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TMI Blog2019 (8) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... eds verification at the level of the AO. Therefore, we set aside the order of the Ld. CIT(A) on the above matter and restore the matter to the file of the AO to make an order afresh following the above Instruction of CBDT, after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence before the AO Disallowance of travel booking engine and SAP software expenses considered as Capital Work-in-Progress ( CWIP ) in the books of account and claimed as revenue in the return of income - HELD THAT:- On identical issue, the ITAT, Mumbai in assessee s own case for AY 2012-13 has held that the salary and professional fees incurred for the development of the travel booking engine is to be allowed as a revenue expense as the same has not been incurred to acquire a new asset to be used in a new line of business Non-entitlement of Foreign Tax Credit (FTC) - Interest on loans and advances to one of its subsidiaries, CNK Australia - the AO did not grant foreign tax credit by holding that no details are available on record to show that the interest income had been offered to tax in India and that such interest income was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guarantee to third party banks for loans obtained by its subsidiaries (AEs). During the course of assessment proceedings, the assessee submitted before the Assessing Officer (AO) that no commission is chargeable on such guarantee provided by it on behalf of its AEs. However, it further submitted that it has charged guarantee commission @ 0.5% on account of loan advanced by the bank to certain AEs and in cases where no commission has been charged by the assessee, a suo motu voluntary adjustment towards guarantee commission has been made by the assessee in its return of income @ 0.5% on the amount of loan advanced by the bank to AEs. During the course of transfer pricing proceedings, the Transfer Pricing Officer (TPO) contended that provision of guarantee is a service rendered by the assessee which has conferred a benefit to the said AEs, accordingly, it should be remunerated at arm s length. It was the submission of the assessee before the TPO that in order to buy peace and without admitting that no guarantee commission is chargeable, it has made a voluntary adjustment of ₹ 9,97,44,142/- in the return of income on the provision of guarantee, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee also requested the AO to call for information from the said parties so that it can reconcile the mismatch between the AIR statement and its books of accounts. For this purpose, the assessee submitted the address of the said parties (out of 18, the details of 6 parties was available with the assessee, for the rest of the parties, the assessee had not made any transaction during the year). Further, the assessee had also written letters to the said parties asking details of the transaction entered by them with the assessee, so that the un-reconciled AIR entries can be reconciled. However, none of the parties replied to the assessee. The AO did not agree with the aforesaid contentions and submission of the assessee and made an addition of the un-reconciled tour sales of ₹ 44,96,114/- to the total income of the assessee. 3.2 Before us, the Ld. counsel submits that pursuant to the final assessment order passed by the AO, the assessee suo motu attempted to reconcile the tour sales pertaining to the said 18 parties, where the difference of ₹ 44,96,114/- was arising. The assessee shared the party s account statement with the respective 18 parties a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y invoke all the powers and authority as available to him/her as per the Income tax Act. If required and necessary, he/she can obtain prior approval of the Director or Commissioner of Income tax. The authorities can also examine whether general approval can be given. 4. Thus, the manner laid down by the Hon'ble HC in the above mandamus is a method of due verification. This may be brought to notice of all Officers working under your jurisdiction for compliance. We admit the supporting evidence filed by the Ld. counsel in the instant case for the reason that these are merely in connection with reconciliation of tour sales as reflected in the AIR statement vis-a-vis the books of accounts. We are of the considered view that the reconciliation in respect of AIR is a purely factual issue which needs verification at the level of the AO. Therefore, we set aside the order of the Ld. CIT(A) on the above matter and restore the matter to the file of the AO to make an order afresh following the above Instruction of CBDT, after giving reasonable opportunity of being heard to the assessee. We direct the assessee to file the relevant documents/evidence before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciently. Thus, incurring of these expenses for travel booking engine, the Appellant is expanding its existing line of business. Further, it is also a fact that the expenses incurred for travel booking engine and SAP software was only for the purpose of technology upgradation to the existing business of the Appellant and by incurring the same the Appellant has not created any new line of business or asset which can be given enduring benefit to the Appellant. Thus, according to us, in view of the above factual and legal submission, the salary and profession expenses incurred and disallowed by AO amounting to ₹ 1,20,24,914 over the development of travelling booking engine and SAP software is to be allowed as revenue expenses under section 37(1) of the Act. 4.3 Facts being identical, we follow the above order of the Co-ordinate Bench and allow ground of appeal No. 18 to 20. 5. The ground of appeal No. 21 to 23 relate to non-entitlement of Foreign Tax Credit (FTC) to the assessee. 5.1 Before us, the Ld. counsel submits that during the year under consideration, the assessee had granted loans and advances to one of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... credit of ₹ 13,35,60,477/-, whereas as per the updated Form No. 26AS issued by the Income Tax Department, the total TDS credit eligible to the assessee is ₹ 13,79,24,037/-. It is stated that in the final assessment order, the AO has given TDS credit to the extent of ₹ 13,23,15,727/- only, resulting into short TDS credit to the extent of ₹ 56,08,310/-. It is further stated that the assessee has filed a rectification application dated 30.11.2017 before the AO. As evident from the record, the assessee has filed a rectification application dated 30.11.2017 before the AO. We direct the AO to pass an order after verifying the facts and dispose off the said rectification application. 7. The ground of appeal No. 25 relates to non-grant of dividend distribution tax ( DDT ). It is submitted by the Ld. counsel that during the impugned assessment year, CKL had declared and paid dividend of ₹ 13,65,27,890/- to its shareholders and duly deposited the consequent DDT on the same of ₹ 2,28,12,582/- (along with interest) to the Government Treasury. However, in the final assessment order the AO has not granted credit of such DDT pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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