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TMI Blog2020 (10) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... s framed u/s 143(3) vide order dated 30.11.2012 determining the total income at Rs. 1520,44,16,770/-. Subsequently, notice u/s 148 dated 06.08.2014 was issued and served on the assessee. Thereafter, the case was referred to TPO to determine the "Arm's Length Price" u/s 93CA(3) of the Act in respect of "international transactions" entered into by the assessee with its Associated Enterprises (AE). The TPO after examining the assessee's transfer pricing documentation and other details passed an order dated 28.10.2016 u/s 92CA(3) of the Act and recommended adjustment amounting to Rs. 5500,366,412/-. Thereafter, AO passed draft assessment order u/s 147/143(3) r.w.s 144C of the Act vide order dated 27.12.2016 proposing to assess the total income of the assessee at Rs. 8052,48,62,672/-. Against the draft assessment order, assessee carried the matter before the DRP who vide order dated 20.06.2017 passed u/s 144C(5) directed the AO to complete the assessment as per the directions given therein. Pursuant to the directions of DRP, AO passed order u/s 143(3) r.w.s 144C(13)/ 147 vide order dated 30.08.2017 determining the total income of Rs. 7875,30,97,404/-. Aggrieved by the aforesaid order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed Rs. 130,37,78,222/-. As far as the payment to HCL Infosystems Ltd. is concerned, AO held that the amounts paid were in the nature of commission and therefore the assessee was liable to deduct tax u/s 194H of the Act. Since assessee had not deducted TDS on the payment made to HCL Infosystem Ltd., provision of section 40(a)(ia) were attracted and he accordingly, disallowed the amount of Rs. 61,36,65,228/-. 6. Aggrieved by the order of AO, assessee carried the matter before the DRP. DRP, following the directions passed in assessee's own case in A.Y. 2011-12, upheld the order of AO. Aggrieved by the order of DRP, assessee is now before us. 7. Before us, Learned AR submitted that identical issue arose in assessee's own case in A.Y. 2010-11 and 2011-12. For A.Y. 2010-11, Hon'ble Tribunal in ITA No. 5791/Del/2015 order dated 20.02.2020 adjudicated the issue in favour of the assessee. He pointed to the relevant findings of the Tribunal in the summary of the arguments placed before the Tribunal. He further submitted that the order passed by the Hon'ble Tribunal was followed by the tribunal in AY 2011-12. He further submitted that since the facts in the case in the year under co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 17.08.2020). Before us, Revenue has not placed any material on record to demonstrate the order in assessee's own case for A.Y. 2010-11 has been set-aside/stayed or overruled by higher judicial forum nor has pointed to any distinguishing feature in the facts of the case in the year under consideration and that of AY 2010-11 and 2011-12. We therefore, following the order of the Co-ordinate Bench for A.Y. 2010-11 and for similar reasons hold that the disallowance u/s 40(a)(ia) of the Act was not warranted in the present case. We therefore, set aside the action of AO. Thus ground of appeal of the assessee is allowed. 10. In the result the appeal of the Assessee is allowed. ITA No. 6501/Del/2017 for A.Y. 2012-13 11. As far as ITA No. 6501/Del/2017 for A.Y. 2012-13 is concerned, the revised ground raised by the assessee reads as under: "1. The order dated August 30th 2017 passed by the Learned under section 143 (3) read with section 144C of the Act pursuant to the directions of the Honorable DRP dated July 03, 2017 is bad in law and on the facts and circumstances of the case and the same is liable to be set aside. 2. The Learned AO and honorable DRP have erred in disallowin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identical to the ground raised in A.Y. 2008-09. We have hereinabove while deciding the appeal for A.Y. 2008-09 have held that the disallowance u/s 40(a)(ia) is not justified and have set aside the addition. We for the reasons stated hereinabove while deciding the issue in A.Y. 2008-09 and for similar reasons hold that the disallowance u/s 40(a)(ia) is not called for in the present case and thus the ground of the assessee is allowed. 14. Ground No.3 is with respect to disallowance of Rs. 40,87,83,096/- on account of trade price protection paid by the assessee. 15. It was noted by the AO that assessee had incurred expenditure of Rs. 1,01,45,00,889/- termed as trade price protection discount. The assessee was asked to furnish the details for trade discount including the policy, its nature and the accounting treatment. Assessee made the submissions and inter alia submitted that as a part of its sales strategy, the assessee was providing the protection to its distributors against the probable loss which they may suffer due to fall in the prices of handsets in the form of "Trade Price Protection". It was further submitted that it was a standard industry practice and further the expens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure termed as trade price protection. We find that identical issue arose in assessee's own case in A.Y. 2010-11 wherein the Co-ordinate Bench of Tribunal held as under: "11. We have heard both the parties and perused all the relevant material available on record. It is market practice that if there is any change in prices of handsets by competitors, change in life of mobile model, change in market demand of particular model which affects the sales, the distributor is protected by the Trade Price Protection. This is actually a commercial expediency in modern day technological changes which are very fast and vast. Besides, Trade Price Protection is offered to distributors on handsets which have not been subject to trade offers/discounts. This is evidenced by specific clause in the Trade Schemes filed before the Assessing Officer vide submission dated 10.03.2014 trade scheme. In-fact, it was pointed out during the course of hearing that in Assessment Year 2008-09, even the Assessing Officer has allowed the deduction for the instant like expenditure. In Assessment Year 2008-09, the matter was remanded back to the file of the Assessing Officer, who has allowed the deduction w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision made. He further noted that similar disallowance was made in A.Y. 2010-11 and following the order for A.Y. 2010-11 he proposed the disallowance of Rs. 22,15,43,032/- in the Draft Assessment Order. When the matter was carried before the DRP, DRP inter alia directed the AO to verify the factual position as per the direction given in the order and thereafter, decided the issue. AO in the final assessment order made the disallowance of Rs. 22,15,43,032/-.Aggrieved by the order of AO, assessee is now before us. 21. Before us, Learned AR submitted that the issue is covered in assessee's favour by the decision of Tribunal in assessee's own case for A.Y. 2010-11 & 2011-12. He submitted that order for A.Y. 2010-11 of the tribunal has followed by the co-ordinate bench in A.Y. 2011-12. He pointed to the relevant findings of the Tribunal and submitted that facts of the case in the year under consideration are identical to that of the earlier years. Learned DR on the other hand did not controvert the submission made by the Learned AR but however supported the order of lower authorities. 22. We have heard the rival submissions and perused all the relevant materials available on record ..... X X X X Extracts X X X X X X X X Extracts X X X X
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