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TMI Blog2023 (2) TMI 518X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of business of PE the information that was available should be considered deficient before questioning intention of the assessee to not have produced time log sheet. When the Tax Authorities below are not questioning that execution of projects as PE then discrediting one of the expenses of the nature of engineering expenses crucial to the accomplishment of the project was not justified. Particularly in regard to Assessment Year 2005-06 when transactions were reported to be at arm s length by the ld TPO and the ld TPO study included examination of engineering services than that all the more required material reasons to discredit the debit note for lack of corroboration. The bench is of considered opinion that findings of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th Delhi Metro Rail Corporation (DMRC) for design, supply, installation, testing and commissioning of traction power, power supply, power distribution SC A DA system for Metro Corridor and the contract is termed as S YS-2 contract. The role of Cobra in the contract is for design, sourcing of material, supervision of installation, testing and commissioning of DC track sub-station, track cabins, rigid catenary system, track earthing panels etc. Cobra has taken approval from RBI on 07.08.2001 to set-up a project office in India. The appellant has treated the project office as its PE in India. 3. 2.1 As for AY 2005-06, the appellant had filed return of income declaring therein NIL income on 29.10.2005. The appellant had claimed engineering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances of the case and in law, the order passed by CIT (A) is contrary to facts and bad in law. 2. That on the facts and circumstances of the case and in law, the CIT (A) was not justified in upholding disallowance of an amount of Rs.5,45,00,895/- by applying the provisions of Section 40(a) (i) on the plea that no withholding tax in respect of payments made to M/s Ineco M/s Enotrac was made. 3. That on the facts and circumstances of the case and in law, the action of the CIT (A) in upholding disallowance of engineering expenses aggregating Rs.6,34,83,482/- paid to Head Office is arbitrary. 4. That on the facts and circumstances of the case and in law, the set off of brought forward business losses allowed in the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee that the ld Tax Authorities Below have arbitrarily stressed upon furnishing of actual time sheets in regard to engineers engaged to provide the services by the head office to the assessee PE. It was submitted in regard to assessment year 2005-06, the ld TPO had examined the transaction including engineering expenses and once, the ld TPO had made the adjustment the ld AO was required to accept the same. Reliance in this regard was also placed on the provision of section 92CA(4) of the Act which has come in effect from 01.04.2007 to contend that AO was bound to compute the income as ALP decided by the ld TPO. 10. It was submitted that the debit notes raised by the head office carry the complete particulars of the employees and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on already available and provided. The bench is of considered opinion that to discredit an expense questioning whether it was duly and exclusively for the purpose of business of PE the information that was available should be considered deficient before questioning intention of the assessee to not have produced time log sheet. 13. Further when the Tax Authorities below are not questioning that execution of projects as PE then discrediting one of the expenses of the nature of engineering expenses crucial to the accomplishment of the project was not justified. Particularly in regard to Assessment Year 2005-06 when transactions were reported to be at arm s length by the ld TPO and the ld TPO study included examination of engineering service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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