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TMI Blog2019 (8) TMI 1046X X X X Extracts X X X X X X X X Extracts X X X X ..... which was established in the current year at Magarpatta, Pune SEZ. The assessee has placed the list of employees who were transferred from old unit. As per the said list, 38% of employees have been so transferred. The CBDT in this regard has issued circular, under which it is said that where an undertaking is established by transfer of employees from existing undertaking upto 50% of employee strength, then it cannot be said the case of splitting up or reconstruction of existing business. We have applied the said principle in earlier years and while deciding the issue of establishment of new undertaking at Hyderabad in assessment year 2011-12 has held that since the employees transferred from existing unit were less than 50%, then it can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the absence of satisfaction in earlier years also, the Tribunal has held that there is no merit in making the said disallowance made under section 14A read with Rule 8D of the Rules. The Tribunal has decided this issue in assessment year 2011-12 wherein deleted the addition. Addition on account of ESOP cost - HELD THAT:- The said issue has been remitted back to the file of Assessing Officer with directions by the Tribunal in assessment year 2009-10 and even in succeeding years. Following the same parity of reasoning, we remit this issue also back to the file of Assessing Officer to decide the same in line with earlier directions of Tribunal in assessment year 2009-10. The ground of appeal No.4 raised by Revenue is thus, allowed for st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 59,81,81,987/- u/s 10AA of the Act in respect of three undertakings without appreciating the fact that the these units were formed by splitting up and reconstructing of the existing business as provided in section 10AA(4)(ii) of the I.T.Act, 1961. 2. The Ld. CIT(A) has erred in directing the Assessing Officer to delete the disallowance u/s 10AA(9) r.w.s. 80IA(10) of the I.T. Act, 1961 when in fact the assessee has earned substantial excessive profits as discussed by the A.O. in his Assessment Order. 3. The Ld. CIT(A) erred in directing the Assessing officer to delete the disallowance made u/s 14A r.w. Rule. 8D even though the assessee has earned substantial amount of tax free dividend and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in respect of three eligible undertakings. Out of three undertakings, one undertaking was established in assessment year 2009-10 and the second undertaking was established in assessment year 2011-12. The Tribunal while deciding the issue in the case of assessee in assessment year 2011-12 in ITA No.74/PUN/2016 and cross appeal in ITA No.299/PUN/2016, relating to assessment year 2011-12, order dated 18.03.2019 has allowed the plea of assessee and held that the said undertakings were not established by splitting up and / or re-constructing of existing business and had allowed the claim of assessee under section 10AA of the Act. 6. Now, coming to third undertaking i.e. new undertaking which was established in the current year a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee. The case of Revenue was that the profit margins shown by assessee were higher than the mean margins of comparables selected for benchmarking international transactions, hence provisions of section 10AA(9) r.w.s. 80IA(10) of the Act were invoked. The Tribunal in earlier year have deleted the aforesaid disallowance made by the Assessing Officer. Following the same parity of reasoning, we hold that this issue also stands covered in favour of assessee in line with orders of earlier years and in the absence of Assessing Officer failing to demonstrate that any arrangement existed between the assessee and comparable companies selected which enabled the assessee to earn more profits. The ground of appeal No.2 raised by Revenue is thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... file of Assessing Officer to decide the same in line with earlier directions of Tribunal in assessment year 2009-10. The ground of appeal No.4 raised by Revenue is thus, allowed for statistical purposes. 11. Now, coming to the next issue raised vide ground of appeal No.5 in respect of disallowance under section 40(a)(i) of the Act in respect of foreign remittances made to software and other services where TDS was not deducted. 12. The Assessing Officer had made the aforesaid disallowance under section 40(a)(i) of the Act in respect of various payments made by the assessee i.e. in respect of purchase of software license and payment for license fees of ₹ 6.82 crores, AMC charges of ₹ 16,76,325/-, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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