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TMI Blog2020 (8) TMI 659X X X X Extracts X X X X X X X X Extracts X X X X ..... nsuccessful before the Assessing Officer and the CIT (A), the assessee carried the issue in appeal before the Tribunal.The Co-ordinate Bench after considering the facts allowed the assessee s claim of amortization. The facts in the impugned assessment year are identical. For parity of reasons we direct the AO to delete the addition and allow write off of proportionate (10%) expenditure. The ground no. 3 of the appeal is allowed, accordingly. TP Adjustment - assessee has declared cost plus @10% margin on the sales made to it s AE in UK - TP adjustment by estimating profit margin @15% on the basis of GP declared in subsequent assessment year - HELD THAT:- Merely for the reason that the assessee has declared higher GP in subsequent year, current year GP should not be estimated by adopting the same. Further, the case of assessee is that 15% GP in subsequent year has been computed after inclusion of sale of assets, etc. and hence, it does not depict correct picture of operating profits. We further observe that the assessee has also failed to furnish complete details as required under transfer pricing provisions. Arm s Length Price of the transaction with AE has to be determined by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorized Representative of the assessee submitted that the addition has been made in respect of loans taken by assessee from Ms. Titli Thind- ₹ 1,50,000/- and Ms. Anita Chavan ₹ 3,10,000/-. The assessee had filed complete details of the loans along with confirmations from the lenders. Since, the assessee in first instance merely failed to file PAN of the lenders, the Assessing Officer rejected assessee s contention. Subsequently, vide letter dated 18/03/2014, the assessee filed PAN of the lenders. However, the Assessing Officer rejected the same holding that the assessee has not discharged its burden. The ld. Authorized Representative of the assessee submitted that Ms. Anita Chavan is the primary member of the appellant company. She retired as Joint Director, Agriculture and Co-operative Department of Government of Maharashtra. She passed away in the year 2010 and before her demise she filed her return of income for AY 2010-11. The assessee filed copy of return of income of Ms. Anita Chavan for assessment year 2010-11 and copy of bank statement reflecting loan amount advanced to the assesse as additional evidence before the CIT(A). The assessee also filed copy of PA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by adopting margins of subsequent Financial Year. It was explained that profit margin on goods sold to the AE was 12% and the computation of the same was filed before the Assessing Officer. The Assessing Officer rejected the same on the basis of the GP declared by the assessee in subsequent assessment year. The Assessing Officer has failed to consider the fact that 15% GP in subsequent assessment year also consists of gain on sale of assets i.e. factory building and sundry balances written back along with fixed deposit interest. The ld.Authorized Representative of the assessee pointed that if above non-operating balances are reduced, there would be loss. The ld. Authorized Representative of the assessee submitted that the margin of cost plus 10% declared by the assessee is fair and reasonable in the light of the fact that even in current assessment year the assessee has suffered losses. 4. On the other hand, Shri A.Mohan, CIT-DR , representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of the assessee. The ld. Departmental Representative submitted that assessee has not produced any document in the form of agreement, etc. to substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The facts in the impugned assessment year are identical. For parity of reasons we direct the Assessing Officer to delete the addition and allow write off of proportionate (10%) expenditure. The ground no. 3 of the appeal is allowed, accordingly. 5.4. In ground No.4 of the appeal, the assessee has assailed addition of ₹ 17,60,966/- made by the Assessing Officer by way of TP adjustment. The assessee has declared cost plus @10% margin on the sales made to it s AE in UK. During the course of assessment proceedings the Assessing Officer made TP adjustment by estimating profit margin @15% on the basis of GP declared in subsequent assessment year i.e. assessment year 2012-13. The AO applied profit margin of 15% on sales and service charges to AE. The contention of the assessee is that 15% profit margin adopted by the Assessing Officer is wrong as in the subsequent assessment year the profit margin of 15% includes gain on sale of assets being factory building and sundry balances written back including interest on fixed deposits. In fact in the subsequent assessment year there is negative GP as the assessee has suffered losses. We are of considered view that merely for the reason t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portant fact that the entire country was in lockdown, we should compute the period of 90 days by excluding at least the period during which the lockdown was in force. We must factor ground realities in mind while interpreting the time limit for the pronouncement of the order. Law is not brooding omnipotence in the sky. It is a pragmatic tool of the social order. The tenets of law being enacted on the basis of pragmatism, and that is how the law is required to interpreted. The interpretation so assigned by us is not only inconsonance with the letter and spirit of rule 34(5) but is also a pragmatic approach at a time when a disaster, notified under the Disaster Management Act 2005, is causing unprecedented disruption in the functioning of our justice delivery system. Undoubtedly, in the case of Otters Club Vs DIT [(2017) 392 ITR 244 (Bom)], Hon ble Bombay High Court did not approve an order being passed by the Tribunal beyond a period of 90 days, but then in the present situation Hon ble Bombay High Court itself has, vide judgment dated 15th April 2020, held that directed while calculating the time for disposal of matters made timebound by this Court, the period for which the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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