmann.com 276 (Bangalore - Trib.) Para- 13.3,(Pg No.20/28) 10. PMC - Sierra India Pvt. Ltd. 2008-09 Segmental not available [2015] 74 taxmann.com 110 (Bangalore - Trib.) Para- 17.3,(Pg No.26/30) 11. Trilogy E-Business Sof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions rendered by the tribunal cited by the ld. Counsel for the assessee before us. The TPO will also follow directions given in AY 2007-08 in the earlier part of this order. 47. The next grievance of the assessee is with regard to the action of the TPO and DRP in not giving appropriate adjustments to the profit margin of the comparable companies and of the Assessee on account of working capital adjustment. On the question of working capital adjustment the DRP in its order in para-13 rejected the request for adjustment on account of working capital by following its order in Assessee's case for AY 2007-08. 48. We have heard the rival submissions on this issue which is identical to the submissions made in AY 2007-08 which we have discussed in the earlier part of this order. As decided in AY 2007-08, we are of the view that the issue should be set aside to the AO for fresh consideration. The Assessee should file computation of working capital adjustment as per formula for calculating the working capital adjustment before the TPO. The TPO is directed to examine the working capital adjustment in accordance with law. 49. In view of the aforesaid conclusion we are of the view that othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereby leading to double disallowance to the extent of ₹ 2,400,000. Without prejudice to the above contention, it was submitted that if the lease rentals are regarded as capital expenditure then the AO ought to have allowed depreciation on such lease rent payment. 54. The DRP rejected the plea of the Assessee on the ground that in AY 2003-04, on similar facts the disallowance of lease rentals claimed on vehicles was confirmed by the ITAT too. The ITAT then upheld that the disallowance on the logic that the payments were not revenue in nature. The AO has made the disallowance as facts are identical to facts in A Y 2003-04. Hence, the DRP rejected the objection relating to the allowance of lease rentals. In so far as the question of allowance of depreciation is concerned, the DRP held that since the claim of depreciation was not made before the A O, the same cannot be allowed. 55. Before us it was agreed by the parties that similar issue raised in assessee's own case was considered and decided by the tribunal in ITA No.1141/Kol/2016 for A.Y.2009-10 order dated 05.04.2017 and ITA No.505/Kol/20156 and ITA No.2408/Kol/2016 for A.Y.2009-10 order dated 27.06.2017. For A.Y.2009-10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be entitled to the deduction of rent paid by him and the benefit of the depreciation shall be available to owner of the asset. Further the Special Leave Petition (SLP) filed by the department against the said decision before the Hon'ble Supreme Court has been dismissed . He further placed reliance on the co-ordinate bench decision of this tribunal in the case of The Royal Bank of Scotland N.V. vs DDIT in ITA No. 1738/Kol/2009, 1926/Kol/2010 , 519/Kol/2011 and 1805/Kol/2012) dated 13.4.2016 wherein on identical matter, the issue was decided in favour of the assessee. In response to this, the ld DR fairly conceded that the issue is covered by the decision of the Hon'ble Supreme Court in the case of ICDS Ltd supra. 6.2. We have heard the rival submissions. We find that the issue under dispute is covered by the decision of the Hon'ble Supreme Court in the case of ICDS Ltd supra in favour of the assessee. Hence respectfully following the same, we allow the Ground No. 6 raised by the assessee. 56. Respectfully following the decision of the Tribunal referred to above we direct the AO to allow the lease rent paid as deduction. In view of the aforesaid decision in ground no.10 ground no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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