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TMI Blog2019 (5) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... f deduction. While doing so, the AO should also take note of assessee s contention that similar deduction claimed by the assessee in preceding assessment year was allowed. AO is also directed to decide the issue on merit keeping in view the decision of the Hon ble Gujarat High Court in Sun Pharmaceuticals India Ltd. [ 2009 (3) TMI 587 - GUJARAT HIGH COURT] and Delhi International Airport Pvt. Ltd [ 2017 (12) TMI 1214 - ITAT DELHI] and any other decision which may be cited by the assessee. With the aforesaid observations, this ground is allowed for statistical purposes. Disallowance of assessee s claim for excluding write back of provisions for doubtful debts / advances - HELD THAT:- Claim of the assessee, at least, should have been considered by learned DRP on merit, keeping in view the settled legal principle referred to earlier, rather than rejecting it on technical ground. Since assessee s claim was not considered on merits either by the AO or by DRP and was rejected on technical ground, we restore the issue back to the AO for examining assessee s claim on merit. While doing so, the Assessing Officer should also consider assessee s claim of double addition in respect of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Short TDS credit - HELD THAT:- We direct the Assessing Officer to allow actual credit for TDS after verifying assessee s claim. Levy of interest under section 234C - HELD THAT:- Interest u/s 234C of the Act has to be charged on the income returned by the assessee and not on the assessed income. Accordingly, we direct the Assessing Officer to compute interest u/s 234C on the income returned by the assessee. This ground is allowed. Validity of the order passed under section 92CA(3) - HELD THAT:- Undisputedly, the assessee has not challenged the validity of the order passed under section 92CA(3) either in the course of Transfer Pricing proceedings or even before DRP. For the first time, the assessee has raised the issue before the Tribunal. Though, the issue raised in the additional ground is a purely jurisdictional issue going to the root of the matter, hence, requires to be admitted, however, following our decision in assessment year 2006 07 (supra), we restore the issue to the Assessing Officer to decide the same after considering assessee s submissions. These grounds are allowed for statistical purposes. Assessee s appeal is partly allowed - ITA no. 5600/Mum./2011 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer rejecting the submissions of the assessee disallowed 5% of the exempt income towards expenditure for earning such income. The aforesaid disallowance made by the Assessing Officer was also upheld by learned DRP. 4. Shri Rajan Vora, learned Authorised Representative appearing for the assessee submitted, while dealing with identical issue in assessee s own case for the assessment year 2006 07 the Tribunal has restricted the disallowance under section 14A to 1% of the exempt income earned during the year. Therefore, he submitted, the disallowance in the impugned assessment year should also be restricted to 1% of the exempt income earned. 5. Shri Debashish Chanda, the learned Departmental Representative, though, agreed that in assessment year 2006 07 the Tribunal has restricted the disallowance to 1% of the exempt income, however, he relied upon the observations of the Assessing Officer and learned DRP. 6. We have considered rival submissions and perused material on record. As could be seen, the Assessing Officer on an ad hoc basis has disallowed 5% out of the exempt income earned towards expenditure attributable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d DRP also upheld the decision of the Assessing Officer relying upon the ratio laid down by the Hon'ble Supreme Court in Goetze (India) Ltd. Vs. CIT, [2006] 284 ITR 323 (SC). 9. Learned Authorised Representative submitted, though, the assessee may not have claimed the deduction either in the original or in the revised return of income, however, the assessee can raise such claim not only in the course of assessment proceedings, but before the appellate authorities also. In support of such contention, he relied upon the following decisions: i) CIT v/s Pruthvi Brokers Shareholders Pvt. Ltd., [2012] 349 ITR 336 (Bom.); and ii) Jute Corporation of India Ltd. v/s CIT, [1991] 187 ITR 688 (SC). 10. He submitted, in the assessment year 2006 07 also, though, the assessee had claimed similar deduction in the computation of income without having done so in the return of income, however, the Assessing Officer has allowed assessee s claim. He submitted, the deduction claimed by the assessee on account of amortization of upfront payment made towards lease hold land is an allowable deduction. In this context, he rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of assessee s claim for excluding write back of provisions for doubtful debts / advances. 15. Brief facts are, in the course of assessment proceedings the Assessing Officer found that in Note no.9 to computation of income, the assessee had claimed that in the assessment year 2004 05 and 2005 06, Tata Finance Ltd., which got amalgamated with the assessee in assessment year 2006 07, had claimed deduction in respect of provisions of doubtful debts / advances. It was stated that in the impugned assessment year, the assessee had reversed the provisions made in assessment years 2004 05 and 2005 06 and offered it to tax. It was submitted, though the actual reversal of provision during the year was ₹ 7,17,70,032, however, in the return of income the assessee had inadvertently offered an amount of ₹ 11,03,04,467. In this context, the assessee furnished a year wise break up of provisions made towards doubtful debts / advances. Further, it was submitted that deduction claimed towards provision for doubtful debt and advances in the assessment year 2004 05 was disallowed by the Assessing Officer while completing assessment under section 143(3) of r/w section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier, rather than rejecting it on technical ground. Since assessee s claim was not considered on merits either by the Assessing Officer or by learned DRP and was rejected on technical ground, we restore the issue back to the Assessing Officer for examining assessee s claim on merit. While doing so, the Assessing Officer should also consider assessee s claim of double addition in respect of the provision for bad debt pertaining to the assessment year 2004 05 and decide the issue on the basis of the decision of the Hon ble High Court on the said issue. It goes without saying, the Assessing Officer must afford reasonable opportunity of being heard to the assessee before deciding the issue. This ground is allowed for statistical purposes. 20. Ground no.4, is not pressed, hence, dismissed. 21. In ground no.5, the assessee has challenged disallowance of professional and legal fees amounting to ₹ 1,84,62,440. 22. Brief facts are, during the year, the assessee had incurred expenditure towards professional and legal fee in connection with proposed fund raising by way of divestment of its stake in subsidiary. This expenditure, tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chargeable on such loans @ 14% per annum. This resulted in an adjustment of ₹ 4,44,68,152, which was added back to the income of the assessee in the draft assessment order. While considering assessee s objection on the issue, learned DRP directed to compute the arm's length price of the interest at LIBOR plus 200 basis points, which reduced the addition to ₹ 35,76,072. 28. The learned Authorised Representative submitted, during the year assessee had received interest on loan advanced to its AE in U.K. which was benchmarked by using Comparable Uncontrolled Price method at LIBOR plus 50 basis points. He submitted, interest on loan received by the AE from a third party in U.K was at LIBOR plus 30 basis points. Thus, he submitted, the interest rate at which loan was received by the AE in the country where loan is given should be applied as a CUP for determining the arm's length price of interest. The learned Authorised Representative submitted, while deciding similar issue in assessee s own case in assessment year 2006 07, the Tribunal has restored the issue to the Assessing Officer for examining assessee s claim of applying internal CUP. Thus, he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... logy Ltd. v/s DCIT, [2004] 88 TTJ 778 (Bang.); iii) CIT v/s Smt. Premlata Jalani, [2003] 264 ITR 744 (Raj.); iv) Mrs. Prabha Lal v/s CIT, [2004] 269 ITR 212 (Patna). 36. The learned Departmental Representative relied upon the assessment order. 37. Having considered rival submissions and examined the provisions of section 234C of the Act in the light of the decisions cited before us, we are of the view that interest under section 234C of the Act has to be charged on the income returned by the assessee and not on the assessed income. Accordingly, we direct the Assessing Officer to compute interest under section 234C of the Act on the income returned by the assessee. This ground is allowed. 38. Ground no.9, is consequential in nature, hence, does not require adjudication. 39. Besides the above grounds, the assessee has raised additional grounds no.10, 11 and 12, challenging the validity of the order passed under section 92CA(3) of the Act. 40. The learned Authorised Representative has submitted that the Addl. CIT is not authorised / empowered to pass the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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